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GFMA 2023 INTERNATIONAL BUSINESS

Table of Contents
PART A ..........................................................................................................................................
Case study ......................................................................................................................................
Question 1: How does expanding internationally benefit Walmart? ........... 1
QUESTION 2: What are the risks that Walmart faces when entering other
retail markets? How can these risks be

mitigated? .................................... 2

QUESTION 3: Why do you think that Walmart first entered Mexico via a
joint venture? Why did it purchase its Mexican joint venture partner in
1998? ........................................................................................................................... 3
QUESTION 4: What strategy is Walmart pursuinga global strategy,

localization strategy, international strategy, or transnational strategy?


Does this strategic choice make sense? Why? ...................................................... 5

PART B ...........................................................................................................................................
Introduction ............................................................................................................... 7
Company background ............................................................................................. 8
The companys strengths and weaknesses related to global business
activities. ................................................................................................................... 15
Competitive Advantages ....................................................................................... 17
Analysis on existing competitors and their global strategies ....................... 19
Identify and analyze the opportunities and challenges faced the company
in expanding its business internationally. ........................................................ 21

GFMA 2023 INTERNATIONAL BUSINESS


Explain how the company overcame various challenges and conquered the
overseas market ....................................................................................................... 24
Suggest future strategies/actions that the company can adopt in overseas
market - to ensure long-term sustainability. ................................................... 25
Conclusion ................................................................................................................ 27
Reference ................................................................................................................. 28
Appendix ..............................................................................................................................29

Case study
Question 1: How does expanding internationally benefit Walmart?
As a present developed, many of Walmarts suppliers constructed manufacturing works
near its Mexican delivery centers so that they could better assist the company, which assisted to
advance drive down inventory and logistic costs. There have other benefits. Firstly, Walmart has
also been to gain important economies of scale from its worldwide purchasing power. A lot of
Walmarts key dealers have long been global businesses for example GE (appliances), Unilever
(food products), and Procter and Gamble (personal care products) are all main Walmart dealers
that have long had their own worldwide processes. Besides that, Walmart has used its improved
size to request deeper discounts from the local processes of its worldwide dealers, increasing the
companys capability to lower prices to customers, increase market share, and eventually earn
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larger profits. Second, Walmart has initiate that it is benefit from the movement of ideas
transversely the 14 countries in which it now competes. For example, a two level store in New
York State came about because of the achievement of multinational stores in South Korea. Other
than that, Walmart has been a leader in the employment of information structure to track product
sales and inventory, and their established one of most well-organized distribution system in the
world. Then, Walmart was being one of the first corporations to encourage widespread stock
ownership among employees. These practices led to high output that enabled Walmart to cut
down its operating costs, which it passed on to consumers in the form of everyday low prices
product. By the mid-1990s, Walmart was changed its Mexican processes to match the homegrown environment. It show intensely enhanced the distribution system when Walmart did a
partnership with a Mexican trucking corporation.

QUESTION 2: What are the risks that Walmart faces when entering other
retail markets? How can these risks be mitigated?

Walmart faced the risks when get into another retail market, they were faced the risks.
The risk is replicating not success. This risk happens when Walmart has matters in its system of
effective distribution system on replicating at Mexico. This is because of the poor infrastructure,
road was crowded and with the local suppliers there were a shortage of leverage. From inherent
problems of stock, thus increasing of cost and higher prices as matter that occur that cannot or
will not directly delivered to Walmarts store or distribution centers in Mexico. There were also
has misunderstandings with selection of merchandise. Items like mowers for cutting grass, ice
skates, fishing rods and blowers leaf that famous at US were carried by many stores in Mexico.
So that, this items do not sell well and this take action of manager to slash the prices to move the
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inventory, just to search the automated company information systems that can replenish the
depleted stock immediately ordered.
These risks can be mitigated if a partnership with Mexican trucking company to match
with the local environment operations. Improvement from the distribution systems occur if the
business has relationship that is partnership relationship between Walmart and Mexico. There
will be more careful practices of stock meant that to local tastes and preferences, Mexican stores
sell merchandise that appealed more. Other than that, many supplier of Walmart built factories
near the Mexican distribution centers to have better serve the company as presence grew of
Walmart. From this built, they can serve better the company that can help further drive down
inventory and cost of logistics.

QUESTION 3: Why do you think that Walmart first entered Mexico via a joint
venture? Why did it purchase its Mexican joint venture partner in 1998?

My opinion why the Walmart enter Mexico by a joint venture because there a lot of
advantages that they can get by joining their own company with the establish company that
already establish at Mexico. For example, when Walmart want to expand their business in
Mexico, they choose the company that already establish at Mexico market which is Cifera , the
largest local retailer.

GFMA 2023 INTERNATIONAL BUSINESS


The purpose by joining these two companies it is because that company which is
Walmart Global gets benefit from the local partners knowledge it is about the local condition,
about their culture, language, political systems and the business systems. By knowing this thing,
for my opinion, I think the company that joining with local company no need to worried or need
to make some research more because they already can get the knowledge by their partner.
Besides, by joining the company, the cost and risks of opening a foreign market can be shared by
two companies. So by these, Walmart can share anything that related to their company with their
partner so that Walmart no need to worry about the cost that they obligate by their own.

In 1998, Walmart make their move to the global expansion by purchased their
Mexican joint venture because they want to adapt with the Mexican operations and match with
the local surroundings. The reason why Walmart doing these because they learn from their
mistake before. By purchased the joint venture company, Walmart can implement their own
system which they can improve with their distribution system, checking more careful stocking
practices means that the Mexican stores can sell merchandise that appeal more to local tastes and
preferences. By owning the local company, Walmart can easier to improve the process of their
target to expand more about their business. for my opinion, by owning the local company,
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Walmart can easily make their own target and some of Walmarts supplier built factories near its
Mexican distribution centres so that they could serve better to the company, which can help to
further drive down the inventory and logistics cost. By purchased the local company which is
Cifera, Walmart become more than twice the size of its nearest rival in Mexico with some 700
stores and got the total revenue about $12.5 billion.

QUESTION 4: What strategy is Walmart pursuinga global strategy,


localization strategy, international strategy, or transnational strategy? Does
this strategic choice make sense? Why?
Walmart was opened in Arkansas by founder Sam Walton in 1962. The strategy
that used by Walmart firstly is localization strategy, which is focuses on increasing the profit.
The goods or services are customized, so the firm provides a good tastes and preferences in
different market. To the local demand, they adjusting the product that offering, the company
upgrade the local market product in term of value.
Secondly is International Strategy, Walmart Company has rapidly goes into the
international market by opening up new branch in a lot of countries in this world. Currently, this
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company has more than 8,500 warehouse stores and departmental in 15 countries. The major
area of focuses is how these companies have been successful in foreign countries. In case to
compete with other companies that producing the same goods in other countries, Walmart has
used good business strategy where in every country its branch have a different name and then the
goods that produced are different quality based on the tastes of customers in other country. When
looking towards expansion, Wal-Mart identifies the weaknesses, threats, strengths and
opportunities. Walmart using the SWOT analysis in decision making of combination the
international strategy in fiscal planning. The problem that faced by Jerman and China in
Irelands market is the failure to learn complexities of some international markets or their
weaknesses. Globalization is not just marked a change in the international relationship with an
increase in the political economy of international. It is also forced the world to be advance to get
an simple and luxurious life style while saving the time and the money.
Thirdly is Global strategy, Walmart started its first international branch in
Mexico in 1991 and has growth up get own innovations. Initially, it might be difficult to see a
Walmart in another country. The company before this started its business in small town in the
United States, but nowadays, international sales are increasing at almost nine times. Until now,
all the Walmart's stores always follow the main principle that is low prices. Walmart has be
pursued globalization rapidly cross the barriers since its first move in 1991. In 1993 just 1
percent of all Walmart branch at outside the United States. Earlier 1998, that had grown to 18
percent. Between 1995 and 1998, the firm's profitability is about 5 percent and the growth in
profits that came from international operations is about 4 percent. The involvement of
globalization was growing, competition in the businesses and markets is difficult to avoid.
However, by the goal's establishment and appropriate techniques, a firm cans slowly starting to
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the success path. In the industry of retail business, Wal-Mart faced some cases and problems
including the cases of the competitors. The most stronger of competitor for Walmart is Kmart,
which is Kmart is the largest retailer after Walmart in the United States. Walmart and Kmart
already success in the retail business, there is still have a difference in their business strategies.
The differences is Wal-Mart focused on the establishment of branch at US small towns and
communities, while Kmart focused on building its branch at populated areas.

Yes, the strategic choice makes sense because Walmart always care about what customers
want even in the cities. They always try to protect product in the stock with the local culture.

Part b
INTRODUCTION
We are in a group of 6 given task to do research and analyze on Walmart corporation in
order to complete this project. We done our research very widely and have been explained very
clearly throughout this project. Walmart corporation is very famous company around the world
and well-known for the largest retail industry. In 1962, Walmart was established by Sam Walton.
Waltmart was named based on the family name Walton, which is giving Walmart the meaning of
Waltons mart in long form. Walmart is known as a strong company because during the

GFMA 2023 INTERNATIONAL BUSINESS


recession in the year of 2008 at United States, Walmart managed to survive and sustain on that
time.
The successes of the Walmart retail industry have been researched widely. Majority of
this project is all about Walmart Corporation background. We have given a clear explanation on
company profile and nature of the business very well. Besides that, we have explained very
clearly about Walmarts strengths and weaknesses and its competitive advantages. Walmart
corporation is started very long time ago and it is very well-known company in the market. So
we have identified and analyze on existing competitors, global strategies, opportunities and
challenges faced by Walmart around the world. In additionally, we have explained how Walmart
overcome various challenges and conquered the overseas market. Last but not least, we gave
suggestion on future strategies or action which Walmart can adopt in oversea market in order to
ensure long term sustainability.

Company background

Wal-Mart Stores

WAL-MART
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-Walmart known as an American international merchandising corporation. Walmart

running groups of big deduction cost of branch stores and storehouses.


Walmart is the worlds biggest community corporation in 2014 and well branded for the
largest private company in the world which the company consist of over two million
employees and these make Wal-Mart as the biggest vendor in the world.
Walmart Corporation is well known for the family-owned business which is organized by
the Walton family with the above 50 percent of Warmart shares.
Walmart Corporation well known for the greatest valued companies in the world.

Sam Walton is the person who founded this corporation in 1962, combined

on October 31, 1969.


Walmart Corporation was merchandized on an open market on the New York Stock
Exchange in 1972.
The headquarter was in Bentonville, Arkansas.
Walmart is likewise the largest groceries vendor in the U.S
It produced 51% of its Us$258 billion deals in the United State in 2009 from basic supply
business.
Walmart also the owner and operating the Sam's Club merchandising warehouses in
North of America.
The organization design from a provincial to nationwide giant in the late 1980s and early
1990s.
In 1988, Walmart became the greatest beneficial and profitable vendor in the United State
and in October 1989 it had turned into the largest as far as income revenue.
Geologically constrained to the South and Lower Midwest up to the mid-1980s, from the
early 1990s Wal-Marts vicinity traversed across the nation On November 1989, Sam's
Club opened in New Jersey and on July 28, 1990, the first California outlet opened in
Lancaster.
In October 1990, a Walmart was opened in York, Pennsylvania and carrying the
fundamental store into the Northeast.

GFMA 2023 INTERNATIONAL BUSINESS


There are more 11,000 stores owned by Walmart in 27 countries under 55 different
names.
Companies owned by Walmart in U.S, including 50 states and Puerto Rico operates
under Walmart corporation.
Mexico - as Walmart de Mxico y Centroamrica.
United Kingdom - Asda
India - Best Price
In Argentina, Brazil, and Canada is wholly owned operations.
Ventures conducted by Walmart give a successful result and unsuccessful result.
Outside North America- had varied result.
United Kingdom, China, and South America - greatly successful.
Projects in Germany and South Korea unsuccessful.

Walmart's History
Walmarts history is talking about how Walmart have been began from the starting , how it had
been grow, and hows the leadership has been changed throughout the retail industry.
1960s
Merchandising Revolution
Sam Waltons plan created an unshakeable foundation The Lowest Prices Anytime,
Anywhere.
1962
On July 2, 1962, Sam Walton was opened his first Walmart stores in Roges, Ark.

1967
24 stores which cost up to $12.7 million in sales was owned by Walton family.
1969
The corporation formally and legally combined as Wal-Mart Stores, Inc. on the year of 1969.
1970
Walmart started to grow up and well known in National level.

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"Mr. Sam Walton" takes Walmart into national level and proves this vision as to be
widespread had been achieved.
1970
Walmart Corporation is known as publicly traded company. $16.50 per share was sold as the
first stock.
1971
In Bentonville, the first delivery center and Home Office was established.
1972
In the New York Stock Exchange (WMT), Walmart name was listed with 51 stores which
noted the sales of $78 million.
1975
Sam Walton was presented the Walmart cheer because it is motivated by a visit to a Korean
manufacturing facility.
1979
The Walmart Foundation was launched.
1980
Years of Firsts
Sam club was the first being opened in the 1980s by providing and serving small businesses
and individual.
Walmart Supercenter was firstly started with the combination of a supermarket and general
merchandise.
1980
1 billion in annual sales achieved by Walmart and it is the quicker than other firm during
those time.
In those year too ,Walmart had 276 stores and he hired 21,000 allies.
1983
In Midwest City, Okla, Sams Club launched firstly.
Walmart changed the system of money registers to computerized point-of-sale systems by
provide the quick and exact checkout service.
1984
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When the company accomplished a pre-tax profit of 8%, Sam Walton did the hula on Wall
Street by creating good on a promise to associates for the prior fiscal year.
1987
The biggest private satellite communication system was installed by the company and
connecting all the operation of the company through smoothly on the data, voice and video
communication.
1988
Walmart Supercenter- firstly released open in Washington to provide one-stop shopping
convenience by combining the general merchandise with a full-scale supermarket.
David Glass is the CEO of the company during that time.
1990
Known as the Americas Top Retailer
Walmart became name as the nation's number-one retailer by 1990s. Walmart Supercenter
was redefined accessibility and one-stop shopping, Every Day Low Prices was
internationally spread-out.
1991
A Mexican retail company went to globally through the joint venture by Cifra and a Sam
Club was opened in the Mexico City.
1992
Before Sam Walton passing away at age 74, he voiced the companys task of saving people
money so they can live better while receiving the Medal of Freedom
Chairman of the board goes to Rob Walton.
Walmart hired 371,000 associates in 1,928 stores and clubs.

1993
$1 billion sales week during the year 1993 is celebrated by Walmart .
1994
Walmart Corporation is being spread to Canada with the buying of 122 Woolco stores.
1996
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Walmart had been opened the firstly stores in China.
1997
Walmart was celebrated the first $100 billion sales year.
1998
In Arkansas, the Neighborhood Market format was established with three stores.
1999
With the acquisition of ASDA, itz gives Walmart entered the United Kingdom.
2000
New Era entered by the Walmart corporation
This is to offer the customers a seamless shopping experience which is not counting whether
they are online, in a store or on a mobile device.
2000
David Glass selected as CEO of the company.
When Walmart.com was created, its allowing the U.S. customers to shop through the online.
More than 1.1 million associates in 3,989 stores and clubs international which were Walmart
employed.
2002
Walmart was topped the Fortune 500 ranking of America's biggest companies for the first
time of its career.
Through its investment in Seiyu, its make Walmart entered the Japanese market.
2005
To victims of hurricanes Katrina and Rita, Walmart take a leading part in disaster relief by
donating $18 million and 2,450 truckloads of supplies.
Major commitments by Walmart made into the ecological sustainability, creating aims to
zero waste, applying only renewable energy and provide products that endure individuals and
the environment.
2006
Walmart launched its $4 generic-drug treatment program.
2007
Walmart.com introduced Site to Store service for consumers to buy through the buying
online and pick up stock in stores.
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2009
Mike Duke is the CEO.
Walmart went to Chile with the huge and majority acquisition of a stake in D&S S.A.
Walmart beat $400 billion of the yearly sales.
2010
In India.Bharti Walmart, a shared venture was opened.
Walmart contributed $2 billion to support end hunger in the United States.
Walmart established a worldwide obligation to maintainable agriculture and aiming to
strengthen and stronger the local farmers and economies, and allowing customers access to
affordable, high-quality food.
2011
Walmart across 10,000 retail units worldwide with the gaining of Massmart in South Africa,
Walmart Express stores were opened in Arkansas for the first time.
Walmart introduced @ Walmart labs, a hub to develop the social, global platforms and
mobile.
2012
Walmart celebrate 50 years for assisting people save money so they can live well.
2014
Mike Duke as the CEO.
The Walmart employing 2.2 million acquaintances international and serving more than 200
million customers each week roughly more than 11,000 stores in 27 countries.

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Walmart Business
Walmart had introduced thousands of stores around U.S. and expanded internationally. Its
started from very humble beginnings as a small discount retailer in Rogers, Ark for the first time.
Now because of the innovation, Walmart creating a seamless experience to allow customers
purchase shop at anytime and anywhere through the online, mobile devices and in stores. They
created values and bring a lot of opportunities to customers and communities globally. Walmart
corporation running more than 11,000 retail units under 69 banners in 27 countries and ecommerce websites in 10 countries. Besides that, they also employs in U.S alone about 1.3
million and around the world about 2.2 million associates.

Business done by Walmart:


Walmart U.S.
Walmart International
Sam's Club
Walmart Global eCommerce

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The companys strengths and weaknesses related to

global business activities.


Strengths and Weaknesses Of Walmart To Global Business Activities
Strengths of Walmart To Global Business Activities
Walmart has develop many strength to global business activities compared to others
companies. It gives the largest jobs to the employee over the world to a people that want job
without a college education especially in the United States.
The powerful brand name of Walmart that has makes people familiar. People know over
four decades since established in 1962 with everyday give very low prices of variety products
with the largest net sales over the world. This strategy of having a low cost is very successful
with the aggressive growth strategy of Walmart. Walmart can added 425 new stores over the
world alone on 2003 and the number of customer demand increasing make company add to
4000 more to the world.
Other than that, Walmart has their logistic system that gives competitive advantaged with
other company. Demanding on online market, Walmart also having a website. Thus, from this
online sale, this has allowed sales increasing over the world. Online orders have become a
breeze to fill that it is not only provides convenience for customers,. So that, with the technology
used, Walmart be able to invest to improve their company. Suppliers must be in a very strong
negotiation position and must choosing that gives great flexibility and wide range working with
supplier and vendors. Then, with the great capable manager that can lead the success of

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company. He or she knows how to save the transportation cost of Walmart from its superb
logistic systems. From this saving cost, thus Walmart able to achieve high operation efficiency.
Weaknesses of Walmart To Global Business Activities

However, Walmart also faced the weaknesses. If we can see, Walmart has a lot of
consumer over the world sales that have low prices and well-known name. So that, Walmart as a
retailing giant has taken over the retail industry. Therefore to the small retailers, it will make
extremely difficult to survive. They are angry because the powers of Walmart monopolize gain
over past few decades. Due to lack of sales, most of the small shops have been forced to close.
Because of this issue, some people refuse to shop at Walmart.
Other than that, since Walmart sells variety of products like food, clothing, and
stationary, they have the lack quality of products without focused on competitors also. Its focus
on lowering the cost production and give low prices, but they did not focusing on quality of
product and the competitors. The lack focusing of Walmart on quality of product because of only
focus on lowering price, the competitor can take the chance makes the change and improve to
customer needed. As case occur in Japan, Walmart Sieyu chain failed due its inability to attract
shopper of quality-obsessed. Then, growing too big in many areas in the world makes lack of
control. Its difficult to control certain place with different culture.
Last but not least, sometimes the location of the stores of Walmart has a disadvantage.
At European market, they still do not have a large part although Walmart has grown and
expanded into the international market. The competitors only gaining in the other surrounding
countries and only present in the UK. Walmart also needs to consider the consequences of

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placing their stores too close together. Because of the increasing number of stock in store,
Walmart need consider to open another location of store. Walmart cannot only one store to save
the others stock.
Competitive Advantages
Discuss the competitive advantages of these companies. (For example, some
companies may gain a competitive advantage as a result of access to raw
materials, others may gain an advantage through the use of technology for
production and distribution or as a result of a well-known brand name).

As we know, the major competitor of Walmart is Kmart and Targets. This two major
competitor always compete with each other to become the successful company that have their
own competitive advantage. As we focus on Walmart, we can see that the difference between
Walmart with the other two is because their motto of their company which is always low
prices. So the competitive advantage that Walmart have is to sell their product with the lower
price compared to Kmart and Targets.

Always low prices is well-defined how Walmart play and focus more in a wide
range of consumer product, starting from food to prescriptions until electronics. We usually
know that Walmart always support their low-cost and enhance it with an integrated system of
capabilities, include with their real estate acquisition, no frills store design and superior supply
chain management that involve many expert point-of-sale data analytics. Walmart also known as
the company that mix between their product and service. It kept tightly aligned with their own
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capabilities systems which can avoid big ticket items, where it has no cost advantage, or where
new service capabilities might be required. And Walmart also innovates constantly within its
chosen constraint like tailoring product assortments to local trends.

Besides, the fundamental of Walmart principle is everyday-low prices which is sell the
product in a lower price to their customer as low as the customer cant get from the other
company. In addition, Walmart also commit to customer service which is they also concern
about what really the customer want from the product that they sell and always concern about the
quality of their product that they want to sell to their customer. Furthermore, Walmart always
care about their relationship with their vendor. We can see that the strong relationship between
vendor and the company can make our company be more successful and our vendor will trust us
for a long time. Walmart also efficient in their operation network. We can see how the process
that Walmart do to make sure that the company that their joint ventures with is going well in not
making some losses.

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Analysis on existing competitors and their global


strategies.
In north America, the main competitors for Walmart are stores like Shopko and Meijer,
Kmart, Target, Publix, Mexicos Commercial Mexicana and Soriana, Canadas The Real
Canadian Superstore and Giant Tiger. However, Walmart also have competitors in Germany like
Edeka Group, Aldi, Metro AG, Lidl, Rewe and other. Competitions the prices between retail are
not follow the Germanys market. When Walmart decrease the price, then the other retailer also
decreases their price. Walmart realized that if they do not take the challenge to make the business
internationally, the other company which is their competitor will beat it to the punch.
For example the competitor, we are taking the Carrefour Company. Analysis for the
Carrefour global strategies, there are three strategies that they use. There is Client-oriented
culture, transformation and innovation, and adaptation. According to Daniel (2004) there are
some key factor for evaluation and selection of a country for international operations which is

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the market size, ease and compatibility of operations, cost and resources availability and
economic, politic, monetary and financial risk. Besides, Carrefour also makes consideration
about the important of having the local market. This is because when we want to enter certain
market with the huge scale, we really needed the local partner so that we can understand market
and move master. For the purpose of expansion the business, that is the important aspect because
these opportunity will gives us more access into markets at local and gives Carrefour more
chance in business. For me, the Carrefour and Walmart slightly have the same strategy for
expansion their own business.
After they recognized the solution for problem that faced, Walmart started the
competitive business strategies. Their main idea is to focus on consumers needs and provide the
good services as possible. The marketing strategy is to ensure the lower prices in every
transaction. To attract the potential customers, Walmart used this communication strategy.
Walmarts president said one of the main strategies is the promotion of a global brand name.
The pricing strategy is one of the main features Walmart has been known. Every day
low price (EDLP) is the term that tells all about Walmart. The meaning of the term is Walmart
provides product that are high quality at the lowest prices. The business becomes highly
recognized and easily remembered because of the strong commitment of Walmart for policies
and customers. Walmart also used the internet and technology to promote their goods and
services all over the world. By using the internet in business, its easy for Walmart to open the
services to internet users. The internet also have specialties that will help to improve the
walmarts business to growth up. Walmart must know that the profit will not achieve easily and
they have to know certain thing that can bring them to success in retailing online. There are

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many problem that faced in retailing online such as delivery costs, data security and
merchandising returns.
The Walmarts account will manage by a new company which is Li & Fung. The
conclusion is, Walmart defined about the source of product that imported into the market. By
rearrange the relationship with the suppliers all over the world that offer the lower price for the
product that competitive and lower prices. Walmart also uses differentiation strategy. This means
differentiation strategy used by Walmart to succeed by making a unique goods or services to the
customers. Whether the types is real or just in the mind of the customer, customers must believe
that are something special offered to them. Wal-Mart offered unique warranties and brand
images and achieve the strategy. The customers of Walmart believe that Walmart provided the
special thing that do not provide in others competitors store.

Identify and analyze the opportunities and challenges faced the

company in expanding its business internationally.

Existing opportunities
Walmart was established in Arkansas by Sam Walton since year 1962.
Walmart has grown rapidly from the smaller to the largest retailer in the world and
Walmart was a leader in the performance of information systems in track the product
sales and inventory, developed one of the most efficient distribution systems in the world.
Other than that, Walmart was one of the first companies to promote widespread stock
ownership among employees. However, Walmart was realized that its opportunities for

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growth in the United States were becoming more limited since year 1990. Because of
that, Walmart was decided to expand the company globally to increase the growth in
business world and Walmart used different strategies in different places. To start with the
plan, Walmart start to expand internationally in Mexico and Mexico has been choose as
the first stores.
The main strategy by Walmart in Mexico was the multi-format strategy,
customers can buy anything or get their needs in the same place and that time Mexico
was not that popular. By doing the expansion into the new city, Walmart can attract more
new customers and the same time dominating the market widely. Other than Mexico,
Walmart also expand the companies to China and China is the best place to expand the
companies because China has the bigger populations.

Therefore, Walmart had signed the contract to get a little stake of


Yihaodian.Com, the largers online retailers in China and if Walmart success in doing
online shopping market it can increase the revenue for Walmart. Another opportunity that
available for Walmart in China was the concept of discount store formats and Walmart
could be the first companies that used that concept because it was an attractive concept in
China that time. Other than Mexico and China, Walmart also have the opportunities to
expand the companies to Canada in food retailing sector. The competitor for Walmart in
Canada is Target and Walmart have the competitive advantage in food retailing because
Targets is limited in food retailing. Besides that, Walmart always make sure that the
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quality of the products that they offer is in good condition because Walmart is still new to
customer. At the same time, Walmart used low price strategy to attract the customer and
it was a great opportunity for Walmart to expand the companies in Canada that time.

Challenges faced the company in expanding its business internationally


1. Cultural misunderstanding

Walmart was failed to attract the customer and retail environment in Japan.

Walmart thought that Japanese would adapt to the way of Walmart operates.

Japanese people like to buy in small quantity but American like to buy in bigger
quantities, stocking up

2. Supply chain not efficient.

Lack of influence with local suppliers in the country such as Mexico.

A lot of suppliers do not deliver the stock directly to the Walmarts stores or
distribution center.

3. Competition with other stores.

Other than Walmart, a lot of stores have the same concept with Walmart. Such as
Tesco, Carrefour and also Macro.
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All the companies must compete to be the top spot in the world.

Other than that, Walmart need to compete with the companies that already
popular in that country.

Such as Japan, Walmart must compete wih 7-Eleven Japan Co.Ltd., Aeon Co.Ltd.
and also Ito-Yokado Co.

All the companies have the different strategies to make the customer be one of the
loyal customers for their companies.

4. Poor infrastructure

As we know, Mexica is the first country that Walmart choose to expand the
companies.

Therefore, the infrastructure still poor because Walmart still does not have the
experience in expanding the companies.

Other than that, the road in the Mexico is not in good condition so it is difficult to
attract the customer.

Explain how the company overcame various challenges and

conquered the overseas market.

Walmart had decided to expand the companies internationally but a lots of problem was
occurred when the first shop was operate in Mexico. The problems are Walmart had problem in
replicating its efficient distribution system in Mexico, the infrastructure was also poor, crowded
roads, lack of leverage with local suppliers and the last one was problems with merchandise
selections. Because of this, Walmart had learned from its early mistakes and Walmart had
adapted its Mexican operations to match the local environment. Other than that, when Walmart
was compete with Tesco, Walmart had decided to compete by changing the concept of the stores

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to neighbourhood market concept that Walmart will carries only groceries, product lines
typically found in a grocery market and also a pharmacy. By changing the concept, Walmart will
be the first choices of hypermarket for the customer because Walmart have everything in one
place. For the competition between Walmart and Carrefour, Walmart had decided to increase the
capacity of its Distribution center in Tianjin in autumn 2007 so that it could supply to 90
Walmart stores.

Suggest future strategies/actions that the company can adopt in overseas

market - to ensure long-term sustainability.

Future strategies for Walmart to adopt in overseas market are by increasing


customers awareness and get customers willingness to buy the product. Walmart can
keep on doing advertising through television, radio, internet and so on to get customers
awareness. Then, they also can do promoting such as give sampling and couponing to
increase customers willingness to buy the product. The importance of the promotion
tools differs, however, depends on nature of the product and the number of possible
consumers. For example, Walmart should know the current demands of customers and do
promotion of that product only. So, they can avoid from spent big expenses for

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promotion. To increase customers readiness to purchase their products by decrease the
risk related with buying something new. It can be done by allowing customers to try the
product without obligations or create a small packaging for try or test the product.
Then, the others future strategies are make a strategic alliance. Its means a
merger or acquisition combines the better of two companies. The benefit it will get such
as expands their customers, increases intellectual capital and delivers operational
efficiencies. These partners it could be new distributors so that the product would be
distributes faster. For example Walmart has done to this strategy to ensure long-term
sustainability. On Jan 28, 2010, Walmarts new worldwide sourcing plan involves the
creation of Global Merchandising Centers and makes a tactical alliance with Li & Fung, a
worldwide sourcing organization. According to Walmart vice chairman Eduardo CastroWright he said, the important basics in the firms plan to distribute even greater value to
its customers and shareholders.
As portion of this new plan, Walmart also confirmed a series of agreements
with Li & Fung that are non-exclusive agreements and do not include volume and
shipment obligations. The strategic alliance between these two corporations will let
Walmart to understand the benefit of combining a portion of its sourcing portfolio. Li &
Fung, the partner of Walmart which is creating a new company to accomplish the
Walmart account that expected to build size that would be allow it to act as a buying
agent for goods valued around US$ 2 billion within the first year. Other than that,
Walmart should progress a new market section or move into new geography. Move the
products into new groups or demographic sections its requiring to do market research.

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For example if they want produce a kid products so that the advertisement should relates
to kids advertisement to get more attention even though the cost are a bit high costly but
the expanding market segment will increase the profit.
Lastly, Walmart company should maximize their operating efficiency. They
should continually look for ways to decrease costs and maximize their operating efficacy.
In a quickly changing and stimulating global business environment, they should
continually adapt their worldwide operations system to meet current market dynamics.
They also should look for every opportunity to drive down cost at their operating system.

Conclusion
Walmarts determination to expand globally regardless of profit or loss, have given the
huge success to the company and this can seen through Walmarts power around the world and
Walmarts domination into the market. Walmarts success is a great, brilliant and remarkable
story and it created history in the business world for maintaining and keep going till now on their
businesses not only domestically, but also globally. For a rapid growing, the huge and large
retailer like Walmart corporation, best entry modes are necessary and vital to enter into a new

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market. This will ensure the efficiency and effective of a long term basis. Walmart managed to
make a successful entrance into the market even they have been facing a lot of problems and
challenges in the foreign markets and they still able to overcome their competitors in the retail
industry. Walmart make out a very strong and stable strategic management techniques and skills
in order to make a wise decision to choose their location and target countries to expand their
business. Walmart also well-known for treating and satisfying their customers orders by
offering multiple products using a low pricing strategy. Another extraordinary work done by
Walmart is the firm able to survive during a tough recessions period which slower the economy
and business growth, minimize business cycles, and rise unemployment rates. Nevertheless,
Walmart still continues its business during that time regardless of recession period. This shows
Walmart courage, determination and independences which make Walmart notable and
outstanding retailer in the industry beyond the borders.

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