The first store was opened in 1962 by Sam Walton. Wal-Mart has well over 3,000 stores worldwide. emphasis on customer satisfaction and always low prices Problems Adapting to local taste Wal-Mart revised its merchandising in Brazil and Argentina Competition from Carrefour No control of distribution system Logistic issues Late in adapting credit culture
Losses forecast Wal-Mart to lose $20 million to $30 million in Brazil few shoppers are in the store during peak hours one Sunday Little difference between the goods at Wal-Mart and those at near by Carrefour Wal-Mart stocks 58000 items compared to Carrefour which stocks 22000 items Wal-Marts troubles in South America stem partly from its own mistakes Some goods are useless in San Paulo Ex) Live trout, American footballs, Cordless tools stock-handling equipment that didnt work with standardized local pallets computerized bookkeeping system that failed to take into account Brazils wildly complicated tax system
Analysis Q1 Investment in diversified markets to avoid risk Decrease competition Increase revenue Increase customer base Take advantage of low cost countries
Q2 Allows purchase from low cost countries Creates optimal logistic networks Quick deliveries to customer
Q3 Helps in demand forecasting from warehouse to suppliers Helps in inventory management
Q4 Challenges to be face in north America due to US recession Higher operating cost due to increase in oil prices Wal-Mart could invest in other countries like Europe, Africa, Asia etc
Q5 Risk faced Currency fluctuations Cultural barrier Government regulations Suppliers performance Human resource Customer expectations