...Management Across Cultures 1 March 2015 Abstract Walmart is one of the world’s largest and most well-known retailers in the world today. It has achieved great success in areas like Mexico and Canada; however it has also seen failures in other areas like Germany and Hong Kong. This paper will discuss a brief history of Walmart’s global expansions and the strategies it chose to enter these markets. It will answer the following specific questions: When did Walmart enter the global expansion? What international markets did Walmart enter? What cultural challenges has Walmart faced? How did Walmart overcome these challenges? Where future expansions and opportunities are possible? To answer these questions, this paper will have four basic sections: A brief history of Walmart’s global expansion, what was their strategy with each expansion, cultural differences they faced, and where is Walmart going in the future. This paper will attempt to examine the strategies of its global expansion and how it used the challenges to continue success in future expansions. Walmart is the most well-known and largest retailer in the world today; with sales worth more than $200 billion, $35 billion of that from Walmart’s International Division. The company grew incredibly fast both in the United States and abroad. By tweaking entry modes, and studying the cultural differences and local threats, the core business strategies Walmart chose to build its business on in America would...
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...long-term objectives, the company has three main goals: (1) overseas growth, (2) continuous adaptation and (3) sustainability 360 program. Certainly, the biggest objective is to even expand more so that overall profits can be increased. There is still plenty of room for growth and many untapped markets for Walmart such as huge parts of Europe, Russia and Africa. Due to the recession, more and more people seek merchandise at a very low price because most likely that is the only thing they might be able to afford. Walmart’s second objective is to (2) continually adapt to new cultures and traditions. The firm has faced many problems in the past when entering foreign countries by attempting to use an ethnocentric approach instead of slightly adjusting their management styles to the needs and wants of the new shoppers. As a consequence, this previously used strategy has forced the company to leave particular markets such as Germany and South Korea. In order to manage the situation more efficiently, Walmart plans to learn more about the actual country before entering in order to make sure that the plans will benefit both: the company itself and the host-country. Lastly, Walmart has introduced a (3) sustainability 360 program in February 2007 to strive for a greener and more environmental friendly leadership. Its three main goals are to be supplied by 100 percent renewable energy, to create zero waste in all operations and lastly to sell products that sustain resources and the overall...
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...Lovisa Björcke 900313-‐0961 Cross-‐Cultural Management Summer Course Assignment 4: Case Study – IKEA: entering Russia Introduction This case study describes IKEA’s entrance on the Russian market and the many obstacles the company was faced with. As IKEA’s Russian country manager Lennart Dahlgren stated; everything that was not assumed to be a problem turned out to be a problem and everything that was assumed to be a problem was in fact not one. IKEA dealt with many problems relating to culture during the launch in Russia but dodged them all surprisingly well. I believe that the most important factor why IKEA could solve these problems was because of their smart way of adapting their concept to the Russian market and because of the company’s strong organizational culture. Below I will present the main problems I have identified and ...
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...Wal-Mart to Turkey TABLE OF CONTENTS Introduction 3 Wal-Mart 4 - 5 Location Turkey 5 - 8 Economic Situation 8 - 10 Political Situation 10 - 11 Competition 11 - 12 Target Market 12 - 13 Global Market Participation 13 Marketing Research 14 - 15 Trading 15 - 16 USA vs. Turkey 16 - 17 Wal-Mart Failure in Germany 17 - 18 S.W.O.T. 18 - 21 Marketing Strategies 22 - 25 Conclusion 26 - 27 Exhibits 28 - 30 References 30 - 32 INTRODUCTION Wal-Mart has dominated the retail industry globally. From it’s humble start in Bentonville, Arkansas it has strived to improve the standard of living throughout the world. Wal-Mart is aware of the risks expanding into relatively underdeveloped countries, but they have not allowed any aspect to hinder their confidence. Expanding internationally will increase its global market share, and they understand the need to address cultural barriers within each market to succeed. Turkey has experienced tremendous growth in the retail sector, adding to its appeal and readiness for the Wal-Mart invasion. Can Wal-Mart succeed in a place like Turkey? We look at the economic, political and cultural environment of the country; what kind of competition will they be looking at and who is the target market. How did Wal-Mart get their start and how did they succeed in other countries other than their home base? The actual location is important to look at, as we analyze the country we look at the GDP, possible Pro’s/Con’s and the...
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...in "thirteen international markets" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 395). They began in Mexico, in 1991. From there they moved into Canada (1994), Hong Kong (1994), Brazil (1995), Argentina (1995), China (1996), Indonesia (1996), Germany (1998), South Korea (1998), the United Kingdom (1999), Japan (2002), Guatemala (2005), El Salvador (2005), Honduras (2005), Nicaragua (2005), Costa Rica (2005) and India (2007). Although they were not successful in every market, Wal-Mart is looking towards the future and the possibility of moving into Russia and South Africa. 1991 Wal-Mart made its first appearance in the international market in Mexico City. "The company used a 50-50 joint venture" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 396). Although they were not a new chain, Wal-Mart still made a few mistakes when entering a new country. "They had a huge American-style parking lot… [however] customers came in via buses not cars" (Mahajan-Bansal). They also made mistakes with product mix, trying to sell products that were not needed and sometimes not usable. They quickly figured out how to solve these small problems and Wal-Mart is now the number one retailer in Mexico (Mahajan-Bansal). 1994 Wal-Mart "entered Canada by acquiring 122 Woolco stores" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 397). Wal-Mart is the second largest retail chain in Canada (Bianco). It...
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...structural and operational efficiencies in a bid to outpace competitors. Furthermore, new players from other retail segments and industries are ramping up their retail presence. For example, big-name manufacturers including Apple, P&G and Nike are now bypassing traditional retailers and reaching consumers directly through multiple channels. Growing numbers of retailers are going international—and small wonder. Home markets are saturated, but markets near and far, particularly in emerging economies, still offer white space (see Figure 1). The world’s largest retailers are entering more and more countries (see Figure 2). 2 Figure 1. A billion new consumers1 Consumer spending in the G6 and B6 (real US$ billions, at Purchasing Power Parity) B6 2009 2030F CAGR 6.4% G6 2009 2030F CAGR 1.8% Top 15 conumer markets in 2025 (private consumption, US$ billions, at PPP) China United States India Japan Brazil Germany Russia Mexico France UK Indonesia Italy Iran South...
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...Walmart's history is one of the best examples of innovation, leadership and success. Walmart was founded by Sam Walton in 1962; it was incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world’s largest and the most emulated retailer. Some researchers refer to Walmart as the industry trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. Walmart operates in each store, from the products it stocks in the warehouse, to the front-end that helps speed checkout. Walmart’s philosophy: provide everyday low prices and superior customer service worked the best. Lower prices also eliminated the expense of frequent sales promotions and sales are more predictable. Walmart has invested heavily in its cross-docking inventory system. Cross docking has enabled Walmart to achieve economies of scale which reduce its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to stock them. This allows Walmart to refill the shelves 4 times faster than its competitors. Walmart controls its buying power through purchasing in bulks and distributing the goods on time. Walmart guarantees everyday low prices and considers them the one stop shop. Walmart operates in Mexico as Walmex, in the UK as ASDA abbreviation of Asquith and Dairies...
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...IMPORT An import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions. "Imports" consist of transactions in goods and services to a resident of a jurisdiction (such as a nation) from non-residents. The exact definition of imports in national accountsincludes and excludes specific "borderline" cases. A general delimitation of imports in national accounts is given below: * An import of a good occurs when there is a change of ownership from a non-resident to a resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair)...
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...difficult for the new entrant to compete on cost, quantity produced and price. P&G also has the first mover advantage. Distribution network: Access to existing distribution channels is a substantial barrier that new entrants have to face. Supermarkets and other retail stores have a limited amount of shelf space available for consumer goods. It is difficult for new entrants to fight for these shelf spaces as the brand recognition, consumer relationship of P&G makes it difficult for new entrants to get shelf spaces. Legal barriers: Legal barriers can also make it hard for new entrants to enter the personal products industry. A new entrant has to overcome many regulations, laws, patents, and copyrights that they have to abide by when they are entering into an industry. It is a research oriented industry and hence has lot of copyright and legal issues. This almost eliminates the threat of a new entrant in the personal products industry. Power of buyers Although P&G is an extremely large company, its future is dependent on its buyers. P&G is heavily dependent on Wal-Mart and its affiliates for generating a major part of its revenue. Sales to Wal-Mart and its affiliates have represented approximately 15% of its total revenue...
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...Walton (Chairman) Doug McMillon (President & CEO) | Products | Apparel/footwear specialty, cash & carry/warehouse club, discount store,hypermarket/supercenter/superstore,supermarket, eCommerce | Revenue | * * US$ 476.294 billion (2014) * US$ 468.651 billion (2013) | Operating income | * US$ 26.872 billion (2014) * US$ 27.725 billion (2013) | Net income | * US$ 16.022 billion (2014) * US$ 16.999 billion (2013) | Total assets | * US$ 204.751 billion (2014) * US$ 203.105 billion (2013) | Total equity | * US$ 81.339 billion (2014) * US$ 81.738 billion (2013) | Owner(s) | Walton family | Employees | 2.2 million (2013) | Divisions | Walmart Canada | Subsidiaries | Asda, Sam's Club, Seiyu Group,Walmex, @WalmartLabs, Walmart eCommerce | Website | Corporate.Walmart.com Walmart.com | Executive Summary: Wal-Mart has shown continued success in their use of information technology with e-commerce, a system that allows managers to view point-of-sale information, and the possible use of RFID chips in the near future. After reviewing the 2005 Harvard Business School study of Wal-Mart, it is evident that this company has been successful in expanding its operations in several foreign markets. Wal-Mart had established itself as the largest retailer in both Canada in 2003 and Mexico in 2004. Through acquisitions, partnerships, and go-it-alone strategies, Wal-Mart began the expansion of large-scale operations in other countries...
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...4th Quarter 2010 | 25(4) THEME OVERVIEW: FUNDAMENTAL FORCES AFFECTING AGRIBUSINESS INDUSTRIES Kent Olson and Mike Boehlje JEL Classifications: Q13, L10, L22, M22, L80 Keywords: Agribusiness, Market Forces, Structural Change, Porter’s Five Forces Agribusiness industries are facing numerous challenges and opportunities resulting from various fundamental forces. An understanding of the forces that are shaping and shifting the competitive landscape is useful to not only understand the strategic positioning decisions of the firms in these industries, but also the dramatic structural changes that are occurring in the food production, processing and distribution sector. This series of articles discusses the fundamental forces creating change in the agribusiness industries, and how companies and decision-makers are being affected by, and adapting to, changes in these forces. We frame this discussion using the analytical concepts of value chains and Porter’s Five Forces. We describe the agribusiness value chain as two chains which become one at the consumer end (Figure 1). One value chain follows plants and plant products, and another chain follows animals and animal products. These two chains blend into one chain at the processing and retailing stages of the chain. We also view the value chain rather simply as four stages: (1) input suppliers; (2) producers; (3) processors and handlers; and (4) retailers. While the value chain could be viewed as specific for different products...
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...14:05 Page 563 section 4 case studies cases 4.1 Wal-Mart’s German Misadventure 4.2 Handl Tyrol: Market Selection and Coverage Decisions of a Medium-sized Austrian Enterprise 4.3 Blair Water Purifiers to India 4.4 A Tale of Two Tipples 4.5 Kellogg’s Indian Experience 4.6 Strategic Alliances in the Global Airline Industry: from Bilateral Agreements to Integrated Networks 4.7 GN Netcom in China 4.8 IKEA: Entering Russia 4.9 The ‘David Beckham’ Brand 563 571 574 583 586 590 594 599 604 case 4.1 Wal-Mart’s German Misadventure I don’t think that Wal-Mart did their homework as well as they should have. Germany is Europe’s most pricesensitive market. Wal-Mart underestimated the competition, the culture, the legislative environment. — Steve Gotham, retail analyst, Verdict Retail Consulting, October 20021 We screwed up in Germany. Our biggest mistake was putting our name up before we had the service and low prices. People were disappointed. — John Menzer, head of Wal-Mart International December 20012 ‘Don’t look now:’ low prices all year round! With thanks to Walmart 563 IntMk-CStud-4.qxd 26/05/2005 14:06 Page 564 section 6 case studies section 4 German blues For the world’s largest retailing company, Wal-Mart, Inc., the German market was proving difficult to crack. By 2003, even after five years of having entered Germany, Wal-Mart was making losses. Though Wal-Mart did not reveal these figures, analysts estimated losses of around $200–300 million...
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...Confirming Pages CONTENTS PREFACE xv PART 1 CHAPTER 1 GLOBAL MARKETING ENVIRONMENTS 1 Understanding Global Markets and Marketing 2 markets are becoming global 2 globalization: the world is becoming smaller 3 globalization and global marketing 4 Globalization: Opportunity or Threat? The Global Marketing Approach 6 6 global marketing and global markets 7 the cage distance framework 7 domestic and global marketing compared 8 Geographic or Spatial Distance 10 Psychic/Cultural Distance 12 The EPRG Framework 13 Developing Global Marketing Strategy 14 The Standardization versus Localization–Adaptation School 14 Levitt and the Globalization of Marketing 16 Standardization versus Mass Customization 17 Managing the Firm’s Value Chain 18 Global Value Chain Configuration 19 Integrating the Firm’s Competitive Strategy 20 Global Competition 20 a global marketing management framework Global Marketing Performance 22 Global Vision—The World Is My Oyster CASE 1-1 CASE 1-2 CHAPTER 2 21 23 A Tortuous Road Ahead for Proton of Malaysia 26 Dabur—Developing Values in an Emerging Economy Through Value Chain and Product Line 31 Assessing the Global Marketing Environment—The Global Economy and Technology 36 the global economy 37 Economic Growth and World Trade 37 Who Are the United States’ Major Customers? 38 High Tech Products Lead World Trade 40 Characteristics of High Technology Markets 42 Technology and Global...
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...Global Marketing 7e Warren J Keegan & Mark C Green Chapter 02 The Global Economic Environment Presentation adapted by Alfred Lowey-Ball For (International) Marketing management course Fall semester 2014 UBI-BA2 Brussels Chapter 02 Outline (The Global Economic Environment) 2-0 2-1 2-2 2-3 2-4 2-5 2-6 Introduction The world economy—an overview Economic Growth stars Classification of countries by income Market opportunities in DCs World population trends Dealing with currency risks 2 2-0 Introduction • The level of economic development in the target country is a major determinant of global market potential and opportunities • Globalization and forms of freemarket capitalism prevail almost everywhere today • Since the 2008 financial crisis, however, much uncertainty has crept in. 2-3 2-1 The World Economy—An Overview • The world economy has changed profoundly since WWII: in the western world, trade boomed and GDP rose constantly at a 2-3% rate… • Globalization (economic integration) was estimated to be 10%; today it is 50% (by some measures) and still rising • Global companies have arisen to respond to global market demands and opportunities, global competitors have displaced local ones 2-4 Growth of world GDP Figure 1.1 Growth of Real World GDP, 1975–2005 500 – 450 – 400 – 350 – Volume 300 – 250 – World GDP ~$70 Trillion today World population 7,1 Billion 200 – 150 – 100 – 1975 1980 1985 1990 1995 World GDP 2000 2005 ...
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...Cong meets over FDI in retail: Is a rollback on the cards? Will FDI last? FDI nod given, global retailers wait for more clarity The world is waiting FDI in retail What is ? Retail battle: It’s finally about politics and numbers, not FDI he Congress is hell-bent on pushing through its proposal for foreign direct investment (FDI) in retail. It says the move would create jobs and curb inflation besides creating infrastructure which the agriculture sector lacks. However, the bigger motive is to fight the overwhelming perception that the government is caught in a policy paralysis and is unable to take decisions. The entire opposition is against the move. The argument here is entry of big global players such as Walmart,...
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