...Case study analysis: "Walmart's Strategies in China" Introduction: Wal-Mart Stores, Inc. (NYSE: WMT), branded as Walmart, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's third largest public corporation, according to the Fortune Global 500 list in 2012, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Walmart. It is also one of the world's most valuable companies. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America. Walmart has 8,500 stores in 15 countries, under 55 different names. The company operates under the Walmart name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America...
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...Chinese Market Stanley Armstrong Southern New Hampshire University Abstract There has been an increasing enthrallment over global expansion across the globe. Likewise, there are many things that factor into making such an enormous decision a successful one. Some of these factors include, the strategies to which the business will use, what modes of entry they will take, and what are possible threats and opportunities that may arise. Choosing the right strategy to enter into a new market is key in determining the success of the company now and in the future. I. Introduction “Walmart Stores, Inc. was founded by American retail legend Mr. Sam Walton in Arkansas in 1962. Over nearly 50 years of development, the company has served customers and is now the world’s largest private employer and retailer, on the top of the Fortune 500 list. Walmart is among the most recognized global brands.” (Walmart China Factsheet) II. Global Expansion Lately, many large companies within the retail division who seek to increase their profits and hold a greater market share have decided to expand their companies globally. Global expansion has grown to the point where its not only attacking large companies, but has increased the efforts of those small-scale companies, those who are foreign to expanding internationally, and even those who have already ventured into international markets. There have been many up and coming retailers who have been...
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...WALMART SUCCESS IN MEXICO, CANADA AND CHINA: GLOBAL EXPANSION, STRATEGIES, ENTRY MODES, THREATS AND OPPORTUNITIES Lee Yee Mun B1000922 Help College Of Arts and Technology Bachelor of Science in Collaboration with Southern New Hampshire University, USA lemon_0611@hotmail.com Rashad Yazdanifard Faculty of Management, Multimedia University, Cyberjaya, Malaysia. rashadyazdanifard@yahoo.com 1 ABSTRACT Global expansion has been gaining a lot of attention. There are many important factors to be considered in the decision-making process such as business strategies, entry modes, and threats and opportunities in the markets. Appropriate strategies will minimize the risk of failure in international markets. The right business strategies and entry modes employed will increase the firm’s chances of success and influence the future of the retailer. Key words: global expansion, business strategies, entry modes, threats, opportunities, Walmart 1. Introduction The internalization of the retail industry has been researched widely, and majority of these studies have described the motivations and scales for international expansion by retailers (Akehurst & Alexander, 1995; Williams, 1992). Many models of internalization explains the sequence of foreign expansion, showing that companies who go international will do better in foreign markets that are similar to their domestic markets. This was why Walmart chose to enter the markets of Canada and Mexico (Johanson...
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...Context: 1. Introduction 2 2. Background of Wal-Mart stores Inc. 3 3. Retail organization internatinalization expension 4 4. International Expansion of Wal-Mart in Maxico,china and canada 5 5. Comparison of Entry Modes 6 6. comparison of Opportunities 7 7. Final touch 8 8. Conclusion 9 9.Bibliography 10 1. Introduction: Being present and having to enter foreign markets is for many companies natural, while for other it is a new challenge that they have to face. This challenge, known as market entry, consists of three major decisions: where to enter, when to enter and how to enter different markets. Some companies are forced to internationalize in the early stages of their life due to small saturated home markets, while other companies choose to go abroad because of the great opportunities new markets might bring (Peng, 2006). Once deciding to go abroad and choosing the target market and timing, companies' need to consider the choice of entry modes. Generally, to choose international firm there are six different entry modes: exporting, turnkey projects, licensing, franchising, joint ventures, wholly owned subsidiary (Hill, 2004). Each entry mode its distinctive characteristics (see, e.g., Hill, 2004; Hill, et al, 1990; Hill and kim, 1988; Anderson and Gatignon, 1986; Madhok, 1997; Brouthers and Brouthers, 2000; Bishop 2006. Selecting a suitable entry mode is a difficult decision for firms interested in entering a foreign market (Agarwal and Ramaswami, 1992). Sometimes...
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... 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 prove a great success in other countries...
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...Running head: GLOBAL HUMAN RESOURCES 1 Global Human Resources: How to create a successful global presence to insure the success of an organization in meeting its goals and mission Student Name University Name Class Name Professor Name Date GLOBAL HUMAN RESOURCES 2 Global Human Resources: How to create a successful global presence to insure the success of an organization in meeting its goals and mission Walmart achieved great success with their “Every Day Low Prices” strategy. Through supplier negotiations, Walmart has enjoyed high profits resulting in their ability to maintain low operational costs and it turn, pass that savings on to their customers. While the company’s success was largely attributed to Walmart’s ability to maintain low prices and provide exceptional customer service, they also depended on their revolutionary internal distribution process (Farhoomand, 2006). At the time of their opening in Shenzhen, the biggest challenge Walmart faces were the 700 chain store companies that were already operating in China. Until 2005 when China officially lifted distribution restrictions for foreign companies, Walmart had been forced to rely on Chinese suppliers to outfit their stores. Brief analysis Walmart’s US supply chain includes their own distribution warehouses that are strategically located within a one-day drive of the stores it served, a Walmart-owned trucking fleet that was solely responsible for the physical distribution of inventory, and a robust information...
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...Introduction 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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...Walmart’s Foreign Expansion Walmart store Inc, is the largest retail company in the United States, has built its success on a strategy of everyday low prices and highly efficient operations, logistics, and information system that keep inventory to a minimum and ensure against both overstocking and understocking. Walmart began its international expansion in the early 1990s to grow their company’s commission. They first teamed in a joint venture with Cifra, Mexico’s largest retailer, to open a series of supercenters that sell both groceries and general merchandise in Mexico. Although they faced some challenges, such as understanding their culture and buying preferences, they quickly managed to change their marketing and merchandising strategies to meet the local conditions. As they built up their distribution systems in Mexico, the Mexicans started to change their shopping habits, and now Walmart is Mexico’s largest retailer and Mexico is considered to be the company’s most successful foreign venture. Walmart continued its international expansion by establishing operations in Europe and South Korea, however the company had less success. Consumers in Europe and South Korea, seemed to have a preference for higher-quality merchandise and were not as attracted to Walmart discount strategy as consumers were in United States and Mexico. Regardless of how, Walmart had greater success in China where they have learned to adapt the Chinese culture and changed their merchandise and operations...
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...Carrefour vs Walmart Kelly Liu stared out from her office window at the traffic on Shanghai’s Yannan “gao jia” as she wondered what to do. Kelly was the head of business development for Walmart China and had a key meeting at the end of the week with her Board of Directors. After 8 years in China, Walmart was still well behind Carrefour in terms of number of stores, brand awareness and revenue. The Board had called a special meeting and asked Kelly to present Walmart’s new growth strategy. She pondered what plan to suggest. Overview In 2006, France-based Carrefour Group (Carrefour), the second largest retailer in the world, successfully completed eleven years of its operations in China. As of September 2006, Carrefour operated in China through its 80 hypermarkets. China was Carrefour's sixth largest market, with sales of over US$2.06 billion in 2005. Carrefour Comes to China As one of the first foreign companies to enter the Chinese retail industry, Carrefour played a major role in bringing about a retail revolution in the country. It leveraged its experience in the international markets and introduced a few of its global best practices into the Chinese market. Until the 1980s, the retail industry in China was fully controlled by the Government. The department stores run by the Government provided little in the way of conveniences. According to Wang Zhirong, General Manager of Tian Bai department store in Dalian, concepts like customer service and choice were...
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...important as a company expands internationally, as workplace culture varies from country to country and these nuances can determine the success of the organization. This is includes considering the current structure and allocation of resources, identifying any potential challenges transitioning into a new environment, and then determining solutions to meet the needs of the organization within the confines of its new culture. As Walmart expands its operations into China, it is critical that leadership identifies organizational changes needed before establishing operations in that country. Current Structure and Organizational Design Walmart’s current organizational structure has the business broken into three segments- U.S., international, and Sam’s Club- all under the Walmart Stores, Incorporated umbrella. Each division has its own leadership team whose President is accountable to the President of Walmart Stores. Each division runs as its own independent business, giving them more flexibility to make decisions to directly impact the business within their division. Additionally, each division maintains its own real estate, human resources, marketing, and procurement/distribution departments. Overarching leadership across the three divisions include the Chief Information Officer, Chief Financial Officer, and several other senior executive positions (Walmart, n.d.). At the store level, there are also several levels of management starting with the store or general manager. This manager...
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...company been so successful? The origin of its success has to be seek into the innovative vision of its founder Sam Walton whose central goal and philosophy was to offer shoppers lower prices than they get anywhere else. Walton's goals and philosophy have definitely strongly shaped Walmart’s culture and driven the company’s growth. Its founder innovative strategy followed by a good strategy implementation strongly supported by new technology, made the Walmart business model so successful over all these years. Such successful strategy is mainly due to the development of an extremely good distribution network and software system which has revolutionized the relationship between suppliers and retailers with mutual benefits, as well to its founder heritage management principles highly focused on customer value and service, “associates” commitment to the company achieved by means of sharing of information, ideas and profit as well, community involvement and ethic responsibilities. 2) Why haven’t competitors successfully duplicate their strategy? Walmart strategy is hard to duplicate for competitors because it is actually given by a mix of factors and company values deeply entrenched into the company history, culture and mission. While single strategic management decision can be, and effectively, have been replicated by competitors, the synergy of such strategic management decisions, which is the real key of the company’s growth and success, cannot be replicate by competitors. 3)Is...
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...Walmart: Global Strategic Expansion - Executive Summary Since introducing its first international store in 1991, Walmart has transformed itself from an American retail giant into a global one, leveraging a wealth of resources to strategically expand operations. Although Walmart must contend with several formidable competitors, the retailer has successfully opened thousands of stores across the globe; most frequently, it has added international units through the acquisition of foreign retailers, which simultaneously reduces its competition and furthers its dominance. Walmart has differentiated itself by coupling its understanding of political, economic, legal, and cultural systems within target markets with its low-cost, high-quality approach to mass retail. Utilizing simultaneous strategic multiple thrusts, Walmart has developed layers of competitive advantage to establish itself as the world’s leading retailer. Focusing on strategic expansion, Walmart currently operates 9,826 stores across twenty-eight countries, allowing it to capture global scale efficiencies by creating a coordinated and integrated network of interdependent stores. Each unit within its network is regarded as a source of ideas and capabilities, and innovation is diffused across the company through initiatives such as a market-by-market training program that helps increase the company’s responsiveness to local demands and preferences. Thus, Walmart has established itself as a transnational corporation by developing...
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...1) Walmart has already shown the ability to translate its merchandising strategies to other countries successfully. Mexico is a perfect example. This, however, takes time to do. They learned that in order to succeed initially they need to make adjustments to their merchandising strategies to fit the culture of the country they are in. Once they have done so, they can educate consumers about the benefits of the American merchandising culture. Some countries will not be willing to change their culture. But if Walmart continues to approach change the way they have they will continue to find success in countries willing to open up to change. 2) Walmart was successful in Mexico because it adapted to the Mexican culture and over time introduced them to the benefits of the American culture. When they first opened and tried to operate the American way without understanding the Mexican culture they quickly realized that when international businesses are ill-informed about the practices of another culture they are likely to fail. (1) They had to play by the Mexican rules if they wanted to succeed. International businesses need to consider employing local citizens to help them do business in a particular culture. (2) They hired managers who were familiar with the Mexican culture and allowed them to control the merchandising. This was extremely beneficial to their success. They learned that smaller stores within walking distance and changing the things they offered that best...
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...1. Business-level Strategy Walmart uses a combination strategy of cost leadership and differentiation. They provide a wider variety of products and services with the same or better quality at a price that is cheaper than their competitors can provide. Walmart concentrates on finding ways to lower their costs by constantly rethinking how to complete their primary and support activities to reduce costs still further while maintaining competitive levels of differentiation. Their successful supply chain management is an important way helping them to implement the cost leadership strategy. They has effective inbound logistics by using just-in-time inventory. And they have cut costs from outbound logistics by creating better fuel efficiency in their trucks, getting more pallets on a load, and decreasing empty miles driven by their trucks (Dess, 2012). Walmart also reduces costs by buying in large blocks. Technology plays a key role in Walmart’s supply chain too, it allows Walmart to accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, and manage customer relationships and service response logistics (Walmart's Keys to Successful Supply Chain Management, 2013). In conclusion, Walmart's successful overall cost leadership/differentiation strategy leads to high entry barriers for competitors. • Corporate-level Strategy The major reason behind the success of Walmart lies in the fact that the company believes and concentrates...
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...Aubrey Weekes Cross Cultural Perspectives The Walmart Corporation is a large, major, and successful retailer in the United States. Walmart’s attempt at branching out in countries such as China, Mexico, Brazil, and Germany has failed. Globally Walmart is not performing well; they have had difficulties in these countries. Their global revenues, “grew by a mere 1% in 2013, and its revenue per square feet declined by 4.2%” (Team, 2014). The China market does not add much to Walmart’s profits, but it is important to Walmart in regards to enduring perspective. Mexico is a principle global site, but there are many problems there also. In Germany, Walmart failed basically because they thought they could implement American standards in the stores. Walmart is handling these issues, and solving them would be their main concern (Team, 2014). Walmart Culture Issues Hong Kong, Indonesia, and South Korea are failures for Walmart, mainly due to not adhering to the cultures of these countries, and abiding a code of ethics. A couple of obstacles are food and products were placed on shelves, not in line with the country, and stores were constructed a long distance from the cities making it difficult for people to reach them. Foreign people many of them walk to stores or take public transportation. American people will travel to buy food stocking up for a month or more. Buying in bulk is a major issue in Walmart. Foreign people either walk or take public transportation...
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