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Wal-Mart Changes Tactics to meet International Taste

Reasons for Global Expansion:

In 1996, Walmart major revenue source countries was United State. Wal- Mart try to
enhance it presence in the other foreign countries. In this year only 4.8% of their total
revenue comes from foreign countries (Canada). Reason behind the opening the branch in
other countries to increase their revenue and profit and enhance their presence in the other
world market. Other reason for expansion was they don’t want to depend on the particular
country’s economy. They wanted to diversify their risk and business in other countries.

Beneficial for Walmart to have supplier in different countries:

Having many suppliers from other countries would enhance quality of product and reduce
the cost of acquisition of goods. Walmart tagline every day low pricing force Walmart to
reduce their prices compare to their rival.
Strong Centralized Control:
Strong centralized control helps Walmart for aligning their corporate strategy with local
operation. Centralized control is helpful for fulfilling of corporate objective of Walmart.
Centralized Control also helps in taking the quick action against any circumstances.Wal
mart wanted strong centralized control because Walmart has years of local expertise in
retail operation but they don’t know about the other countries taste and preference. So
that they create a new system by combination of their experience and other countries taste
and preference.
Pitfalls and Opportunities:
One of the major concern for Walmart was political instability in South Americal cities.
Due to recent economy crisis and degrowth of aregentina economy, Walmart facing
certain difficulties. They were presuming if Argentina government start giving preference
to local companies instead of foreign companies it would be major shock for Walmart.
And the other side American dollar gain in value against Argentina currency, Therefore
Walmart cost of acquisition becoming expensive compared to local competitors.