PART 1

Case Discussion Questions:

1. Do you think Walmart could translate into merchandising strategy wholesale to another
country and succeed? If not, why not?

- Wal-Mart cannot translate its merchandising strategy wholesale to just any

country. It has to be willing to adapt its strategy to the local culture and the local
buying patterns, etc. For example, where Wal-Mart was successful (China and
Mexico), it adapted to meet the needs of the local shopper.I think mechandising
strategy of wholesaling is not applicable to every country. Because different
countries have different cultures and backgrounds, in order to succeed in another
country, it needs to adapt to these differences and find a way that best fits in the
local market.

2. Why do you think Walmart was successful in mexico?

- Walmart adjusted its strategy to meet the local conditions, hiring local managers
to understand Mexico's culture, they build smaller stalls that people could walk to,
and offered freshly produced products. And later on, they succeeded to change
gradually the shopping culture in Mexico.

3. Why do you think Walmart failed in South Korea and Germany? What are the
differences between these countries and Mexico?

- They are not able to benefit from economies of scale in Germany and they fail to
understand the market in South Korea. The differences between the said two
countries and Mexico is that unlike Mexico, where in Walmart they successfully
altered their shopping culture or habits, the two countries are very demanding
customers and they did not able to adapt and customizre to market.

4. What must Walmart do to succeed in China? Is it on track?

 - Another thing Wal-Mart must do to succeed in China is to embrace unions,
especially when unions in China are the tools to provide funding for the
Communist Party and securing social order. So far, I think Wal-Mart has done a
really good job in China and it is on track.

5. To what extent can a company such as Walmart change the culture of the nation where
it is doing business?

- A company cannot change a culture. But to some extent, because of the

products and good that they provide to their consumers, there is an alteration on
how people shop and buy merchandise. But that is not always the case. Just like
in Walmart in South Korea and Germany. Hence, Wal-Mart has the ability to
change the culture of some nations but it’s still very limited as proven the
countries we read about in the case

INTERNATIONAL BUSINESS AND TRADE

 Midterm Examination
Summer SY 2019-2020

A
Case Study Analysis
By
Garcia, Thea Beatrice DS.

Submitted To
Ms. Ramonita T. Salazar
PART 2

WALMART ‘S FOREIGN EXPANSION

I. INTRODUCTION

a. Company Background
- Walmart started in United States - Operating 4'200 stores on US and 3'600 in other parts
of the world. It employs 2.1 million people and started its foreign expansion in the early
1990's in Mexico. After all the customization and persistence of Walmart, it became the
Mexico's largest retailer and the country is widely considered to be the company's most
successful foreign venture. And later on, it began to expand into a number of developed
nations.

b. Time Context
- During the expansion era of Walmart, The three countries - specifically, Britain, Germany
and South Korea found itself going head to head against well-established local rivals that
had nicely matched their offerings to local shopping habits and consumer preferences.
Latterly, in 2006 Walmart pulled out of Germany due to the years of losses.

c. Viewpoint
- The CEO of Walmart

II. STATEMENT OF THE PROBLEM

1. The problem of the study is to determine why Walmart failed in Germany and South
Korea?

III. SWOT ANALYSIS

 a. Strengths
● Efficient and global supply chain
● They retail cheap prices
b. Weaknesses
● They can't compete with high quality merchandise businesses
● Extensive labor relations problems
c. Opportunities
● Expansion in developing countries
● Walmart can use its size, financial power, immense resources to dominate retail.
d. Threats
● Small scale and large online retailers.
● Cultural differences in new markets

IV. ALTERNATIVE COURSES OF ACTION

A. ACA No. 1 : Increase investment on Research and Development to understand foreign

markets before entering new market.

Pros : It is a good and a long-term investment to prevent failure before entering into a
new market.

Cons : It is more costly. It may affect their cost plan or the prices of their products.

B. ACA No. 2 : Provide more satisfaction on the traditional customers despite their low
prices products and give them incentives or benefits to maintain their loyalty.

Pros : It may engage more customers to shop at Walmart.

Cons : Difficulty in cutting down bussiness costs as to giving them the outmost
satisfaction but still in a lower price.

C. ACA No. 3 : They need to adapt on cultural habits of ones country instead of trying to
alter them.
 Pros : Recognizing the importance of culture in the business world is an important step
toward success in the international business. Understanding a country's culture is a sign
of respect. It achieves effective communication and it is a vital factor in business
success

Cons : It is contrasting to their marketing plan which is to educate consumers to

America's merchandising culture, and then latterly, they try to gradually change
consumers shopping culture.

V. RECOMMENDATION

Increase investment on Research and Development to understand foreign

markets before entering new market.

- Walmart Company need to increase its investment with Research &

Development, because it plays a very important role in the success of a
business. It may add an additional cost at Walmart, R&D is expensive and large
investments are required to implement it, but it actually it reduces your future cost
in the long run. Many companies do not understand the importance of R&D until
it is too late. By doing that, Walmart company could communicate better and
educated across diffrent cultures. Because Doing business on a global basis
requires a good understanding of different cultures. ... And in your role as an
international human resources professional, it's important to raise the awareness
of cultural issues within your organization to ensure effectiveness.