One of the best examples of the power of an explicit and systematic process to analyze the

complex set of factors involved in becoming a global player is Wal-Mart Stores Inc., the largest
retailer in the world. Its innings in the international arena started when the company inaugurated
a store in Mexico in the year 1991. Then the international chain kept on expanding to many
nations like Argentina, Canada, Germany, South Korea and Brazil. By the year 1998 the
number of international stores of Wal-Mart alone amounted to over 600 and these stores
generated a revenue of over 7.5 billion dollars (Wal-Mart Annual report, 2008)

The company is involved in the serving of over 179 million people in one year and it also
possesses over 2 million associates all over the world. The number of stores possessed by Wal-
Mart numbers to over 7, 343 and its Sam’s Clubs are also present in over 14 markets

There are a lot of strategies employed by the company and it has had a huge impact on the
local culture of retail in every nation it has occupied so far. The major strategies that are used by
the company before it ventures into another company are as follows:

Establishment of partnership with the organisations and business that are present locally
Working in close association with that of the governments of the states and nations
Trying to exploit the flourishing purchasing power of the people in the middle class (Newsweek,
2007)

Strategies for global expansion

The strategy used by Wal-Mart at the multinational level is being modified in such a way that it
becomes the transnational strategy and the key aspects of this strategy includes response at
the national level, operations at the international level and also taking lessons from the
operations that are being conducted on a global scale. The aim of the company in following
such an approach is that it should become the best choice for goods that are low cost in the
United States as well as the whole world (Fishman, 2006). As the company is basically a retail
company it stresses on the concept of orientation of the consumers by acquisition as well as
distribution of goods at a low cost and at the same time facilitating learning on a global scale by
the process of decentralisation, tackling competition over the borders and by sharing its
acquired knowledge.

But still in the global business arena, the company is relatively new and on its way to
become a leading player. The stress placed by the company on the concept of national
response has to an extent, brought about reductions in the operational efficiency of the
company because it was not able to accomplish economy of scale which is enjoyed by
the customers when it comes to the products that are standardised.

The company is involved in the formulation of blueprints for the managers when it
comes to the strategies which they are supposed to follow (Coleman, 1999).
According to the needs as well as the culture of the people there is a high level of
adaptation and the company has its location which is proximal to its market. The
company also shows a lot of sensitivity when it comes to individual needs of every
nation and also responds in an appropriate manner to these needs. There is also close
contact and co-operative working shown by the company with the respective
government so that every rule or legislation that has been passed by the government
could also be taken into account while designing the strategies. The company is also
involved in a lot of community works by provision of sponsors for the student
community and contributes its share to the welfare of the people in the nations where it
has its operations.

Success factors of Wal-Mart

Each of the stores operated by Wal-Mart is from that of the product being stocked by
the company which would move towards the equipment at the front end and this would
go a long way in helping checkouts in a rapid manner with the philosophy set by the
company in place- provision of goods at low prices every day and at the same time
providing customer services that are of top quality. Hence the added advantage of the
low costs is that the expenses incurred in organisation of promotions for sales could be
cut down to a large extent

The company firmly believes in the system of “cross docking inventory system” and
hence has invested a lot in the same. The process of cross docking has led the Wal-
Mart to attain economies of scale and this has in turn brought about considerable
reductions in the costs that are incurred for sales. In the system followed by Wal-Mart,
there is a continuous delivery of the goods to the stores in a time of maximum two days
and at times there are no requirements even to inventory them. Hence the shelves of
Wal-Mart are refilled faster than four times of the existing competition in the market
(Thomson, 1998). This is a particular advantage possessed by the company when it
comes to competition.

The power of buying Wal-Mart is leveraged by means of purchasing in bulk quantities

and also the company takes care of its own distribution. Hence every day low prices are
guaranteed by the company and hence it has become a one stop shop. Hence at
present the company owns stores in a variety of countries like argentina, mexico, brazil,
Canada, UK, Korea china and also in Germany
Single business strategy-
The major reason behind the success of Wal-Mart lies in the fact that the company
believes and concentrates on the strategy of single business. This is the strategy that
has been providing the company with success over a period of over 30 years. In the
three decades the company has never believed in the concept of diversification for the
sustenance of its growth and also its advantages at the competitive level. Hence the
services provided by the company and the low prices offered are the major reasons
behind its success.

The competitive advantage gained by a company depends on the efficiency existing in

the system of operation of the company and also on the degree of efficiency of the
supply chain. The chain of stores owned by Wal-Mart is highly successful only due to
the ability of the company in the distribution of the merchandise from that of a huge
network of distribution centers that are modern and are in turn served by means of truck
fleet that is private. Wal-Mart has also been highly efficient in the maintenance of a
good position in terms of the instock and also in the filling of the shelves that are in the
new stores being established by the company every year

Anything else- https://www.ukessays.com/essays/management/market-entry-

strategies-of-wal-mart-in-the-international-arena-management-essay.php

Entry Strategy- This link has entry strategies too but I’m not
sure if you’ll need them. Still
https://www.ukessays.com/essays/commerce/entry-strategy-used-by-wal-mart-commerce-
essay.php

Walmart & International Marketing Strategy: What NOT to

Do
1. You can’t copy-paste your formula onto every new market you enter- When
entering a new market, you cannot rely on former glories to inform your future plans of
action. You can’t force people to bond with your brand if it isn’t something that speaks to
 them on a foundational level. Instead, reimagine yourself in the context of your new market
each time you expand.

2. Be aware that your business model may be a product of the culture in which it was born.
Certain aspects of your strategy, especially those that are directly tied to cultural norms and
expectations, may flop when exported abroad. Hire someone from your target market with
experience in localizing brands and let them go over your brand image and presentation with
a fine-toothed comb. With their outside perspective, they’ll be able to find potential problem
areas that wouldn’t be as obvious to you.

3. You can’t shoehorn yourself into a market that doesn’t need you. The allure of a new market
might be tempting, but you’ll only wind up frustrated if you’re a square peg attempting to fit
into a round hole. Odds are that when you enter a new market, you won’t be stepping into a
vacuum. There might not be someone exactly like you, but unless you’re on the bleeding
edge of your industry, the people in your target market will have been getting by without you.
Your challenge is to present them with a value proposition that they simply can’t refuse. This
is no small feat, but if you can pull it off, you’ll be golden.

4. Don’t accept mediocrity. If your new market can’t provide something you need, make your
own. When it comes to getting your product or services to your customers, there’s no
understating the importance of local infrastructure. Make sure you know exactly how each
aspect of your business will function — on its own as well as in relation to your overall supply
chain and delivery mechanisms — to ensure your grand entrance isn’t spoiled by logistical
hiccups. Consider creating your own distribution or supply networks if your target market is
lacking in this regard.

Challenges faced at the time of expansion

There are many challenges that face the company in the expansion effort ranging from government
regulations to culture and competition. The company faces external as well as internal problems.
The external problems are amplified in the company’s expansion efforts. Internal problems entail the
company viewing itself as unbeatable via competition hence ignore smaller competitors as was the
case with Wal-Mart in India.
For example, the company ignored small traders operating roadside stores. The management later
realized that gaining market share held by the small traders was a huge challenge. The small traders
enjoy the support of the local community who detest western companies.

The company has previously been accused of low wages, gender discrimination, being strict with
suppliers, and destroying small local business due to its financial endowment. In this regard,
countries such as India and South Korea ensure that they have strict regulations that discourage
foreign investors such as Wal-Mart.

The international business arena is always plagued by cultural difference challenges. This is one of
Wal-Mart’s biggest hurdles in its attempt to globalize. In the Asian market, the local communities
meet the company with resistance. To start with, the company is seen as encroaching and grabbing
the business opportunities for the local smaller traders (Basker 2005a, p. 176).

In some cases, the local business communities pressurize the authorities to deny the company the
permit to operate. The communities seek to protect their interests by dragging in the community. The
difference in culture is also a factor that the company has to contend with when attempting to open
new stores in the Asian retail market.

Wal-Mart’s International Division is responsible for conducting research in the prospective markets. It
has been successful in this front. However, it has failed to establish the consumer preferences that
are driven by culture in some markets such as a majority of the Asian countries.

The company has various conflicts with clients forcing it to approve amendments that will not see it
shut down its stores. In the Asian context, Wal-Mart faced challenges upon its entry into China.
Small-scale traders with the owner as the attendant typically sell retail items similar to those stocked
by Wal-Mart. The locals are familiar with the owner and interact freely.

These stores are usually packed, noisy, and dirty. However, they are operating at low prices. When
Wal-Mart attempted to introduce the concept of hypermarket, offering clean outlets, well spaced, and
sales for the people to attend to the customers, the consumers felt uneasy.

They were accustomed to doing their shopping in absolute privacy where they only dealt with the
owner one person at a time. Wal-Mart’s approach required the consumers to alter the shopping and
purchasing habits and anticipations when buying goods from the stores.
When conducting global trade, it becomes inevitable to take care of the state policies. In the US,
Wal-Mart is a powerful investor. However, in other countries, it is just an overseas investor seeking
to exploit the financial and human resources of the country.

The federal law of India prohibits global retailers from directly investing into the Indian economy.
Wal-Mart has been a victim of the regulations forcing it to enter the huge market through joint
ventures. The Indian government is relatively young in terms of policy infrastructure. The community
norms are deeply embedded onto the society’s mindset.