Any corporation that is registered and has operations simultaneously in more than

one country is referred to as a multinational corporation (MNC), sometimes known as

a transnational corporation. Usually, a firm operates fully or partially owned
subsidiaries in other nations while maintaining its headquarters in one particular
nation. The corporate headquarters receives reports from its subsidiaries.
Currently, there are over 40,000 multinational corporations operating in the global
economy, in addition to approximately 250,000 overseas affiliates running cross-
continental businesses. One perfect example of it would be Walmart, formerly known
as Wal-Mart Stores, Inc., an American operator of discount stores that was one of
the world’s biggest retailers and among the world’s largest corporations.

Walmart's primary strategic objective is to offer consumers high-quality goods at

reasonable prices. Its operational objectives center on effective inventory
management and logistics, which call for technology to help cut costs that are then
passed on to customers. The cross-docking inventory method is one of Walmart's key
operational innovations. Cross-docking is the technique of transferring goods
directly from the receiving dock to the shipping dock. Cross-docking lowers the
cost of maintaining inventory as well as the costs of moving materials and filling
orders. Additionally, Walmart has a transportation infrastructure that facilitates
the delivery of goods from the warehouse to the store. Because of this, Walmart can
refill its stores more quickly than its competitors. Walmart has become the market
leader by employing the straightforward method of selling goods for less money.
Walmart increases its purchasing power, expands its operations, and reduces
expenses by using effective logistics. Declining prices and therefore shrinking
profits are one of Walmart's problems. Wal-Mart has seen declining gross margins in
some product categories due to rising operational efficiencies and the import of
Chinese goods onto the US market. Walmart receives non-cash compensation totaling
over $140 million per month. As a result, Walmart has the chance to build its bank
and enter the banking sector, saving a lot of money on the costs associated with
processing third-party electronic payments.

An organization must select one of the appropriate modes of operation while

pursuing international business. The two most common forms of international trade
are exporting and importing, particularly for smaller businesses. The main sources
of international income and expenditures for the majority of nations are the export
and import of goods. Walmart still tops Fortune's Global 500 list with annual sales
of almost $570 billion. Walmart is now the largest firm in the world by revenue,
having held the top spot for nine years running.

Imports and exports are vital components of every day life for retail giant Wal-
Mart Stores, which is why the retailer monitors trade legislation and political
ideologies which could disrupt the product supply chain. It is safe to assume that
Walmart imports far more than it exports. As Lisa Schimmelpfenning, vice president
of direct imports administration at Wal-Mart Stores, recently spoke about the
retailer’s efforts to build up import program over the past two decades. Wal-Mart
declined to disclose the value of its imports and exports each year. However,
according to The Journal of Commerce, Walmart has been the top importer of consumer
products in the United States since 2012. The retailer's imports frequently exceed
the total trade of entire nations. Wal-Mart brought in 795,900 TEUs, or shipping
containers, full of merchandise in 2015. According to a report from the Journal of
Commerce, the retailer's import volume increased by 10.5% in 2012.

A plan that aids a business in achieving its objectives is called a business

strategy. It comprises strategies for operations, marketing, and other disciplines.
Creating a competitive advantage for a business is the goal of a business strategy.
Different types of company strategies exist. Cost leadership, differentiation, and
focus are a few common examples. A Corporation may employ one or more of these
tactics depending on its objectives. Walmart's business strategy is effective in
their other subsidiary companies, while some plans or approaches didn't work out.
But it is safe to assume that overall, Walmart's business strategy is successful.

Walmart's strategy is basically based on cost leadership, IT, logistics, and

customer orientation. Meanwhile, in order to be effective and remain competitive in
the global market, Walmart has adopted several strategies. First, the company’s
multi-domestic strategy in the US, which resulted in successful penetration, has
been adjusted to satisfy the needs of the host countries. Walmart has been so
popular with its strategy of lowest prices and incorporating some of its American
products to
its retail outlets abroad. However, Walmart needed to change its US-focused
products and included a variety of products that caters to the demand of host
countries. Second, Walmart is moving towards a transnational strategy to
effectively utilize local and global competencies. The company is taking steps to
achieve a balance between global standardization of operating strategy and local
customization of store layout and practices. In addition, the company has used
acquisitions and joint ventures for global expansion, it has around 6148 stores
globally and accounted for 16.7% of international sales.

Meanwhile, Walmart’s globalization strategies have revealed some weaknesses. First,

in China, many Chinese products, which are of very low price, have been seen on the
shelves of Walmart. This resulted in negative marketing and perception of buyers
from other countries who thought that commodities from China are substandard.
Second, the company has also been blamed for unethical
practices for selling the products at a very low price, making it difficult for
other retailers to compete. Third, Walmart does not possess a visionary strategy,
unlike its close rival Kmart in the USA. The company’s management policy does not
have clear guidelines and strategies on how to be successful in the future.

There are significant experiences that Walmart has learned from its past
globalization strategy efforts. In China, the company was quite surprised by an
entirely different retail set-up in the country compared to the US. There are
thousands of mom-and-pop shops and many Chinese buyers are reluctant to drive and
visit retail shops. Walmart tried to adapt and use their own strategies, such as
they targeted middle-class consumers by removing the ELDP model but offering more
upscale products and goods that interest middle-class consumers. Meanwhile, the
company did not have significant success in Japan and South Korea using its ELDP
model because Japanese and Korean consumers are more of quality rather than price-
conscious. Walmart has to adapt other pricing
strategies, such as price skimming, value-based pricing, dynamic pricing strategy,
and high-lowpricing strategy, rather than its usual ELDP model. Finally, the price
is a significant factor that usuallyattracts consumers however it is not always the
case.

International expansion has a lot of advanatages, one of the biggest would be new
sales. Increased sales equals more revenue, which can often lead to further
business expansions. But of course, there is also disadvantages. One of it would be
the culture barrier. One of the challenge of Walmart's expanding internatonally is
trying to understand the local shoppers. Reports from India and China highlight
Walmart’s long-standing dilemma: Management must learn to understand their local
customers and local customs in every country they serve. Customers are very fickle.
India and China offer a good example of this challenge. Large stores are looked
upon as being expensive – it is the smaller neighborhood stores that are viewed as
offering lower prices since the customer believes their expenses are lower. Never
mind that the Walmart supply chain offers wonderful price advantages via bulk
purchasing. In both China and India food is generally not bought in bulk because
customers feel that they can find fresher items in smaller stores and in small
quantities. The challenge is that Walmart has to convince their potential costumers
of the quality and freshness of the food, and that the general merchandise offered
is of high quality despite its low price. In addition, Chinese customers are weary
of recent scandals involving tainted meat, contaminated milk and questionable
cooking oil. As a result, the Chinese customer equates Walmart’s everyday low
price policy as being cheap and not very safe.

That is a sharp contrast to the way consumers view Walmart in the United States,
where the big stores get recognition for low prices and well-known brands are seen
as underscoring the high quality of product.

This is not the first time that Walmart has been challenged by local customers. In
2006 Walmart exited Germany and South Korea because the management team did not
understand the habits of the typical customer who shopped daily. Daily shopping is
also the norm in India and China. The customer in these countries does not have a
large kitchen nor do they have large refrigerators to store bulk items. In most
homes they cannot store food for more than a couple of days. As a result most
Chinese and Indian shoppers go to market daily – sometimes even more than once a
day. And mistakes do not go unnoticed by the local competition. In India there
are competitors operating hypermarkets such as “Big Bazaar” and “Spencer’s.” In
China there are also big stores like the fast growing Beijing Hualian Group which
attract many shoppers in some of the major cities. This lack of understanding of
local customs and customers is in contrast to what is happening in the United
States, where Walmart has been very aware of customer views. For example,
management has intensified its drive to focus on Made in USA products. Originally
it was to be $50 Billion of merchandise that would be brought back to the USA in 10
years. This has been upped to $250 billion in the same 10-year period with the
support of the Walmart Innovation Fund which is awarding grants of $100,000 or more
to non-profit organizations to create solutions on how to grow domestic
manufacturing. It is a move Americans applaud, since it will create jobs in the
United States.

Limitations
This study focuses solely on Walmart's operations and how it conducts business in
various nations. Our research focuses on publically accessible records that are
available online because of time restrictions and access restrictions to people who
are directly involved in this case.

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