Wal-Mart Question: 1 Why has Wal-Mart viewed international expansion as a critical part of its strategy? Wal-Mart invested over half a billion dollars in IT and satellite facilities to connect its worldwide stores to headquarters. Head- quarters could complete stock-taking of each item for more than 4,000 stores worldwide within an hour. Wal-Mart started to expand abroad in 1990s and it opened its first store in Mexico, in 1994 it began operations in Canada. Moreover, its oversea expansion was in Argentina and Brazil in 1995. China in 1996, Germany in 1997, South Korea in 1998, the UK in 1999, and Japan in 2002. By 2003, Wal-Mart operated more than 2,740 discount stores and supercenters and 500 membership warehouse in the United States, as well as more than 1,170 stores of different formats in international markets. Although the company derived the bulk of its revenue from the United States, international expansion would continue, particularly in Asia. Wal-Mart experienced some disappointments in Asia. In Indonesia it was forced to dissolve its joint venture in 1997 and it pulled out of Hong Kong in the 1990, having failed to crack the local market. Consumers seemed to prefer neighborhood chain stores that were familiar to them. However, Wal-Mart continued to expand into larger and more stable markets.
Wal-MartQuestion: 1Why has Wal-Mart viewed international
expansion as a critical part of its strategy?Wal-Mart invested over
half a billion dollars in IT and satellite facilities to connect
its worldwide stores to headquarters. Head-quarters could complete
stock-taking of each item for more than 4,000 stores worldwide
within an hour. Wal-Mart started to expand abroad in 1990s and it
opened its first store in Mexico, in 1994 it began operations in
Canada. Moreover, its oversea expansion was in Argentina and Brazil
in 1995. China in 1996, Germany in 1997, South Korea in 1998, the
UK in 1999, and Japan in 2002. By 2003, Wal-Mart operated more than
2,740 discount stores and supercenters and 500 membership warehouse
in the United States, as well as more than 1,170 stores of
different formats in international markets.Although the company
derived the bulk of its revenue from the United States,
international expansion would continue, particularly in Asia.
Wal-Mart experienced some disappointments in Asia. In Indonesia it
was forced to dissolve its joint venture in 1997 and it pulled out
of Hong Kong in the 1990, having failed to crack the local market.
Consumers seemed to prefer neighborhood chain stores that were
familiar to them. However, Wal-Mart continued to expand into larger
and more stable markets.
Question: 2What did Wal-Mart do to enable the company to achieve
success in Canada and Latin America? Why did Wal-Mart fail to
achieve similar success in Europe?
Question: 3What should Wal-Mart do or not do to help ensure that
the company achieves success in China and India?
Wal-Mart had a significant presence in only a few countries in
Asia. One of its key challenges was to persuade Asian customers to
embrace the hypermarket and warehouse concept. Most Asian customers
were used to shopping daily at wet markets or neighborhood stores.
They tended to take public transport or walk to ship near their
homes, and they preferred fresh produce rather than refrigerated
foods. The result was that Asian customers tended to make smaller,
more frequent purchase than Wal-Marts typical customers.
