Case Study Walmart achieve success
Wall-Mart started out as a store set to provide goods to those In rural areas who did not readily have access to household Items.
As they grew, the stores expanded into more urban areas they continued to grow. Once they were securely embedded in the community, the company decided it needed to branch out more as they looked to the future. This is when they decided to create a “superstore” that would provide one stop shopping for consumers. No longer was it necessary to go get groceries at one location and go somewhere else for the household goods, everything could be purchased In the same place.
The establishing of the grocery market was what prompted the desire to grow Internationally.
Many foreign countries did not have a standard grocery store prior to the growth of Wall-Mart, many Just had local markets that they purchased product from but with Wall-Mart expanding there is now a more generalized location for these communities to get all the necessary products in the same location. The company is also working directly with suppliers to ensure delivery of fresh products and continue the domestication of the foreign countries.
2.To achieve success In the foreign countries they attempted overall different ways to approach the markets, learning from each new location. They looked towards areas initially that were growing countries rather than large established nations.
They looked towards Mexico first, and rather than try to assume that they know exactly what the market wants and needs, they entered using a 50-50 joint venture. Doing so helped Wall-Mart to better understand the country, its culture and the market they were entering. It allowed for them to make better decisions regarding the products they sold and how they were going to market the products to the people.
Learning that the American way of life isn’t the answer for everyone. Some of the early mistakes were simple things, like learning different products won’t work at different altitudes or that the need for a giant parking lot may be a necessity in the United States but that this isn’t as much as an issue for countries like Mexico where the population in these areas rely more on public transportation rather than personal vehicles. They used a similar approach when they continued to emerge In the Into Brazil, embarking on another Joint venture with a major retailer however this mime, they were the majority position in the organization.
They continued to use their knowledge and expertise when they moved into Argentina they were able to do so without any form of partnership but as a wholly owned company. As the years progressed, they were able to buy the controlling interest in Caviar and renamed it. The transition into Brazil wasn’t always smooth sailing. There was tension due to the Tooting Tanat some AT ten local retailers Ana Ana tons caused a price war Detente ten companies. The other problem Wall-Mart faced was the other retailers already had a throng relationship with producers in the area much to the detriment of Wall-Mart.
Because of this, Wall-Mart shifted their focus to not Just saving people money but allowed them to focus on their customer service and they also provided a broad mix of merchandise that many of the other local retailers couldn’t afford to do. This has resulted in Wall-Mart being the 3rd largest retailer in Brazil in 2008. Currently the stores are also giving much back to these communities, investing in the people, it is the largest employer in Latin communities and it uses its cost setting strategies to alp make these areas a more affordable place to live.
Because of the “everyday low prices” idea, many places have to drop their prices in order to stay competitive with Wall-Mart. This has allowed to keep inflation prices low as well.
As Wall-Mart emerged into the Canadian scene, they used a similar approach to what they did in Latin America, only this time rather than embarking on a partnership, the corporations went in and bought out the Wool stores and using that as a way to expand. The purchase included 122 stores, and quickly started to restructure them into a very Americanizes store. They decided to do their business similar to how Wall-Mart in the United States operates.
As they look towards the future, Wall-Mart is preparing for the arrival of Target stores, and they feel they are prepared to take on the corporation. They have continued to evaluate their stance and keep prices competitive by dropping them. The company entered the European markets, in Germany and the United Kingdom but they struggled to stay open and heed to German markets.
In order for a company to be successful, they need to have a complete understanding of he countries culture and way of life. This is not something that German markets were able to understand and embrace. They were also filling open management positions with those who are local and the result was a lack of feeling and respect for the other country. In 2006 Wall-Mart sold off its German operations and took their losses.
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The company needs to continue to take the approach of looking towards the culture and how they can embrace that into their business and use it to be successful. Recognizing that China is an up and coming country, knowing that they re continuing to grow and take on the United States as one of the largest competitors is what makes this so appealing to Wall-Mart.
The company had to brace themselves for the restrictions that the country would place on them, they are not a democracy run nation and there were many obstacles for them to overcome. In addition to the obstacles placed by the government, there were the differences in the people as well. Housing in China is relatively small; they are not used to having an abundance of things compared to the culture of the United States.
The way they live s not like us, Americans buy in bulk, especially if we think it’s going to save us money or cut down on the number of trips we may have to make to the store but this isn’t how Chinese society operates.
The company had to look at all these differences and evaluate what items they should carry. They also found that the way that Americans prefer to buy meat was not embraced by the Chinese culture. We prefer to have ours pre-packaged and ready to go, but the Chinese prefer the flexibility of picking out what they want while it’s still moving so the organization created more of an “open IR” market feeling and brought that into the store. They have also shifted their focus on tenet target consumer.
In ten unlace states Ana some Torrent countries, ten Touch is on “Everyday low prices” and geared toward lower income people.
This is not their focus in China however; they are focusing more on the Middle class as the lower class can’t afford to shop at the store. They carry inexpensive items but also carry more upscale products than they may carry in other locations. Wall-Mart is currently working to acquire the retail giant “Trust Mart” in the hopes that it will become the arrest retailer in China.
As Wall-Mart looks to India for possible investment and continued growth there are additional obstacles to overcome there as well. They know this is a growing nation with disposable income, perfect for what Wall-Mart is looking for. But there are problems with the bureaucracy and a lack of solid infrastructure is a major deterrent.
The government embraces small inefficient firms and is opposed to working with large growing firms. The large corporations will take the cost control away from the government and put it in the control of the market, not meeting that they want to let happen.
There is concern that the will be no more successful there than they were in Germany or that they will focus on rural areas rather than the urban markets where people won’t be able to access the stores as much. And there is always the concern that they will come in and push out the smaller mom and pop stores causing more detriment to the nation. There is the hope that by emerging on this economy can increase not only export but help local farmers to grow their business as well, however recent accusations of bribery are causing problems for the potential expansion.
