The Globalization Aspects of Walmart
This case study the major retailer Walmart and how it has ventured into international business. Starting back in 1950, owner and founder Sam Walton opened a small general store in Bentonville, Arkansas called Walton’s 5&10 (Walmart Corporate, 2019). Inspired by his early success from his dime store, it wasn’t until 1962 that he opened his Walmart in Rogers, Arkansas. From there Walmart has developed into the largest retail store in the world brining in over $480 billion annually. Walmart has almost monopolized the industry in fact, bankrupting several other retailers such as K-Mart, and Sear’s. One of the only major retailers that remains strong today is Target.
Towards the end of the 1980’s and 90’s Walmart thought that it had grown to its max capacity within the United States and began to make plans to grow internationally. Walmart opened its first store in Mexico in 1991. Today Walmart has over 6,300 stores internationally and is continuing to grow at a rapid place. I have even noticed that Walmart, much like Amazon, now sells name brand products as well. You can absolutely buy Nike and Under Armour from Walmart, it will just have to be online and through a third-party seller, much how Amazon does all of their business.
[bookmark: _Hlk24887509] Walmart’s growth internationally did not come without trials and tribulations though. While staying in the America’s it was noticed to be a fairly smooth transition. Of course, there were some growing pains, like the lack of managerial and organizational skills, but for the most part success was able to kick in. It wasn’t until Walmart sought to open in China that it came in contact with issues. Their first being location. Retail much like in real estate, location is the key to success. Beijing had restricted operations for all foreign retailers, including the requirements for government-backed partners and also limited the number and locations for stores (Geringer, McNett, Minor, & Ball, 2016, pg. 255).
Walmart was able to find a home in China in a city named Shenzhen, which is a growing community on the border of Hong Kong. Walmart began to have some serious growing pains while learning how to conduct business in China. For example, Walmart no longer tries to sell extension ladders or a year’s supply of soy sauce or shampoo to Chinese customers simply because the majority of the people in that given location tend to live in apartment complexes with limited storage space (Geringer, McNett, Minor, & Ball, 2016, pg. 255). The next major issue that Walmart ran into with China was that their government wanted the majority of the products to be locally sourced which was an issue since Walmart prided themselves on having the American shopping experience. Because of this, Walmart was to source approximately 85% of its products in the Chinese stores.
The next major market goal for Walmart is the anticipation of opening up to the billion-person market in India. So far strict government barriers have prevented Walmart or any other foreign-owned retailer for that matter from finding success in India but John Menzer, the former head of Walmart’s international operations said “many smart people-much smarter than I, believe that India could be the next China” (Geringer, McNett, Minor, & Ball, 2016, pg. 255).
Walmart views international expansion as a critical part of their strategy, because as I previously stated, there isn’t much more room for growth for them herein the United States. In the 1980’s and 90’s Walmart about maxed its capacity in the United States taking over the retailer business, and discovered that in an effort to continue growth and profit, they needed to move internationally to keep their competitive edge.
Walmart initially found success in Central and Latin America before moving over to China. It found its first form of success with its very first store internationally in Mexico City, Mexico. To achieve this success, Walmart found success in a partner, Cifra, that was able to provide expertise in operating in the Mexican market. From there, Walmart merged with and took the majority of a company called Lojas Americana when it moved to Brazil. Finally, Walmart started its venture in China in Shenshen when it formed a venture with two politically connected Chinese partners. If you notice, there is sort of a trend here. Walmart finds an area, then finds a partner that is the subject matter expert of said area then ventures with that partner to achieve success for both.
I think that Walmart should do exactly what they did in going into China. They should find a partner that has political representation and go about inserting themselves in a legal fashion that keeps them in the good graces of the government. Walmart should also look at the area where they are moving as well. You don’t want a lot of electronic devices in an area where there is no electricity. Unless you start with the selling of portable generators. Bringing people power that do not have it could be a huge success. Any conveniences that are lacking that can be brought for a low price would be a very smart move. Not only will it improve the economy and the lifestyle of the people but it will also build lasting relationships which can definitely help a growing market.
Culture is defined as the customs, arts, social institutions, and achievements of a particular nation, people, or other social group. Understanding the culture of the nations that Walmart wanted to venture into was a huge part of their international success. The text gave a perfect example when it said that Walmart learned early not to offer a year supply of goods or sell ladders in a certain area in china because the majority of the people living in that area had limited storage due to confined space in apartments. However, I wouldn’t rule out the option to be able to order such products for people who still desired them. Another big piece that culture plays into this falls right under customs. for example, should Walmart move into India and sell produce there, in an effort not to offend. They probably don’t want to sell beef there seeing as how the cow is a sacred animal in the Hindu religion.
This is the process by which the economic well-being and quality of life of a group of people whether it be a township, region or country are improved. The text makes perfect sense of this when it says “a nation’s level of economic development affects all aspects of business conducted there, and international managers encounter markets with widely differing levels of development” (Geringer, McNett, Minor, & Ball, 2016, pg. 255). In other words, the products that Walmart sells to a small town in nowheresville where the average person makes $4 a day isn’t going to have the same products for sale or at least not at the same inflated prices as they would in downtown Houston, Texas because the people of the smaller town simply will not be able to afford it.
Political forces are parties, personalities, or pressure groups that strongly influence economic and political stability of a country through action and pronouncements. In the case of this study there were a lot of political force involvement. The text says that “the results of government intervention in trade are well understood. When governments impose trade restrictions, the cost of traded goods increase” (Geringer, McNett, Minor, & Ball, 2016, pg. 135). In this case study that is exactly what happened to Walmart. Initially Walmart received push-back from China stating that they could not be in Beijing, so they found a political partner and was able to use them to find success on where to go and what to sell in the local area.
Risk mitigation in Walmart A retail store built by Sam Walton is working at 6500 zones all around with the assistance of 1.8 million agents. The standard philosophy of Wal-Mart is the course of action of best nature of stock and organizations in any event sensible expenses for purchasers. Their standard low costs technique is used overall refund stores, especially for clothing, little machines, housewares, devices, and even hardware and altogether at markets. Wal-Mart furthermore has a lot of contenders...
Introduction International expansion has been slowly gaining much consideration from all industries that planned to expand overseas. Significant factors that must be measured in the decision-making procedure will be business approaches, entry methods, and threats and prospects available in the marketplaces. Suitable strategies used will also help to decrease the risk of disappointment in the global markets. When a company makes the right choice of business guidelines and entrance modes, the corporation will then be able to prosper in the...
Introduction: Selling goods or services to customers through several channels and to earn a profit is a complex concept of knowledge and skills. Walmart stands first in the world as a retailer serving more than 324 million customers with 20,000 stores in 28 countries. Whether it is in-store purchases or social mentions or any other online activity, Walmart has always been one of the best retailers in the world. Walmart ensures its best service to the customers by keeping customer...
Introduction Walmart started as a small-scale company with a solo discount store that had the simple idea of selling more products at less prices. Ultimately, it grew into one of the top retailers in over a half-century in the world. In other words, it has around 11,200 stores with approximately 265 million customers under 55 posters in 27 nations and has an electronic Commerce website in 10 countries. Moreover, according to 2018 fiscal year survey, Walmart hires over 2 million...
Walmart is a multinational retail company that has started as a small discount store with their mission to sell more items for a cheaper cost. They first opened for business in 1962 in the United States in Rogers, Arkansas and later established a Walmart Canada in 1994. They are located in 27 different countries with their Canadian headquarters located in Mississauga, Ontario. With over 11000 retail units worldwide, it is no wonder why Walmart is deemed the world’s largest retail...
American corporations currently hold leading positions in the world. This concerns both their size and their competitiveness and role in world markets and in the global economic system. The leadership foundation of the American companies in the global economy is a socioeconomic and institutional system formed as a result of many years of historical development based on liberal economic and democratic political principles. There are large and successful corporations in many developed countries, but nowhere else do they have such...
Background and history of Walmart Inc. The American Multinational retail store Walmart was founded by Sam Walton who has prior Joined the military in 1942 at the age of 24. In the year of 1945 after their military service ended, he started operating his own variety store. Sam was inspired by the success of his dime store, he got the courage to keep satisfying his customer’s needs. (Walmart, n.d.) At the age of 44, Sam opened the first Walmart Discount...
Executive Summary This proposal will highlight some issues in Wal-Mart, which is giving a negative prospect to the business success wise. Those issue will be examined which will be related to underpaying staff, loopholes in organizational strategy and some cost related analysis. Introduction Wal-Mart was established in 1962by Sam Walton when he was 44 year in Arkansas. The company became front-runner worldwide in merchandizing business from year 1970 and onward after it got public (Walmart.com, 2016). Company made great profits...
Introduction to the Company Walmart Incorporated (hereinafter “Walmart”, “Company”) founded in 1962 and incorporated 1969., is an American multinational retail corporation. It operates a vast, extensive and formidable chain of discount stores and hypermarkets, and is currently of the largest retailers on the planet. To be more specific, Walmart holds first place as the biggest company in the world by revenue and the number of employees, as well. Walmart’s headquarters is in Bentonville, Arkansans, and despite its initial efforts to...
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