Case4_Notes - Walmart began expanding worldwide, with mixed...

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Walmart began expanding worldwide, with mixed success. They adjusted to the local framework and customer taste in foreign countries, but did not change their three main ingredients: Walmart and Sam’s choice brand names, Every Day Low Prices, and ethical standards. Walmart believed customers were alike across the world, and this strategy worked well in Mexico, Canada, China, Japan, and the UK, did somewhat well in Argentina and Brazil, and failed in Indonesia, South Korea, and Germany. Most of their failures could be contributed to a clash of cultures. Nevertheless, Walmart is exploring other avenues for growth – like India and Russia. Walmart International was set up to oversee global opportunities EDLP makes the supply chain more effective Acquired the majority share of: o CARHCO: 360-store supermarket operations in Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua o Seiyu Ltd.: Leading Japanese retailer Waiting too long to get into foreign countries would give competitors a lead that would be difficult to close o Already too late? Difficult for retailers to globalize New overseas markets too at least three years to become profitable, and five years to post an acceptable return o Long-term investment o Menzer took cautious approach Picked up new ideas from around the world Mexico (SUCCESS) Controlling interest in Mexico’s largest retailer, Cifra o Became “Walmart de Mexico” o Different formats that served different segments of the population 640 stores Accounted for 2% of Mexican GDP Modified products for local consumers Start-up problems (tennis balls and huge parking lots) o Employed Mexicans to take care of product decisions o Scolded Citra from deviating from EDLP Negotiate price discounts from suppliers because of powerful position Argentina (MEH) Start-up problems o Aisles were too narrow for large amount of traffic o Argentinean-preferred meat cuts and jewelry were absent Country struggling due to political and economic instability o Crashed in 2002 o Double-digit inflation o Consumer spending fell 11 supercenters Brazil (SUCCESS?) Stiff competitor: Carrefour o Built hypercenter right next to Walmart’s first supercenter and made twice as much Stiff competitor:
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Case4_Notes - Walmart began expanding worldwide, with mixed...

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