Walmart Around the World-10!13!2014

Walmart around the World Question 1. We assu assume me you you have have alre alread ady y been been fami famili liar ar with with Walma almart rt's 's so sour urce ces s of  competitive advantage in other classes or references. Could you summarize Walmart's competitive advantages in U.S. and its business model We have studied before the supply chain of Walmart and how it led the success in America. We believe Walmart's success accounts its greatest portion for its excellent operational management, which is in other sense its c ompetitive advantage. First of all, the business strategy of Walmart is "Every ay !ow rice #E! strategy$", which attracts customers by offering the products with the lowest price. %ts fuctional fuctional strategies strategies are exceptionally exceptionally well&aligned well&aligned to E!. E!. hus their strategies strategies are strategically fit. %n terms of the supply chain, Walmart shows an efficient supply chain. %t has relatively little variety of products #less customi(ed$, longer production lead×, high set&up costs, and larger batch si(es that allow the firms to supply at a low unit cost. he six ma)or drivers #facility, inventory, transportation, information, sourcing, and pricing$ and their roles are also critical in creating this characteristic. For instance, Walmart has purchased and been operating its own logistics system #transportation driver$, and could ta*e advantages in terms of inventory costs. All the supply chain factors of Walmart mesh perfectly well together to lower its supply costs and thus enable the E! strategy.

Question !. "valuate Walmart's globalization strategy over the last two decades. Where did did Walm Walmar artt stru strugg ggle le  Where Where did did it do well well  Can Can locat locatio ion n char charac acter teris isti tics cs e#plai e#plain n the the diff differe erenc nces es in Walm Walmart art perfo perform rmanc ance e What What are are the the loca locati tion on characteristics that affect its performance +ur team team has summa summari(e ri(ed d whethe whetherr Walma Walmart rt has strugg struggled led or succee succeeded ded in different countries #we scored them in a  points scale$, and the characteristics of these locations on the table below. -ome explanations are also followed by. Country 

Success

Location Characteristics

 /Region

Score

 /Walmart's strategies strategies

exico





/sed exican center and brought E! strategy into the

country 

0AFA helped the extension



1heap labor force was available

1anada

Argentina



6



2uci*ly changed mista*e



3etained former employees



Ac4uired poorly managed company



-imilar to Walmart5s /- stores but differentiated



W7+ local partner



Expanded using smaller stores8 similar with exico and

9ra(il

9ra(il

1hina

:

:



/sed /-&based format



-low to adapt to local tastes in 9ra(il



1overed up both northeastern and southern part



!aunched middle mar*et targeted middle class



1ompetitive ar*et



/rban intensive life



issed target positioning



Ac4uired poor chains



rice oriented tough competition and customers5 high

loyalty on existing mar*et ;ermany

-outh =orea

<

<

/=



 ?apan

6

1entral America 1hile

Africa



@

:



-uppliers5 strong loyalty on existing competitors



-trict regulation on pricing and location



-trong influential labor union



1ultural difference in consumers opposed to /.-.



-ervice&oriented



>alued luxurious image



1ustomer focused on different values



Ac4uired retailers that had similar business model to /.-.



1ompetitive ar*et



/nsuitable starategy #!ow rice with !ow 2uality$



Ac4uired ma)or retailer



Allowing store5s local identity



Ac4uired successful domestic payer



!ocal partner has similar customer and operations to /.-.



!ocal partner5s other business entice customers



+perated under assmart



!oose competition



!ac* of infrastructure



1orrupted government

ence, we believe the locations' distinctive social cultures #mar*et, orgni(ational,

consuming behaviors$, geographical features #residential$, political factors #regulations, trading barriers$, and other retail industry status all affected the performance of  Walmart.

Question $. What are your team's recommendation to a company which is researching any global operations in the retail industry +ur recommendations to global operations in the retail industry are shown below in regarding to the four location characteristics that affected the performance of  Walmart. Characteristic

Detailed recommendations

s Social Cultures



1onsuming and organi(ational behaviors differ greatly. %t is

hence highly recommended to deploy a thorough research on the consumption patterns, and hire local employees. #ref. ;erman case$ 

opulation density and accessibility must all be considered.

Geographical

%ndustries should be located in the areas within the local customers

Features

interest, and with high accessibility to distribution systems and infrastructure. 

!ocal regulations and international agreements affect operation

Political

and management. %t must be chec*ed whether international treaties

Factors

and local regulation are favorable to entry and operation. #ref. exico case$ 

%f the industry status is similar to that of domestic mar*et, it

Industry 

could possibly retain its core competencies by ac4uiring similar

Status

companies. #ref. /= case$ %f not, the best option seems to be ac4uiring a local networ* or company with high performance records.