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Case Study: The Globalization of
Walmart
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Case Study: The Globalization of
Walmart
Answering Questions
Question 1
Why has Walmart viewed
international expansion as a critical part of its strategy?
International
expansion is critical to Walmart's expansion strategy because it determines how
much the business can grow. The case study indicated the 'need for expansion'
as the first key reason Walmart wanted to expand to its first global venture in
1991. According to Gupta
(2018), Walmart's' global expansion was critical because its success would
determine how much the business would grow. As a strategic decision, the
management must consider venturing into global business independently or
collaborating with a local business. One of the key considerations for this
determination was triggered by the existence of cultural, political, and financial
differences between different economies that Walmart aimed to target. For
example, America is predominantly stable financially, and many citizens could
afford most of the products the business dealt with. Also, America has a more
diverse, robust culture. This could not be said for other surrounding economies
like Mexico and China. This balancing made the global strategy very crucial for
Walmart.
Question 2
What did Walmart do to
enable the company to achieve success in Latin America and China?
Walmart
wanted to understand the politics of doing business in foreign lands. For
example, in China, Walmart realized it would be impossible to succeed in
business independently and liaised with politically connected firms within the
region. This understanding of the political atmosphere made it easy for Walmart
to understand the rules and other nitty-gritty of doing with the Chinese
government. Over time, Walmart was well-acquitted with the dynamics of foreign
business law, created a good relationship with foreign authorities, and at the
same time, managed to retain the American shopping experience. The second attribute
of Walmart's success in Latin America and China is its understanding of the
social fabrics and recognizing that relating with other businesses would be easier
for it to navigate to success. For example, in its first international store in
Mexico, Walmart partnered with Cifra (A Mexican business) on a 50-50 business
ownership and control basis. This allowed Walmart to drive its strategy and get
protection from social-cultural shock from experts who had interacted with the
Mexicans for a long time. These two approaches are the main ones that drove
Walmart's expansion strategy, even with increased political and social-cultural
differences between the United States, Asian, and Latin American communities.
Question 3
What should Walmart do, or
not do, to help ensure that the company achieves success in India?
First, Walmart should focus on culture research by involving the target market segment. Despite its huge population, India has very reserved mannerisms, ways of life, and a culture ingrained in people's lives. This means Walmart products had to conform to the community's expectations. One way of ensuring Walmart understands the target market's desire is through thorough market research by engaging Indian experts. Understanding the target...
