Wk 4 Assignment - Walmart Case Study

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University Of Arizona *

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Marketing

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Feb 20, 2024

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“Walmart is the world’s largest retail company with continued plans for global growth” (Carbonara, 2018). Therefore it is expected that international expansion will help further its growth and maintain its remarkable status within the global market. “Walmart’s international division has established more than 6,360 stores outside the United States; it is already the biggest retailer in Mexico and Canada. Other store locations include Central America, South America, China, and, until recently, Germany” (Green & Keegan). However, the focus of this paper is to summarize elements in the Philippines that may impact the market opportunity for Walmart’s expansion into that country. Next is a discussion of a market expansion strategy and an analysis of marketing channels that may create the best utility for Walmart’s customers in the Philippines. Lastly, a SWOT analysis of Walmart’s online store to determine competitive advantage. Moreover, an analysis of marketing channels, expansion strategies and economic environment for Walmart’s expansion into the Philippines can determine whether there will be enough competitive advantage in order to increase their global presence. The political, economic and cultural environment of the Philippines are key elements that Walmart can consider before embarking on an expansion strategy. “The administration of current President Rodrigo Duterte, who has been in charge since mid-2016, has turned the Philippines into an increasingly authoritarian political system which still maintains a formal democratic shell” ( BTI 2022 Philippines Country Report , n.d.). Furthermore, “the Philippine economy has also made progress in delivering inclusive growth, evidenced by a decline in poverty rates and its Gini coefficient” (The World Bank, 2022). At the same time, from a culture point of view the Filipino people enjoy music and partying, they love art, food and fashion, most importantly, they are very religious. “Studies have shown that Filipino middle classes tend to strive for Western brands and lifestyles, resulting in status symbols such as air conditioners and new practices such as eating out in fast food chains” (Never, et al., 2021, p. 595). With that being said, the political, economic and cultural environment within the Philippines can positively impact Walmart’s market opportunity. Walmart may be experiencing a decline in their competitive advantage in the United States, however, global expansion into other developing countries such as the Philippines can offer new ways to compete on a global level. Walmart should use the acquisition market entry strategy for its global expansion in the Philippines, “this strategy can provide the buyer with quick growth as well as access to existing brand suppliers, distributors, and customers” (Green & Keegan, 2020). On account of the many potential barriers that may occur using another market entry strategy, Walmart stands to benefit from acquiring local retail businesses that have long standing relationships with local customers. In addition, “marketing channels exist to create utility for customers” (Green & Keegan, 2020), utilities such as time, place, information and form. With time utility, customer demand for products and services should be fulfilled at their time of need, Walmart stores are famous for having their shelves stocked with everything needed for Christmas, Easter, Halloween etc. Next is place utility, customers can enjoy the convenience of going to an actual Walmart location where they can purchase products. Instead of having to go to a factory or warehouse, customers can value the actual physical store in their neighborhood. Then there is information utility, “ the availability of answers to questions and general communication about useful product features and benefits” (Green & Keegan, 2020). Customer service relationships are very important for any business, therefore with sound information utility, customers tend to return bringing with them friends and family. Lastly, Form utility allows customers to enjoy the finished product,

packaged, labeled and ready for use. There is a certain level of appreciation that comes from purchasing a product that has all its components in the right place and works effectively, that is how form utility is displayed. Walmart’s target market within the Philippines can be defined as the low to middle income families/households. With a marketing strategy that will show potential customers the value of goods and services being offered, there will be an increased likelihood that Filipinos will embrace the cost saving and economic lifestyle that Walmart offers. Similarly, the combination of these four utility marketing channels when implemented with a thorough target market research will provide the competitive advantage needed to create enough excitement about Walmart expansion in the Philippines. SWOT Analysis for Walmart.com Strengths Weaknesses Adaptation of e-commerce trend with everyday low prices Covid-19 has changed the way people shop, consumers are comfortable shopping online and Walmart strengthened its e-commerce market by offering everyday low prices to customers. E-commerce markets are saturated with competitors Walmart.com has many competitors that offer similar products and services, such as Amazon.com, Aliexpress.com, eBay.com, and Target.com just to name a few. Opportunities Threats Acquisitions and Alliances Walmart recently acquired Flipkart based in India. This acquisition will strengthen its sales channels and help capitalize on any online sales opportunities. Economic/political downturn Current inflation and recession market trends can affect how people shop. Many countries during election years encounter unrest that creates fear and panic and as a result people tend to reduce their purchases to items that are a necessity. In conclusion, it may be safe to note that Walmart’s global expansion strategy in the Philippines has potential to thrive based on the elements that surround their political, economic and cultural environments, coupled with an effective market expansion strategy and utility channels. Likewise, the market entry strategy of acquisition allows for companies such as Walmart to enjoy the long standing relationships that were developed over time with the locals. The efficiency and advancement that Walmart offers can be beneficial to everyone involved and the SWOT analysis provides some insight into what's happening now and what can become an issue in the future. All in all, Walmart’s potential expansion plan in the Philippines has a positive outlook.

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