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Questions 1 What are the internationalisation drivers Walmart International has struggled with? 2 What might be the dangers for a large Western retailer in staying out of emerging markets?

Questions 1 What are the internationalisation drivers Walmart International has struggled with? 2 What might be the dangers for a large Western retailer in staying out of emerging markets?

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Illustration 9.1 Walmart: International successes and failures The biggest retailer in the world has found that internationalisation is considerably more challenging than expansion at home. in contrast to Walmart's home-based experience where customers drive to out-of-town stores and fill their cars Walmart began its international operations in 1991 and today the UK, Brazil and China are its largest markets outside the US. Walmart International grew constantly up until 2016 with large multi-packs. While it encountered a completely with sales of $118bn (£85bn, €106bn) in 2017, accounting for about 25 per cent of Walmart's overall sales. It included close to 800,000 employees in over 6,300 stores and 11 e-commerce websites in 28 countries. Internationalisation different international market it also faced large regional variations in this vast and multi-ethnic country. It has also struggled with local regulations and food safety issues and tough competition from Carrefour. After some disappointing years with international results have, however, been mixed as Walmart has struggled to understand local buying patterns, competitors, culture sales dropping over 10 per cent Judith McKenna, a long- and regulations, not the least in emerging markets. Walmart first entered the Americas and has since time Asda Executive and Executive Vice President of Strategy, was promoted to President and CEO of Walmart International in 2018. She has partly shifted the strategy towards more mergers, acquisitions and partnerships: in India the largest online retailer Flipkart was acquired expanded into ever more distant geographic markets. The early entry into Canada and Mexico was successful, but South America's largest market, Brazil, has been consider- ably more challenging. After two decades it is still losing and in Brazil the majority stake in the operations was money there. Its challenges include regulatory problems, sold and in Latin America Cornershop, a fast-growing strong competition from the French supermarket chain Carrefour and being unable to convince shoppers about important step forward in accelerating the company's... Walmart's 'everyday low prices' model. European expansion performance has similarly been nology and capabilities will strengthen our successful mixed. The acquisition of the ASDA Group in the UK was rela- businesses in Mexico and Chile and provide learning for tively successful even though it has struggled against local competition lately. In Germany Walmart experienced eight Sources: Dudely. R. "Wal-Mart's everyday low prices fail to stir Brazil- years of struggle that ended in a market exit. First, it did not have enough scale economies compared to local compet- itors, like Aldi, with strong relationships with German suppliers and already catering to price-conscious consumers. Second, cultural mistakes were made as customers did not approve of American service practices. A third challenge was Walmart attempts international turnaround with UK, India tie-ups'. Germany's then strict regulations on location and opening 29 April 2018. Reuters; Judith Mckenna, Walmart President and CEO hours. German workers also resisted Walmart 's workplace customs, resulting in labour union conflicts. Walmart's first Asian expansion into South Korea met strong local competition and failed to meet local customer needs; it also ended in exit after eight years. China has been more of a mixed picture. On the one hand sales have steadily increased; over 400 stores have been established and they make a profit. On the other hand, the cultural distance was considerably larger than first anticipated. An early discovery was that Chinese consumers prefer frequent shopping trips online grocery app was acquired: "The transaction is an growth in Latin America... [their] digital expertise, tech- other markets in which we operate. ians', Bloomberg Business, 23 April 2014; Felsted, A., 'Chinese grocery sales forecast to rise by a Financial Times; Thomson Reuters Street Events, 'Wal Mart Stores Inc 22nd Annual Meeting For The Investment Community', Edited Tran- script, 14 October 2015; L. Whipp, "Walmart to close 269 stores as it revamps online presence', 15 January 2016, Financial Times; N. Bose, rd: Food & beverages, 24 August 2015, in: J. Webber, "Walmart boosts LatAm ecommerce push with Corner- shop purchase", 13 September 2018, Financial Times. Questions 1 What are the internationalisation drivers Walmart International has struggled with? 2 What might be the dangers for a large Western retailer in staying out of emerging markets?
Transcribed Image Text:Illustration 9.1 Walmart: International successes and failures The biggest retailer in the world has found that internationalisation is considerably more challenging than expansion at home. in contrast to Walmart's home-based experience where customers drive to out-of-town stores and fill their cars Walmart began its international operations in 1991 and today the UK, Brazil and China are its largest markets outside the US. Walmart International grew constantly up until 2016 with large multi-packs. While it encountered a completely with sales of $118bn (£85bn, €106bn) in 2017, accounting for about 25 per cent of Walmart's overall sales. It included close to 800,000 employees in over 6,300 stores and 11 e-commerce websites in 28 countries. Internationalisation different international market it also faced large regional variations in this vast and multi-ethnic country. It has also struggled with local regulations and food safety issues and tough competition from Carrefour. After some disappointing years with international results have, however, been mixed as Walmart has struggled to understand local buying patterns, competitors, culture sales dropping over 10 per cent Judith McKenna, a long- and regulations, not the least in emerging markets. Walmart first entered the Americas and has since time Asda Executive and Executive Vice President of Strategy, was promoted to President and CEO of Walmart International in 2018. She has partly shifted the strategy towards more mergers, acquisitions and partnerships: in India the largest online retailer Flipkart was acquired expanded into ever more distant geographic markets. The early entry into Canada and Mexico was successful, but South America's largest market, Brazil, has been consider- ably more challenging. After two decades it is still losing and in Brazil the majority stake in the operations was money there. Its challenges include regulatory problems, sold and in Latin America Cornershop, a fast-growing strong competition from the French supermarket chain Carrefour and being unable to convince shoppers about important step forward in accelerating the company's... Walmart's 'everyday low prices' model. European expansion performance has similarly been nology and capabilities will strengthen our successful mixed. The acquisition of the ASDA Group in the UK was rela- businesses in Mexico and Chile and provide learning for tively successful even though it has struggled against local competition lately. In Germany Walmart experienced eight Sources: Dudely. R. "Wal-Mart's everyday low prices fail to stir Brazil- years of struggle that ended in a market exit. First, it did not have enough scale economies compared to local compet- itors, like Aldi, with strong relationships with German suppliers and already catering to price-conscious consumers. Second, cultural mistakes were made as customers did not approve of American service practices. A third challenge was Walmart attempts international turnaround with UK, India tie-ups'. Germany's then strict regulations on location and opening 29 April 2018. Reuters; Judith Mckenna, Walmart President and CEO hours. German workers also resisted Walmart 's workplace customs, resulting in labour union conflicts. Walmart's first Asian expansion into South Korea met strong local competition and failed to meet local customer needs; it also ended in exit after eight years. China has been more of a mixed picture. On the one hand sales have steadily increased; over 400 stores have been established and they make a profit. On the other hand, the cultural distance was considerably larger than first anticipated. An early discovery was that Chinese consumers prefer frequent shopping trips online grocery app was acquired: "The transaction is an growth in Latin America... [their] digital expertise, tech- other markets in which we operate. ians', Bloomberg Business, 23 April 2014; Felsted, A., 'Chinese grocery sales forecast to rise by a Financial Times; Thomson Reuters Street Events, 'Wal Mart Stores Inc 22nd Annual Meeting For The Investment Community', Edited Tran- script, 14 October 2015; L. Whipp, "Walmart to close 269 stores as it revamps online presence', 15 January 2016, Financial Times; N. Bose, rd: Food & beverages, 24 August 2015, in: J. Webber, "Walmart boosts LatAm ecommerce push with Corner- shop purchase", 13 September 2018, Financial Times. Questions 1 What are the internationalisation drivers Walmart International has struggled with? 2 What might be the dangers for a large Western retailer in staying out of emerging markets?
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