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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?

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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The biggest retailer in the shoppers about Walmart's 'everyday low prices model. In 2016, they restructured the Brazil world has found that operations and closed 60 outlets, accounting for internationalisation is 5 per cent of its sales. European expansion results have similarly been mixed. The considerably more acquisition of the ASDA Group in the UK was relative successful while Walmart experienced challenging than expansion at eight years of struggle in Germany that ended in home. a market exit. First, they did not have enough scale economies compared to local competitors, Walmart began its international operations 1991 like Aldi, with strong relationships with German and today the UK, Brazil and China are their suppliers and already catering to price- largest markets outside the USA. Walmart conscious consumers. Second, cultural International is the company's fastest growing mistakes were made as customers did not unit with sales of $141bn (£85bn, €106bn) in approve of American service practices. A third 2015, accounting for about 30 per cent of challenge was Germany's then strict regulations Walmart's overall sales. It included close to on location and opening hours. German workers 800,000 employees in over 6,200 stores and 11 also resisted Walmart workplace customs, e-commerce websites in 28 countries. resulting in labour union conflicts. Walmart's first Internationalisation results have, however, been Asian expansion into South Korea was similar to mixed as Walmart has struggled to understand the German story with strong local competition local buying patterns, culture, competitors and and failures to meet local customer needs. It regulations, not the least in emerging markets. ended in exit after eight years. China has been Walmart first entered the Americas and has more of a mixed picture. On the one hand, sales since expanded into ever more distant have steadily increased - over 400 stores have geographic markets. The early entry into been established and they make a profit. On the Canada and Mexico was successful, but South other hand, the distance, both geographically America's largest market, Brazil, has been and culturally, was considerably larger than first considerably more challenging. After two anticipated. decades they are still losing money there. Their challenges include regulatory problems, strong competition from the French supermarket chain Carrefour and being unable to convince
Transcribed Image Text:The biggest retailer in the shoppers about Walmart's 'everyday low prices model. In 2016, they restructured the Brazil world has found that operations and closed 60 outlets, accounting for internationalisation is 5 per cent of its sales. European expansion results have similarly been mixed. The considerably more acquisition of the ASDA Group in the UK was relative successful while Walmart experienced challenging than expansion at eight years of struggle in Germany that ended in home. a market exit. First, they did not have enough scale economies compared to local competitors, Walmart began its international operations 1991 like Aldi, with strong relationships with German and today the UK, Brazil and China are their suppliers and already catering to price- largest markets outside the USA. Walmart conscious consumers. Second, cultural International is the company's fastest growing mistakes were made as customers did not unit with sales of $141bn (£85bn, €106bn) in approve of American service practices. A third 2015, accounting for about 30 per cent of challenge was Germany's then strict regulations Walmart's overall sales. It included close to on location and opening hours. German workers 800,000 employees in over 6,200 stores and 11 also resisted Walmart workplace customs, e-commerce websites in 28 countries. resulting in labour union conflicts. Walmart's first Internationalisation results have, however, been Asian expansion into South Korea was similar to mixed as Walmart has struggled to understand the German story with strong local competition local buying patterns, culture, competitors and and failures to meet local customer needs. It regulations, not the least in emerging markets. ended in exit after eight years. China has been Walmart first entered the Americas and has more of a mixed picture. On the one hand, sales since expanded into ever more distant have steadily increased - over 400 stores have geographic markets. The early entry into been established and they make a profit. On the Canada and Mexico was successful, but South other hand, the distance, both geographically America's largest market, Brazil, has been and culturally, was considerably larger than first considerably more challenging. After two anticipated. decades they are still losing money there. Their challenges include regulatory problems, strong competition from the French supermarket chain Carrefour and being unable to convince
An early discovery was that Chinese consumers He emphasised four initiatives: 'First, create a prefer frequent shopping trips in contrast to platform for sustainable growth in China. .. Walmart's home-based experience where Second, turn around our operation in Brazil.. customers drive to out-of-town stores and fill .Third, we have to rejuvenate Mexico.. .And, their cars with large multi-packs. While they fourth we have to drive e-commerce.' encountered a completely different international market, they also faced large regional variations Sources: Dudely, R., Wal-Mart's everyday low prices fail to in this vast and multi-ethnic country. They have stir Brazilians', Bloomberg Business, 23 April 2014; S. Banjo, also struggled with local regulations and food "Wal-Mart's strategy to jump start growth in China', Wall Street Journal, 5 August 2014; A. Felsted, 'China set to safety issues and tough competition from remain at head of line for grocery sales', Financial Times, 23 Carrefour. In a 2014 interview with the Wall August 2015; Thomson Reuters Street Events. Wal Mart Street Journal, Walmart International President Stores Inc. 22nd Annual Meeting for the Investment and CEO David Cheesewright, former CEO of Community, edited transcript, 14 October 2015; L. Whipp, Walmart to close 269 stores as it revamps online presence', Walmart's UK supermarket chain Asda, admits Financial Times, 15 January 201 to the struggles, but explained they would still be the Walmart growth engine. 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:An early discovery was that Chinese consumers He emphasised four initiatives: 'First, create a prefer frequent shopping trips in contrast to platform for sustainable growth in China. .. Walmart's home-based experience where Second, turn around our operation in Brazil.. customers drive to out-of-town stores and fill .Third, we have to rejuvenate Mexico.. .And, their cars with large multi-packs. While they fourth we have to drive e-commerce.' encountered a completely different international market, they also faced large regional variations Sources: Dudely, R., Wal-Mart's everyday low prices fail to in this vast and multi-ethnic country. They have stir Brazilians', Bloomberg Business, 23 April 2014; S. Banjo, also struggled with local regulations and food "Wal-Mart's strategy to jump start growth in China', Wall Street Journal, 5 August 2014; A. Felsted, 'China set to safety issues and tough competition from remain at head of line for grocery sales', Financial Times, 23 Carrefour. In a 2014 interview with the Wall August 2015; Thomson Reuters Street Events. Wal Mart Street Journal, Walmart International President Stores Inc. 22nd Annual Meeting for the Investment and CEO David Cheesewright, former CEO of Community, edited transcript, 14 October 2015; L. Whipp, Walmart to close 269 stores as it revamps online presence', Walmart's UK supermarket chain Asda, admits Financial Times, 15 January 201 to the struggles, but explained they would still be the Walmart growth engine. 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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