Walmart’s Globalization Strategy Analysis Sample

Paper Instructions

Academic level – Undergrad. 1-2

Type of paper – Analysis

Topic Title – Walmart’s Globalization Strategy

Instructions:

Analysis report (plus any relevant charts or graphs) on Walmart’s globalization strategy over the last few decades. Where did the retailer struggle? Where did it do well? Can location characteristics explain the differences in Walmart performance? Are there general insights that can be derived?

Discuss Walmart’s Globalization Strategy
• Where did the retailer struggle?
• Where did it do well?
• Can location characteristics explain the differences in Walmart performance?
• Are there general insights that can be derived?

Analysis Sample

Walmart Company has been expanding its operations globally for the past few decades with partial triumph. However, the enterprise has faced challenges in various markets while succeeding in others. The current analysis aims to observe Walmart’s struggles and success in different needs, the role of location characteristics in the firm’s performance, and general insights.

Walmart’s Struggles

Walmart’s entry into the German and Chinese markets was one of the critical problems in its globalization approach. The company’s low-price strategy failed in Germany because their people consider more quality than pricing. The firm’s acquisition of neighborhood stores in Germany also left the company without oversight of its operations, which made its problems worse. Walmart experienced yearly financial losses in German markets, failing to transform the retail sector in labor relations, market rivalry, and supply chain management (Tsui-Auch & Chow, 2019). Walmart has been successful in China, although it has encountered several difficulties, such as cultural differences and regulatory problems. Walmart’s market development was constrained by Chinese government limits on the number of stores that international merchants could operate. Thus, Walmart’s experiences in China and Germany show that comprehending local customs and consumer preferences before entering a new market is crucial.

Walmart’s Success
Despite facing challenges in China and Germany areas, Walmart has succeeded in other markets such as Canada and Mexico. Mexico is the brightest example of the business’s successful globalization strategy where it became the largest retailer. According to Tsui-Auch & Chow (2019), Walmart imported its highly centralized operational management, regional distribution networks, and successful US business pricing strategies into its Mexican subsidiary. Walmart’s success in Mexico may be credited to its plan to buy well-known regional brands like Superama and Suburbia, which assisted the company in gaining a footing in the industry. The company has also succeeded in Canada, becoming one of the most prominent merchants there. Hence, Walmart’s experiences in Mexico and Canada reveal the value of purchasing well-known local brands and business models.

Location Characteristics
Market location characteristics significantly affect Walmart’s performance in different countries, such as China, UK, and Germany. Walmart’s location strategy prioritizes the efficient movement of materials, human resources, and business information with urban centers, strategic warehousing, and customer behavior-based layout design (Mazouni, 2018). However, the company’s operations in China have been limited by regulatory issues, while cultural differences hindered its entrance into the German market. State-owned multinational enterprises (SOMNEs) from solid nations like China, Russia, Singapore, and Malaysia, are often suspected of having expansion goals superimposed by home governments (Tsui-Auch & Chow, 2019). Due to severe competition and a challenging retail climate, Walmart’s entrance into the UK market proved unsuccessful, and the company quit. Therefore, Walmart’s globalization path emphasizes understanding local rules, culture, and competition while growing operations abroad.

General Insights
Walmart’s global expansion strategy sheds light on the challenges and opportunities of running a business on the international stage. The company’s experience in Germany, for instance, showed the importance of comprehending local consumer preferences and needs when entering new markets. Michael Duke, Walmart’s then-international CEO, began to give local managers more autonomy while defining tighter financial objectives for each location, in response to the corporation’s pullout from Germany (Tsui-Auch & Chow, 2019). Similarly, Walmart’s experiences in China and the UK demonstrate the necessity of overcoming regulatory and market competition obstacles when extending operations globally. Legal considerations should include the adaptability and flexibility of the law regulations that apply to national and global organizations (Mazouni, 2018). Consequently, Walmart’s difficulties in China, the UK, and Germany stress the significance of adjusting to local demands and rules when entering new markets.

The analysis reveals that Walmart’s globalization strategy has had both success and challenges in China, Germany, Mexico, and other countries. The company demonstrated the importance of considering local norms, culture, governments, and customers’ needs. Other businesses can benefit from Walmart’s experience and develop strategies to enter new markets, considering regional differences.

References

Mazouni, M. (2018). The effect of global investment decisions and financial risk on multinational corporations: Walmart Corporation case study. Available at SSRN 3257136. https://dx.doi.org/10.2139/ssrn.3257136

Tsui-Auch, L. S., & Chow, D. (2019). MNEs’ agency within institutional contexts: a study of Walmart’s post-acquisition practices in Mexico, Germany, and Japan.Journal of International Management, 25(2), 100655. https://doi.org/10.1016/j.intman.2018.11.001