EXECUTIVE SUMMARY: WAL-MART’S GLOBAL EXPANSION
This report explores Wal-Mart’s global expansion plan in an environment where businesses have to adapt to the fast pace of change and cope with the challenges that are implicit in the emergence of an increasingly complex global economy.
Principally, Wal-Mart grew to where it is today through the vision of its founder, Sam Walton. Over the years, it serves the needs of the community where it exists well. However, when it brings it business abroad, this report has identified three (3) key issues. It was obvious that the Supply Chain Management system which was successfully implemented back home is not so business friendly when it goes abroad. Furthermore, doing business in a foreign land means more than just providing goods which it thought was best for them. Cultural understanding plays an important role in the case of Wal-Mart as it faces many uphill tasks in dealing with sub-cultures that belongs to the communities. As we have found out from the analysis, pricing and discounting strategy is a key area that hobble Wal-Mart’s global expansion plan. What works in the home country generally may not necessary work in the host country.
Wal-Mart boosts its reputation with a well established supply chain management and a pool of highly trained employees which they called ‘associates’. Perhaps one of its more obvious strengths is the strong branding that it has in association with high quality, low price products. Having said, its global expansion is still limited due to economic and political instability in countries where it serves as well as stiff competition it faces with local rivals.
Initially, Wal-Mart depends very much on its ethnocentrism approach. However, its experiences in German, Korea, China, and Japan (just to name a few) make Wal-Mart realize that its global strategy of providing standardize goods does not goes down well with the consumer market.
In our PESTLE analysis, we discovered that the retail...