WalMarts International Expansion

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Wal-Marts International Expansion

• CLAIRE REID
• RACHEL DEERY
• CARMEL McGAHEN
• DONNA DEVLIN
• LISA WALLACE

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INTRODUCTION

• HIGH VALUE, LOW PRICE AND A WARM WELCOME.
• SAM WALTON

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THREE BASIC BELIEFS

• 1. RESPECT FOR THE INDIVIDUAL.
• 2. SERVICE TO OUR CUSTOMER.
• 3. STRIVE FOR EXCELLENCE

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WAL-MARTS PHILOSOPHIES

• SUNDOWN RULE
• 10 FOOT ATTITUDE

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SAMS RULES FOR BUILDING A BUSINESS.

• 1. COMMIT TO YOUR BUSINESS,
• 2. TREAT ASSOCIATES AS PARTNERS,
• 3. MOTIVATE YOUR PARTNERS,
• 4. COMMUNICATE EVERYTHING,
• 5. APPRECIATE EVERYTHING,
• 6. CELEBRATE SUCCESS,
• 7. LISTEN TO EVERYONE,
• 8. EXCEED CUSTOMERS EXPECTATION,
• 9. CONTROL YOUR EXPENSES,
• 10. SWIM UPSTREAM

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WHAT COUNTRIES?

• 1991-MEXICO
• 1991-PUERTO RICO
• 1994 - CANADA
• 1995-BRAZIL
• 1995-ARGENTINA
• 1996- CHINA
• 1998-GERMANY
• 1998-KOREA
• 1999-UK

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WHY DID WAL-MART EXPAND TO THESE COUNTRIES?

• WHY WAL-MART WENT INTERNATIONAL
• EUROPE- SIZE, ECONOMY,CURRENCY.
• CULTURALLY/GEOGRAPHICALLY PROXIMATE

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HOW?

• 4 DIFFERENT FORMATS.
• ENTRY MODES.
• STRATEGIES

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PROBLEMS

• PUBLIC POLICY
• CULTURE
• MANAGEMENT
• COMPETITION

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PUBLIC POLICY

• EUROPE PLANNING PERMISSION
• UK- RIP-OFF BRITAIN CAMPAIGNES.
• GERMANY OPENING HOURS, SPECIAL OFFERS AND
  PROMOTIONS

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CULTURE

• USAS CULTURE
• ARGENTINAS CULTURE
• GERMANYS CULTURE
• UKS CULTURE

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MANAGEMENT

• GERMANY REPLACED MANAGEMENT WITH US EXECUTIVES.
• UK KEY MANAGEMENT LEFT THE ASDA TEAM.

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COMPETITION

• GERMANY PRICES
• UK EDLP POLICY MET BY UK COMPETITORS
• LATIN MARKETS MORE EXPERIENCED COMPETITION.

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HOW SUCCESSFUL IS WAL-MART

• IN A CHALLENGING RETAIL ENVIRONMENT WITH SLOWING
  COMPARABLE SALES GROWTH, WAL-MART HAVE ACHIEVED
  ANOTHER YEAR OF RECORD SALES. NET INCOME EXCEEDED
  8 BILLION FOR THE YEAR FOR THE FIRST TIME AND
  SALES GREW BY ALMOST 27 BILLION (LEE SCOTT)

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AMERICAN HOME MARKET

• SALES GROWTH FLATTENED IN AMERICA DUE TO ECONOMIC
  SITUATION, THEY HAD NO CHOICE BUT TO EXPAND
  INTERNATIONAL.
• SOMEDAY THE US WILL SLOW DOWN, AND INTERNATIOANL
  WILL BE THE GROWTH VEHICLE FOR THE COMPANY (JOHN
  MENZER)

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HOME MARKET!

• HAVENT EXPLOITED THE POTENTIAL NORTH AMERICAN
  FOOD MARKET
• VOTED MOST ADMIRED COMPANY IN AMERICA

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INTERNATIONAL SUCCESS!

• ABILITY TO TRANSPORT COMPANYS UNIQUE CULTURE AND
  EFFECTIVE RETAILING CONCEPT TO EACH COUNTRY.

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EUROPEAN MARKET!

• SUCCESS IN GERMANY AND THE UK IS HIGHLY
  QUESTIONABLE. ITS DEBATABLE WHETHER WAL-MART HAS
  BEEN AS SUCCESSFUL AS THEY ORGINALLY PLANNED,
  THERE IS MORE TROUBLE IN THESE 2 MARKETS THAN IN
  CANADA

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WHAT NEXT?

• COUNTRIES WAL-MART IS CONSIDERING EXPANDING
  INTO
• FRANCE
• POLAND
• TURKEY
• SPAIN
• ITALY
• HUNGARY

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WHY FRANCE!

• IT HAS THE HIGHEST LEVEL OF SALES THROUGH FOOD
  RETAILERS.
• THE GEOGRAPHICAL POSITION.

• ALLOW WAL-MART TO MAKE STRONG EUROPEAN NETWORKS.
• ITS HOME TO THE HYPERMARKETS.

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PROBLEMS WITH FRANCE

• STRICT PLANNING LEGISLATION.
• STOP OUT OF TOWN STORES
• ACQUISITION OR JOINT VENTURE ONLY ENTRY MODE.
• 2 BEST TARGETS ALREADY MERGED IN 99.

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ENTRY MODE?

• ONLY POSSIBLE MODE IS JOINT VENTURE OR
  PARTNERSHIP.
• WALMART WOULD CONTRIBUTE LOGISTIC AND COST
  REDUCTION, EXPERTISE AND INVESTMENT.

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ENTRY MODE?

• THE LOCAL PARTNER WOULD SUPPLY THE KNOWLEDGE OF
  THE COMPLEX FRENCH MARKET.

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PROBLEM FOR WALMART!

• WAL-MART HAS ONLY EVER TAKEN THE JOINT VENTURE
  ROUTE IN THE ABORTED INDONESIAN ADVENTURE AND
  WHERE IT HAD NO CHOICE IN THE CHINA MARKET.
• IT LIKES TO BE THE ONLY FORCE AND NOT HAVE TO
  RELY ON OTHER COMPANIES.

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CONCLUSION!

• EXPERIENCE SUCCESS DUE TO UNIQUE CULTURE AND
  RETAILING CONCEPTS
• IF IT WANTS TO MAINTAIN ITS GROWTH RATE MORE
  INTERNATIONAL PRESENCE IS REQUIRED

• EUROPE AND AMERICA ARE VERY DIFFERENT
• STRICT REGUALTIONS INHIBIT GROWTH TRANSFER OF US
  STORE FORMAT IS MET WITH RESISTANCE

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CONCLUSION!

• WAL-MART MADE A HUGE IMPACT IN UK AND GERMANY,
  THO WHETHER IT WAS AS SUCCESSFUL AS EXPECTED IS
  QUESTIONABLE.
• OPTIONS APPEAR LIMITED, THEY HAVE THE CHOICE OF
  WITHDRAWING FROM EUROPEAN MARKET. THAT OPTION
  LOOKS UNLIKELY AS WAL-MART WILL NOT ADMIT DEFEAT.