Walmart's International Expansion and Strategic Choices in Turkey

This report discusses Walmart's international expansion and strategic choices in Turkey, including reasons behind the choice of location for the subsidiary. It also provides insights into Walmart's historical performance, product range, and competitive position.

ASSESSMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAINBODY...................................................................................................................................4
1. Walmart’s international expansion..........................................................................................4
2. Strategic choices......................................................................................................................5
3. Reasons behind choices of location for subsidiary..................................................................7
4. Strategic method for entry and possible consequences...........................................................9
5. Organisational and managerial problems..............................................................................11
6. Strategic advice for the subsidiary to overcome the problems..............................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
A multinational company can be defined as the business which operates in different
countries at the same time. in simple word, an organization which has large number of business
activities in more than on country. The major benefit of the MNC’s companies are to gain
economic benefits in the business because they don’t have to pay high tax because many
countries reduces tax for enhancing their international trade. In addition, organization gets
change to generate profit margin on product which are provided in different countries to the
customer. Multination national corporation applies wide number of strategies to get success in
each country and in return influence GDP rate of business. To expand its business in global
market, offer innovative type products along with wide line by organization to customer.
There is an example of Walmart company which is multination corporation and operates
in various countries and offers wide variety products to customer through it’s subsidiary.
Organization is highly succeeded company in the global market through it’s subsidiaries.
Organization hasplan to expand it’s subsidiary in an international location. So, company chooses
Turkey to expand it’s business. The brief study of the report provides understanding about parent
company’s international expansion in term of historical performance, product and service range
and competitive position.
MAINBODY
1. Walmart’s international expansion
Walmart is an American multinational retail corporation which is mainly headquartered
in Bentonville, U.S. the organization is established by Sam Walton in 1962. It is operated a chain
of hypermarkets, discount department stores and grocery stores. It has 11,503 stores which is
operated in 27 countries and operates under 56 different names. Organization is considered as the
world’s largest company based on the revenue. It is the largest private limited type company in
the global world which occupies 2.2 million employees who offers their services in different
countries by its subsidiaries. The vision statement of Walmart is to become destination for the
customer to save money without concerning how much they purchase. This vision helps
company to develop position itself in the market as the retail leader. In other word organization

wants to become best retailer in the customer mind, consumers heart and employee. While the
mission statement of the company is to “save people’s money so that they can live high standard
life” (EDWARD FERGUSON. Walmart’s Mission Statement & Vision Statement, Generic &
Intensive Strategies.2019). The statement is interpreting that organization wants to implement
critical strategies which leads remarkable difference such as improves customers lifestyle by
consuming high quality products and in returns achieves high profit margin on the products.
Organization has developed its core values such as customer first, honesty, promote fairness in
pay structure of employees, gives high performance in the global market by offering innovative
products to customers. The mission, vision and core values of the company helps to expands it’s
business in different countries and improves demand of products by deep researching about
customer’s needs, expectation and preferences. Organization wide product line which helps to
attract large number of customers within company. By the product line can interpret that has
reason to become market leader. Due to wide product portfolio easy to attract each customer
within company and retains them prolog time. Organization believes in continue development so
always prepare to take change as per environment requirement.
Evaluation of historical performance
Initially organization offers product and services to customer at low price for gaining
higher volume sale at low profit margin. It is primary strategy which is implement by
organization gain trust of customer on brand. To gain high profit margin seeks low cost supplier
by company that leads competitive advantage within company thorough competitors. It also
improves selling infrastructure and in return gets high revenue in the market. Thus, organization
famous as first discounted city stores (Muñoz, Kennyand Stecher, eds., 2018). The organization
opens large number of stores in in US as first distribution center which puts pressure on
competitors and attracts customers to buy products on lower cost along with good quality. Then
over the period expands it’s business over the US and Mexico due to large volume sells that
empowers business by employees. Later on Walmart organizes into four divisions such as
Walmart US, Walmart international, Sam’s Club and Global E-commerce. Then these divisions
are subdivided into many subsidiaries i.e. supercenter, hypermarket, warehouse clubs, cash and
carry stores, drug stores, convenience stores and digital retails. Thus, organization expands it’s
business worldwide. Organization keeps change management, performance management and

strategic management strategy which help business to expand it’s business effectively so that in
return gets hundred percent profitability. Another reason of international expansion is this
Walmart has wide product line and services such as i.e. electronics, music’s and movies, home
and furniture’s, clothing, footwear, jewelry, toys, health and beauty products, per suppliers, party
suppliers, grocery, photo finishing and craft. It is large line of product which helps company to
meet each customer objective on time. Apart from this company continuous expand it’s product
line which helps company to keep excited their customer and puts pressures on competitors.
Walmart has high market share in the global market such as Walmart U.S. has captured largest
market share estimated 66% which is quite more as compared other retailers. Walmart
international has captured estimates 23% of product sales (Share of Walmart's net sales
worldwide in 2020, by division. 2019). Walmart focuses on low cost strategy along with high
quality which helps company to take competitive advantage. These are main reasons which
causes organization easy to expand it’s international expansion.
2. Strategic choices
There are a lot of choices which Wal-Mart has to expand them in Turkey which can make
the company get a lot of advantage for a long run. This can help the company to get a
competitive advantage as well as a better market share which will increase the profit margins.
 Joint Venture
The company can find parties with whom they can invest in Turkey if they find it too risky
for the company to expand in that country. The company is well established which is why the
organization will not have to have a joint venture because they will have invest to make for it.
Wal-Mart’s parent company is ASDA which is a well-established organization in the world
which is making the company have a great competitive advantage which is a very good factor for
the company(Luoma, Risikko and Erkkilä, 2016). This is a very good strategy for those
companies which are new to international markets but Wal-Mart will be able to have a better
functioning in the international market because they have experience and understand the
customer’s needs and demands very easily.
 Strong market strategy

There are a lot of countries which Wal-Mart has expanded themselves in be it developed
countries or developing countries which is making the company have a strong portfolio for
themselves which is good for a long run in the market. Wal-Mart has a strong strategy for
themselves which can make the company have a better customer base as soon as they expand
because they understand the needs and demands of the market very easily. The company will
have to use promotions for making the customers aware of the new products they are bring in the
market of Turkey which is going to be very good for the customers.
 Market research
It is very important for any company to research the market before they expand themselves
and understand the culture and customers of the other countries in which the company is
expanding in(Vidal, G.G and et.al., 2017). Wal-Mart is an experienced organization which is
aware of the changes which is taking place in the trends of the customers which is being
followed in the organization which is why they are having a strong customer base for a long run.
The company has expanded themselves in a lot of countries which is why it is very important for
the company to have a better functioning for themselves so that they can have a better profit
margin. It is not possible that the same strategy will work in all the countries which is why
research of the market is important and especially in a place like Turkey so that the company can
achieve their objectives on time.
 Product Development
The products have to be developed according to the customers of the country in which Wal-
Mart is expanding themselves in which is going to be very helpful and a strong point for the
company. The products have information on the package which has to be translated to the
language of Turkey so that the company can satisfy the customers more which is going to be
very good for the company(Flamand, 2016). The research and development department will have
to change the product according to the pricing of the product so that the best can be given to the
customers at a low price and the company will still be able to get a competitive advantage.
 Innovation

There are different kinds of innovations which can be done in the products according to the
customers of the other country like Turkey. It is very important that the products of the company
are unique and innovative to make a place for themselves in the existing market in other country.
The pricing of the products will have to be accordingly so that they can make profit and also
match the satisfaction level of the customers from time to time. The demands and needs of the
customers have to be met by Wal-Mart from time to time so that they can have a stronger market
share in the country. There are changes which are required in the market by the customers
always which is a good sign for Wal-Mart to expand in other countries to get a better customer
share.
3. Reasons behind choices of location for subsidiary
Wal-Mart Company is expanding its business operations in Turkey in order to expand its
market share in international market. Following possible reasons worked behind expanding
business operations in Turkey.
Government support: Turkey government give huge emphasis on the growth and development
of corporate3 sector in country as it play huge role in economic development of country.
Government provide huge support to corporate houses in order to establish its business ventures
in Turkey. Government follow the policy of easy and convenient licensing process in Turkey
(Bai, 2016). Support of government play huge role in making expanding decision for companies
as all business environment of country are immensely depends upon the policy frame by
government to promote corporate culture in country.
Economic Growth: Turkey is consisted as among the emerging economy as per the reports
published by International Monetary Fund. Gross domestic product of Turkey has entitled the
country to be at the 19th rank globally (Končar and Leković, 2016). As per the recent statistics
Turnkey has an effective GDP growth rate as the country GDP is growing at the rate of almost
3% which is consisted as an effective growth rate. All such aspects indicate that in order to
expand the business ventures Turkey is an effective location for the Wal-Mart Company. GDP
indicates about the effectiveness of the corporate sector in order to grow in the market. Economic
growth of the country play huge ro,e for companies in taking business expansion decisions.

Purchasing capacity of consumers: Purchasing capacity of potential consumers also play huge
role in making business expansion decisions of companies. In Turkey due to effective GDP
growth rate country has an effective per capita rate in the world. Countries ranking in respect to
per capita income are consisted as the 71th in global context (Lauer, 2019). Per capita income is
denoted the earning capacity of people in Turkey. As the potential customers of Wal-Mart in
Turley carry an effective per capita income company management is targeting the retail market
of Turkey to expand the business operations. Purchasing capacity of potential consumers play
huge role in growth process of company as the Wal-Mart Company consists up with an effective
brand image. Effective brand image of company will entitles company management to attract
potential consumers in the retail market of Turkey easily.
Effective tax compliances: Government in Turley provide effective benefits such as effective
taxation compliances in order to improve the corporate culture in country. Taxation is among the
key issue companies face as it directly restricts the profitability of company. Turkey government
charge affordable taxation rate that give scope to companies to growth in the market. All
businesses take time to establish in new business locations. Effective taxation compliances
allows companies to make expansion decision in such locations easily. This is among the
primary reason behind making business expansion decision in Turkey.
Customers: Management of Wal-Mart considered many factors before making expansion
decision in Turkey. Potential customers are among the key factors before making business
expansion decision in Turkey. Turkey consisted up the effective population base of around more
than 84 million peoples. Such a huge population base of Turkey give immense opportunity to
Wall Mart Company to expand the sales turnover of company potentially which will also
improve the profitability of company. Customers play key role in the success of business as it
directly influence the success of business expansion decision. Due to such an effective potential
customer base management of Wall Mart Company decided to expand the business operations in
Turkey.
Retail sector growth of Turkey: Retail industry of Turkey is among the key sector which also
consisted with effective customer base. Retail industr4y of Turkey is growing at the rate of more
than 9 % which is an effective growth percentage. Company management ahs aimed to take the

competitive advantage by launching the outlets in Turley retail market as the country consisted
with such an attractive retail sector growth rate.
Market competition in Turkey: Company management also considered retail sector
competition in Turkey before making expansion decision. Competition in the market play huge
role in the growth potential of company in target market. Retail sector consist up with an
effective growth rate which has also resulted into effective market competition for the Wall Mart
Company in the retail market of Turkey (Murugan and Francifca, 2019). Wall Mart Company is
among the leading brand in retail sector which also consisted up with effective brand image of
company. Due to such an attractive brand value company will be able to sustain in the retail
market of Turkey and has the potential to make an effective revenue opportunities for the growth
and development of the business.
All the above factors are amongst the key factors behind making the expansion decision
in Turkey. Company management has critically analysed all the factors before making business
expansion decision in Turkey.
4. Strategic method for entry and possible consequences
Business expansion is a crucial decision companies take to improve the growth potential
in target market. Following strategic methods are available for the management of Wall Mart
Company in order to expand the business operations in Turkey.
Franchising: Management of Wall Mart Company has an option to franchise its business in
Turkey. Franchising is an old method of business expansion which involves allocation of retail
outlets to some local entities operating in the Turkey. This is an effective strategic option
available for the Wall Mart Company in order to expand the business operations in Turkey.
Franchising also reduces the risk factor involve in business expansion process.
Consequences involve in franchising:
 It decreases the profitability of company.
 It involves lesser control of the company.
 This can also damage the brand value of Wall Mart Company in newe location.
 This is not a creative method to expand the business operations.

Partnering: Partnering is also a strategic method available for the Wall Mart Company in order
to expand the business operations in Turkey. This method involves framing strategic partnership
with other company engaged in retail sector. This method involves segregation of total
investment and profitability into set proportions of partnership. This is an effective method
which reduces the risk involve in expansion decision.
Consequences of partnering method:
 This is a risky approach for big companies like Wall Mart.
 This technique can damage the brand image of company in new market.
 This method also causes to several issues in latter growth stage of business life cycle.
Joint Ventures: Joint venture is also a crucial method implemented in case of business
expansion process in Turkey. This method involve setting up the partnership with another entity
involve in retail sector and frame strategic partnership (Tráng and Dũng, 2019). This method also
involve setting up interdependency at third party involve in partnership to control all business
operations in Turkey. Risk and profits under this method normally share in equal proportion but
it can be changed as peer the strategic partnership between companies.
Consequences involve in Joint Venture:
 This method create imbalance in business.
 This causes too many issues at the letter stage of the business operations.
 Exit of business faces planet of issues in this method.
Buying a company: Buying a retail company is also a method available for the Wall Mart
Company in order to expand the business operations. Under this method company can buy the
share of any company operate business operations in retail sector. This is an effective tool used
to expand the business operations in new locations.
Consequences of the method:
 Investment is huge in this method.
 Issues in forming strategies.
 Work culture also faces problems in this method.

5. Organisational and managerial problems
The company and its management can face different problems, challenges and conflicts
etc. while enter the new market in international business environment. According to many
business experts, a business or company always faces many challenges and problems when it
starts its business operations within new market (Ghorbani and Babaei, 2016). This is very
common thing which has faced by most of multinational companies. In this situation, Walmart
will also face many organisational and managerial problems when it enters the retail market of
turkey. Some major organisational and managerial problems have been discussed below;
Problem relating to resources: This is one of very common problems which faces by each
organisation while entering the new market segment. That’s why Walmart and its management
also will face this problem. When any multinational company starts their business operations, the
it can’t easily arrange different resources in initial stage, like; human resource, natural resources,
technological resources, etc. Basically, these all are some major resources which each business
has highly required to run their all operations effectively. In this situation, this is a very big
problem to the Walmart, because it has highly required many resources in its daily operations for
running each operation in proper manner. The management of company is able to solve this
problem by hiring various local turkey people within company before starting their business
operation in this market (Van Vliet and Dubbink, 2019). It is really too necessary task to
Walmart, because without completing this task company will face huge problem in arrangement
of different resources.
Lack of knowledge in new market: When any company enter the new market segment, in
which it not has full knowledge of that new market. In this situation, if any company not has
proper knowledge of market, then it can’t positive results from that market. That’s why lack of
knowledge is big problem of the Walmart. Currently company not ha proper knowledge of
turkey’s retail industry. In this case, if company start their business operations in this market,
then it can’t get effective results in this market segment. Top-level management is able to solve
this problem by getting full knowledge of this market before entering. The marketing team of
company is needs to be more active in it job role, because this team is mainly responsible to
complete research of new market segment for its company. When Walmart enter the turkey

market after gaining whole information about existing market segment, then it can easily achieve
their decided objectives on time in this new market segment.
Existing market competition: Existing market competition is another big problem which
Walmart and existing management can face while enter the new market segment. According
many business experts, a business or company always faces big problem relating existing market
competition (Mooya, 2016). Existing businesses and companies of a market always gives very
tough competition to that company which recently started their business operations in that
market. That’s why it is very big problem to Walmart, in which it can easily solve this problem
by using some effective business strategies in this market. It need to run some productive
marketing campaign when it will start its business operations in turkey. At the end, company will
able to gain huge competitive advantage in this market by solving this problem.
Strict government policies: Many times strict government policies of new market segment also
become big problem to a company or business. For example; government of turkey has imposed
high taxation on MNCs (multinational corporations). In this situation, Walmart has highly need
to follow these different government policies when it runs their business operations in this
market. That’s why it is also a big problem to company. Currently company is able to solve this
problem by merging its own business with local company of the country. Top-level management
of company should consider this solution factors in their business operations while enter the new
market segment. On the other side, many times local government has imposed additional charges
and duties on different businesses, in which it is also a problem to company (Piskunova,
Voronchikhina and Akbar, 2018). Existing management of Walmart need to create some strong
and effective strategies to systematically dealing with such problem in new market segment.
6. Strategic advice for the subsidiary to overcome the problems
Wal-Mart needs to adopt different strategies to increase the efficiency to achieve their
objectives and also increase their potential to compete in new market effectively. Company need
to adopt diversification and market development strategy to increase the sales and opportunity to
establish retail store in new market effectively. This is very essential for company to determine
all the factors with the help of analytical tools for business environment. This also helps business
to identify all the internal and external factors which will support retail company to attract more
customers and attain better market share. This will also increase information of Wal-Mart to

implement innovation practice and gain better product segment which helps to increase customer
satisfaction and make them loyal to the company effectively. Wal-Mart also needs to analyse
market competitive which is very high in turkey market, so company needs to increase the
potential of human resources to improve engagement level of customers and generate higher
profit margins and compete in existing market. Market analysis helps to determine current trends
of market to increase performance of business and adopt effective strategy to increase potential
to gain better margins effectively (Vlacic, González-Loureiro and Eduardsen, 2019). With the
use of innovation and motivation theories Wal-Mart will increase the internal performance to
achieve its opportunities and increase its size to compete and attain core competency effectively.
There are different types of market players and by mergers and acquisitions this will reduce the
risk of competition from the market and help them to increase profit margins effectively. Wal-
Mart also needs to determine the cost of operations and implement high quality technology and
digital tools which increases the efficiency to understand all the market competitive strategy and
make them more supportive. Wal-Mart also needs to understand all customer behaviour patterns
so that it can reduce the gap of services and quality of products to increase the satisfaction level
of customers effectively (Janjić and Rađenović, 2019).
There is another segment which needs to be diversified and enhanced for reaching high
class industry benchmarks; it has to increase knowledge of market share in diversified new
segments which will enhance Wal-mart goodwill. There should be focus in employees training
standards in bringing innovative product ranges which are delivered on various parameters,
varied evolving customer segments and high competitive brands. Wal-mart is one of the biggest
global brand offering high quality products, services to customers all over the world, but the
changing hemispheres of digital business world have brought various changes and impacts on
company production standards. There needs to be high focus built towards expansion of
knowledge horizons within all levels of departments in company at Wal-mart which will bring
new segments of products under portfolio. Wal-mart employees and leaders must build their
synergy of growth with funnel of creativity and innovation, which will enable research
breakthrough results to be implemented effectively. It is highly important to gain insights and
knowledge on various new segments of products; services which will enable reach high end
global benchmarks and competitively reach new parameters of work (Dowling, Noll and Zisler,
2019). The world dynamic scenario gives huge platforms to diversify their global integration

with various companies, brands where Wal-mart can reach the determined world class global
goodwill standards.
On the other side, the company can face problem which has based on exiting market
competition. The marketing team of Walmart should be more active and energetic in its job role
to effectively solve this problem. When company will start their business in new market, then it
need to run some effective and productive market campaigns in initial stage. Reason is, if
company will run such marketing campaigns in initial stage, then it can easily attract lots of
people towards brand. It is too necessary tasks to this company, in which monument should
complete these tasks. Otherwise, this company can’t achieve their decided goals in this new
market. The company will need to offer some exclusive range of products and services to
customers in this market, because exclusive products always help in attracting lots of customers
towards brand (Yoboue, Yi and Antwi, 2017). It is able to use product differentiate strategy in
their business environment to produce some exclusive range of products. This is one of best
advices to company for solving this problem in new market segment. Currently most businesses
or companies are gaining huge competitive advantage by employing digital marketing in their
marketing activities. In this situation, Walmart is also able to gain huge competitive advantage
through digital marketing. These all are some major advices which top-level management at
Walmart need to considers while enter the new market segment. The company can gain positive
results in new market by following these advices in its daily operations.
CONCLUSION
The brief study of the report given understanding about Wal-Mart which has explained
reason behind the international expansion in term of organization performance, product and
service range, market share of the company, competitive position of the business in the retail
market. The report has been concluded strategic choices such as competitive pricing strategy,
product diversification strategy, digital marketing, change management etc. which available for
the parent company in the new international location. It has been summarized reason for choice
of location for the subsidiary. There were several strategic methods like wide product line,
corporate relationship management, low-cost product strategy etc. source of entry and possible

consequences in the new international location. The potential organization and managerial issues
for the subsidiary operating in the new international environment can be concluded in report.

REFERENCES
Books and Journals
Bai, H., 2016. An examination of foreign luxury fashion and accessories retailers'
internationalisation strategies and post-entry expansion strategies in mainland
China (Doctoral dissertation, Glasgow Caledonian University).
Dowling, M., Noll, E. and Zisler, K., 2019. Innovation in the digital age. In The Routledge
Companion to Innovation Management (pp. 278-296). Routledge.
Flamand, M., 2016. Studying strategic choices of carmakers in the development of energy
storage solutions: a patent analysis. International Journal of Automotive Technology
and Management. 16(2). pp.169-192.
Ghorbani, N. and Babaei, E., 2016. Exchange market algorithm for economic load
dispatch. International Journal of Electrical Power & Energy Systems. 75. pp.19-27.
Janjić, I. and Rađenović, T., 2019. The importance of managing innovation in modern
enterprises. Ekonomika. 65(3). pp.45-54.
Končar, J. and Leković, S., 2016. The role of retail strategy in the development and efficiency of
business on the global electronic market. Strategic Management. 21(4).pp.22-28.
Lauer, T., 2019. Generic Strategies, Outpacing and Blue Ocean-Discussing the Validity of Three
Strategic Management Theories Using Case Studies from Airlines and Grocery
Retail. Theory Methodology Practice (TMP). 15(01). pp.57-66.
Luoma, M., Risikko, T. and Erkkilä, P., 2016. Strategic choices of Finnish universities in the
light of general strategy frameworks. European Journal of Higher Education. 6(4).
pp.343-355.
Mooya, M. M., 2016. Standard Theory of Real Estate Market Value: Concepts and Problems.
In Real Estate Valuation Theory. (pp. 1-21). Springer, Berlin, Heidelberg.
Muñoz, C.B., Kenny, B. and Stecher, A. eds., 2018. Walmart in the global south: Workplace
culture, labor politics, and supply chains. University of Texas Press.
Murugan, B. and Francifca, P., 2019. A study on employee relationship management in retail
sector in trichy. South Asian Journal of Marketing & Management
Research. 9(3).pp.41-49.
Piskunova, L., Voronchikhina, M. and Akbar, T. O. A., 2018. THE WORLD LABOR
MARKET. MAIN TRENDS AND PROBLEMS OF RECRUITMENT. In Весенние
дни науки. ВШЭМ. (pp. 457-460).

Tráng, B. T. and Dũng, N. C., 2019. Retailer’s perception of impact of ASEAN Economic
Community on the growth of Vietnam retail market: A cognitive approach. Journal of
Asian Business and Economic Studies. 25(S02). pp.47-65.
Van Vliet, M. and Dubbink, W., 2019. Evaluating governance: state, market and participation
compared. In Creative Governance. (pp. 11-30). Routledge.
Vidal, G.G and et.al., 2017. Strategic Choices of an Entrepreneur Using Statistical Decision
Theory. Journal of International Business and Economics. 5(1). pp.75-84.
Vlacic, B., González-Loureiro, M. and Eduardsen, J., 2019. The Internationalization of SMEs:
Strategic Choices Under a Cognitive Approach. In Handbook of Research on
Entrepreneurship, Innovation, and Internationalization (pp. 439-466). IGI Global.
Yoboue, W. K., Yi, K. and Antwi, H. K., 2017. New paradigms in international market entry: A
reflection on the present and the future. International Journal of Scientific Research in
Science and Technology. 3(3). pp.59-67.
Online
EDWARD FERGUSON. Walmart’s Mission Statement & Vision Statement, Generic & Intensive
Strategies.2019. [Online] AvailableThrough: - <http://panmore.com/walmart-vision-
mission-statement-intensive-generic-strategies>
Share of Walmart's net sales worldwide in 2020, by division. 2019[Online] AvailableThrough: -
<https://www.statista.com/statistics/269415/share-of-walmarts-net-sales-by-division/>.