logo

Report on Foreign Expansion Strategy- Walmart

   

Added on  2020-02-05

13 Pages4303 Words44 Views
Walmart Expansion1

Table of ContentsINTRODUCTION...........................................................................................................................31. Foreign market analysis and environmental reasons for international expansion.......................32. Failure of Walmart in South Korea and Germany ......................................................................73. Importance of cross cultural understanding in international business .......................................9CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................122

INTRODUCTIONForeign expansion strategy includes expanding the business activities across severalregions of the world. International business can create lot of opportunities for a company and ithelps them to increase their revenues. But, it is essential for a business to carefully understandand evaluate the culture and preferences of people in a particular region. It will benefit thecompany in the long run as they can provide customized products to them. The present report isbased on foreign expansion strategy of Walmart Company. It is the world's largest retailer and ithas more than 11,527 stores in 28 countries (Walmart case study, 2015). They have earned morethan $91 million from their foreign business and it is expected to grow more in future as well.Walmart Company has used many tools to conduct market analysis and cross cultureunderstanding. This has enabled them to create and implement their international strategies.Apart from this, the reasons why Walmart failed in Mexico and Germany have also beenincluded in the report. 1. Foreign market analysis and environmental reasons for international expansionWalmart has been the largest retailer in terms of revenue generation. They have expandedtheir business to more than 28 countries which include UK, Canada, Brazil, Mexico and China. Itis essential for the company to analyse the foreign market in which they are planning to expand.This will help them to grow their business and meet to the expectations of the customers. Marketanalysis tools and techniques can be helpful for a business to analyse demand, supply, buyinghabits, culture, technology and competition (Brea‐Solís, Casadesus‐Masanell and Grifell‐Tatjé, 2015). Walmart Company had to face an issue in Mexico. They soon discovered thatbuying habits of the customers in Mexico are different from US customers. They have to changetheir entire strategy to adapt the needs of the customers. Market analysis can be very useful inthis respect for the company. It helps them to formulate strategies and plans specifically to aparticular nation. Macro analysis (PEST)Foreign market analysis is incomplete without the use of PEST analysis. It can be used toidentify the influences of the business in a particular nation. Walmart Company has beencarrying out PEST analysis to understand the competition, resources and demand of people.These factors are country specific so the company has to adapt to it. 3

Political and Legal: Political and legal structure of each country are different. Walmarthas to abide the rules, tax laws, employment policies, trade restrictions etc (Patel, Pieperand Hair Jr, 2016). They have to take into account the political stability of the countrybefore growing their business in a particular nation. Environmental: Walmart has improved their operational efficiency and they have beenfollowing all the rules and regulations of the government (Verbeke and Kano, 2016).They have adopted standards of performance in order to comply with the businesssustainability trend. Social: Socio-cultural factors can affect the growth of a business. Walmart Company hasbeen successful in adapting to the changing needs of the population (Business analysisfor Walmart, 2015). They have made many changes in their products and services inChina and Mexico. This has given them a competitive edge in the market which hashelped them to expand their business easily. Technological: Technology has played a major part in changing the competitiveness ofthe retail industry (Frynas and Mellahi, 2015). Walmart Company has availability ofadvanced technology which has reduced their cost. They have started selling goodsonline so as to meet the expectations of the customers. Micro analysis SWOT Walmart Company has good brand image and they have all the resources to expand theirbusiness across the geographical borders of a nation. SWOT analysis of the company shows theirpotential to exceptionally do well in other regions as well. StrengthsWeaknessesLow cost advantage. They have effective supply management which helps them to keep the cost to minimal. Strong brand image and market presence.Economies of scale in terms of distribution, procurement and advertisement.Competitors can copy the supply management strategy of Walmart.Failure of Walmart in some regions likeGermany and South Korea. Slow expansion in metropolitan areas. 4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Global and Transitional Business Assignment 2022
|19
|5290
|12

Walmart Foreign Expansion Report Assignment
|13
|3257
|717

Global and Transnational Business Doc
|21
|7242
|478

Case Study of Walmart Global Operations
|14
|3011
|213

Case Study International Business- Walmart
|10
|3025
|300

Global Business Issues in Walmart - Cultural, Workplace and Environmental Sustainability
|18
|4684
|310