BUSI1039: Walmart's Business Model and International Failures

This assignment analyzes Walmart's business model, focusing on its strategies, supply chain, and competitive pricing. It examines Walmart's global expansion efforts, particularly its failures in Germany, attributing these to a lack of cultural sensitivity and an inability to adapt to local market preferences. The analysis highlights the importance of understanding local customs, conducting thorough market research, and considering the social responsibility of businesses when expanding internationally. The assignment also explores the impact of Walmart's practices on local communities and small businesses, emphasizing the challenges they face due to Walmart's dominance. The document concludes by emphasizing the need for businesses like Walmart to be more socially responsible and sensitive to local customs when venturing into new markets.

In Class Assignment 2
Student Name:Kirat Dhawan
Student ID:500209277
Course Code:BUSI1039
Instructor Name:Bruce Winder
Assignment Title

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About Walmart
Walmart is consistently ranked as one of the most successful and largest retail enterprises worldwide.
Sam Walton was the one who initiated the business back in 1962. The United States of America is home
to this corporation's primary office and administrative hub. The primary focus of the business is on
delivering reliable price reductions, devoted customer support, and brisk, pleasant assistance to
customers.
Walmart's goals include growing its retail presence in major cities across the globe and expanding its
commercial operations in those locations. Walmart's retail establishments can be broken down into four
distinct categories: Walmart Supercenters, Discount Stores, Neighborhood Markets, and Sam's Club
warehouses. These Walmart stores are visited annually by more than one hundred million customers.
It creates a very uneasy situation for local communities and small businesses in the United States.
Walmart comes to their area and offers a variety of items at reasonable prices while also providing the
greatest customer service. It is a very precarious situation for small business owners and merchants in
the United States. Walmart is seen by downtown merchants as an entity that simply appears and
swallows up all of the competition.
Walmart's purchasing power, relentless marketing, and commitment to offering low costs to customers
have a tendency to syphon business away from smaller shops. The goal of the Walmart firm to one day
become the largest retailer in the world is getting closer and closer to being realised day-by-day.
However, they accomplish this by engaging in unethical practises and showing little respect for the
traditions or languages of the communities in which they operate.
There are many distinct models of business that successful organisations use, and these models can shift
depending on the circumstances. Walmart's business model is built on the principle of cutting out the
middleman in the supply chain whenever possible. Eliminating the need for a middleman enables
businesses to pass savings on to customers in the form of reduced prices for the goods and services they
offer. Walmart's business strategy corporation has as its primary goal the penetration of every sector of
the market, followed by the establishment of market dominance through the provision of goods at
reduced prices.
Under the banner of its slogan "Everyday Lower pricing," the company's primary method of marketing
emphasises "leading on price," "being competitive," and "delivering a fantastic experience" to
customers.
Walmart in Germany
In spite of the fact that it is a massive international company, Wal-Mart has been unsuccessful in its
attempts to integrate into foreign countries. According to the New York Times, at least some of this
failure can be attributed to hubris, which the newspaper defines as "a uniquely powerful American
enterprise trying to impose its values around the world." Wal-Mart has reportedly lost hundreds of
millions of dollars since 1998 in its efforts to expand into Germany. This was largely due to a lack of
awareness of cultural norms, such as mandating that employees smile at customers.
clients while simultaneously leading a morning chant for staff members. The Germans thought this was
quite unusual and it made them feel very out of place. In addition, they did not compete with local

stores that offered comparable goods at lower costs, and they did not adapt their pricing to account for
shoppers' preferences in terms of how and where they shopped. Companies like Wal-Mart, from which
we might learn that they should be more socially responsible,
and sensitive to local customs when venturing into uncharted territories in terms of market expansion.
Wal-Mart is a uniquely American firm, and it, along with other businesses, should not enter other
markets with the idea that residents of those nations will have the same social or buying patterns as
consumers in the United States. Before embarking on an initiative of this nature, businesses ought to
retain the services of regional consultancies and conduct focus groups and simulations.
learn more about the areas into which they will be expanding. This will not only raise the likelihood of a
successful entry, but it will also save the company money in the long term by preventing the
development of concepts that, if pursued, would be wasteful.
References:
https://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart
https://startuptalky.com/case-study-of-walmart