MGT-672: Decision Theory - Walmart's Global Strategies Analysis Report

This report examines Walmart's global expansion strategy, focusing on its early international ventures and the rationale behind its market entries into countries like Canada, Mexico, and Latin America. It analyzes the tactics employed, such as government coordination, targeting the middle class, and partnerships with local businesses. The report also delves into the cultural problems Walmart faced in various international markets, including resistance from local communities and differing consumer preferences. It discusses the benefits and challenges of Walmart's expansion, considering both internal and external factors, such as government regulations and competition from local retailers. The report further explores Walmart's market entry strategy, emphasizing joint ventures and partnerships, and concludes with insights into the company's strategic approach to maximizing profits in the global market. References to relevant academic sources are included to support the analysis.

Running Head: WAL-MART’S GLOBAL STRATEGIES
WAL-MART’S GLOBAL STRATEGIES
Abdulkarim Fayez Al Rashedi
MGT-672: Decision Theory within the Global Marketplace
Colorado State University – Global Campus
Dr. Mark Ellis
March 20, 2020

WAL-MART’S GLOBAL STRATEGIES 1
What was Walmart’s early global expansion strategy? Was this a good strategy for
Walmart? Why or why not?
Walmart Inc is a multinational retail corporation of the America that tends to function within
a chain of hypermarkets, department stores with discounts and grocery stores. The aim of this
paper is to understand the operational function of the company and understand the market
strategies that is being followed.
When the Walmart took the initiative of volunteering beyond its domestic markets, the
company required to determine the accurate form of entrance. On the other hand, it is to be noted
that the Walmart company was being driven by market seeking as well as by the resource
seeking creativities when the company decided to enter the Latin America and Canada (Spicer
& Hyatt, 2017). However, the tactics that was being chosen by the company in order to enter the
country are as follows:
 Maintain a co ordination with the officials of the government
 Focusing on the enhancing purchasing power of the middle class
 Creation of the partnership with the domestic businesses and that of the organizations.
It is to be noted that though both Canada and Mexico tends to have geographic locales with that
of the Central America, the reasons for which Walmart went into Mexico and Canada is because
of the production of the North American Free Trade Agreement that became very much
significant by the time of 1994 (Elder & Dauvergne, 2015). The agreement limits the association
of the Us’s cost of working together. This gives the right to the Walmart to have an upper hand
over various contenders while working in the Canadian and the Mexican Business sector. It was
being identified by the company that internalization was the main priority of the company. In

WAL-MART’S GLOBAL STRATEGIES 2
order to have growth in the future, it was being understood by the company that the company
must make its explorations outside the US as well. Staying within the US, will not help the
company in making more profits. The benefits will remain confined in itself. Low price promise
was being made by the company. The company adopted the productive business strategy which
claims that the stores in each of the country will be having different names and the products will
be made as per the different preferences as well (Hunt, Watts & Bryant, 2018). The company
will be making the products as per the requirement of the different country. The corporate
management strategy of the company is that they are going to sell the products of the high
quality in low price in itself.
The strategy is considered to be a successful one as it brought great advantages and
profits to that of the company in itself.
What cultural problems did Walmart face in some of the international markets it entered?
Various number of cultural problems are being faced by the international business. The
company Walmart is not an exception. There are case in which the local business communities
tends to put pressure on the authorities in order to reject the company’s allowance to operate.
There are situations in which the communities tends to include the company in order to protect
the values of their community (LIU, 2013). The various types of culture that are prevalent is also
considered by the company in order to open up new stores. The cultural preferences also tends to
have a great impact as well. for example, the retail customers of the Brazil tends to consider the
quality of the product to be the most important factor in the decision making. Hence, the
differences in the culture also tends to act as a barrier.
Benefits and challenges of expansion

WAL-MART’S GLOBAL STRATEGIES 3
The challenges that are being faced by the company tends to vary from the regulations of
the government to culture and that of the competition. Various external and internal problems are
being faced by the company the external problems are enlarged in the expansion efforts of the
company. The internal problems tends to involve the company’s inspecting the company in itself
as the unbeatable through the competition, it can be said that the company tend to ignore the
small traders who are operating the stores outside the roadside (Muñoz, Kenny & Stecher, 2018).
This tends to show that the company lacks to make the right decision which acts as a challenge
for the company. The management of the company also realized that acquiring the share of the
market by the small traders was in itself a huge challenge. The small traders tends to enjoy the
support that is being gained from the local community who tends to abominate the western
countries.
Benefits and challenges of the strategy in the Latin America
The attitude of the latin people are not inclined towards the everyday low price. This is
mainly because the people of the United States and the Canada tend to shop in order to have
social gatherings. As a result the operational strategy was being changed. On seeing the
stabilized financial as well as the political environment, the company intended in enhancing
targeting the developing countries (Frynas & Mellahi, 2015). On the basis of the different
preference of the consumers, Wal-Mart through a combined venture entered the market of the
Mexico and Brazil market. The idea has been further utilized in Mexico and Brazil as various
strategic bases in order to get stretch to other Latin American markets (Rothaermel, 2016).
Taking the advantage in Brazil and Mexico, Walmart took the initiative of conquering the
rest part of the Latin America as well. however, one of the challenge that the company will be

WAL-MART’S GLOBAL STRATEGIES 4
facing is that of the company will be facing huge competition from the local retailers who can
function on the limited margins even can even give more personalized services in comparison to
the offers that can be provided by the retailers of the U.S (Lang & Klein, 2015). However, one
of the advantage of the company is that of the growing of the super market chains at the prices
which are competitive as being done in that of the Chile (Van Rooy & Oehler, 2013). The
company has a great opportunity of taking the advantage of the collapse of the credit market
which the other competitors have suffered from. However, through this, it helps in the making of
the mergers and that of the acquisitions, incorporation of the economical solutions which are
already developed by the other companies.
Market entry strategy
Market entry strategy is considered to be a planned circulation and distribution method of
goods or the services to that of a new market which is being targeted. The entry strategy that can
be applied by the Walmart Company is through the joint ventures or partnering with the other
companies (Frynas & Mellahi, 2015).
The method is which this entry strategy can be implemented are as follows:
 Planning must be done in order to understand the objectives of each party or the wants of
one company from that of the other.
 The joint venture partner must be rightly chosen,
 Creation of the joint venture agreement or document
 It is important to have a successful working of the joint venture relationships
 Ending a joint venture on the right time and adapting with the new changes is very much
necessary.

WAL-MART’S GLOBAL STRATEGIES 5
The conclusion that can be derived from the study is that Walmart is a very significant
business organization. However, in order to gain more profits in the market business, the
company must follow these strategies which will help the company in gaining profits in the
long run.

WAL-MART’S GLOBAL STRATEGIES 6
References
Spicer, A., & Hyatt, D. (2017). Walmart’s emergent low-cost sustainable product
strategy. California Management Review, 59(2), 116-141.
Elder, S. D., & Dauvergne, P. (2015). Farming for Walmart: the politics of corporate control and
responsibility in the global South. The Journal of Peasant Studies, 42(5), 1029-1046.
Hunt, I., Watts, A., & Bryant, S. K. (2018). Walmart’s international expansion: successes and
miscalculations. Journal of Business Strategy.
LIU, Y. (2013). Strategy Adjustment of Walmart China. Management Science and
Engineering, 7(4), 88-93.
Muñoz, C. B., Kenny, B., & Stecher, A. (Eds.). (2018). Walmart in the global south: Workplace
culture, labor politics, and supply chains. University of Texas Press.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press,
USA.
Heller, F. (2017). Technological innovation applied to walmart and tesco’s supply
chain (Doctoral dissertation).
Lang, S., & Klein, L. (2015). Walmart’s sustainability initiative. The Routledge International
Handbook of the Crimes of the Powerful, 197.
Van Rooy, D. L., & Oehler, K. (2013). The evolution of employee opinion surveys: The voice of
employees as a strategic business management tool.
Rothaermel, F. T. (2016). Strategic management: concepts (Vol. 2). McGraw-Hill Education.