Internationalization Strategies of Walmart in Asia: A Detailed Report

This report provides an in-depth analysis of Walmart's internationalization strategies, focusing on its expansion into the Asian markets of China, India, and Japan. The report examines the various internationalization theories and strategies employed by Walmart, including joint ventures, majority-owned subsidiaries, and market entry approaches tailored to each country's unique consumer needs and regulations. It details Walmart's operations in these three key Asian countries, highlighting the specific strategies used, such as the acquisition of Seiyu in Japan and the joint venture with Bharti Enterprises in India. Furthermore, the report discusses the challenges Walmart faces in the Asian market, including competition, cultural adaptation, and the evolution of online retail. The report concludes by assessing the successes and setbacks of Walmart's global expansion efforts in Asia, providing a comprehensive overview of the company's international business strategies.

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Executive Summary
The report is built on the study of internationalization based activities that have been performed
by a global company in order to expand its processes in an international market. The firm that
has been taken into consideration for the study is Walmart. Walmart is a retail organization with
its origins in the US. The internationalization theories that have been implemented by Walmart
in order to expand its processes in Asia have been discussed in the essay. The three countries that
have been selected for this analysis are India, China and Japan. The challenges faced by the
organization in three countries are also an important part of the discussion made in the essay.

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Table of Contents
Introduction......................................................................................................................................3
Analysis of the global supermarket organization named Walmart..................................................3
Internationalization strategy used by Walmart................................................................................4
Analysis of the strategies implemented by Walmart.......................................................................7
Challenges and problems faced by Walmart in Asian market.........................................................8
Conclusion.................................................................................................................................11
References..................................................................................................................................12

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Introduction
As discussed by Anand (2015), internationalization is considered to be a process related
to planning and implementation of various services and products so that they are can be adapted
to the local languages and the cultures. This process can also be termed as localization.
Internationalization based process is also termed as the translation or the enablement of
localization as well. Internationalization is also a process of increase in involvement of the
various enterprises in the international markets (Baylis, Owens and Smith 2017). Different
international theories have also tried to explain the international actions that are accomplished by
the firms. The organizations that aim at expanding their operations on a global basis have to
implement different theories and strategies with respect to the needs and demands in new areas
or markets (Cavusgil and Knight 2015).
The essay will be based on the study of the internationalization process that is
implemented by a firm in order to start its operations in Asia. The company that has been taken
into consideration for the study of internationalization is Walmart. The strategies and approaches
that have been applied by Walmart in order to sustain its functions and the challenges that are
faced will also be discussed in the essay in detail.
Analysis of the global supermarket organization named Walmart
Walmart Inc. is a multinational retail based organization of American origin that mainly
operates large chains of discount department stores, grocery stores and chain of hypermarkets as
well. Headquarter of Walmart is located in Bentonville, Arkansas and was established by Sam
Walton in the year 1962. The organization had been incorporated in the year 1969 and Walmart

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currently owns the Sam’s Club retail warehouses (Corporate.walmart.com 2019). Walmart had
been able to develop more than 11,000 stores and clubs in around 27 countries of the world. The
firm operates under the name of Walmart in Canada and the US. Walmart has its operations
under the name of Asda in the UK and as Best Price in India (Corporate.walmart.com 2019).
Walmart has also gained the position of the biggest organization based on revenues of 514.405
Billion Dollars that have been earned in the retail industry. Walmart is also the biggest private
employer in the world with more than 2 Million employees in the world. Walmart had started its
global operations in different parts of the world with the help of effective internationalization
strategies. Currently Walmart is operating more than 6000 stores in different countries of the
world including Asia (Croucher 2018).
The major countries in Asia in which Walmart has started its processes include China,
Japan and India. The company has been quite successful in increasing its international presence
with the help of operations that have been developed in different countries of the world.
However, the internationalization and market entry approaches that have been applied by
Walmart in various countries are quite different. The market entry approaches have been applied
with respect to the needs of the customers in the selected countries. The internationalization
strategies of Walmart are thereby quite different in China, India and Japan (Chatterji 2017).
Internationalization strategy used by Walmart
Walmart has developed joint ventures in China and also operates many majority-owned
subsidiaries as well. Within the year 2019 Walmart China have started the operation 431 stores
with the name of Walmart Supercenter, Sam’s Club and the Neighborhood Market banners. The
company had also been able to increase its stakes in the Chinese online supermarket based

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industry in the year 2012 in order to tap the increase in wealth of the consumers in the country
(Hitt, Ireland & Hoskisson, 2016). The company has also started offering more products to the
consumers with the aim of proper enhancement of the consumer base. Full ownership was also
gained by Walmart in China within the year 2015. The company has been able to grow the
operations of its business in China in a successful manner (dela Rama and Rowley 2017).
Walmart operates in Japan with the name of Seiyu and within the year 2019 the firm has
been fruitful in developing 331 stores in different parts of the country. The different types of
stores that are operated by Walmart in the country include Hypermarket, General merchandise,
Supermarket, Livin and Sunny banners. Walmart had announced a joint venture with Bharti
Enterprises in the year 2006 in order to start its operations in India. The foreign corporations
were not allowed to start their operations in India (Eryılmaz 2017). The development of joint
ventures is thereby considered to be an important part of the operations of Walmart in the
country. Bharti Enterprises has been provided with the responsibility to manage the front end
based operations of Walmart in India and the back end operations are controlled by Walmar wort
itself. The name under which Walmart currently operates in India is Best Price Modern
Wholesale. The first store of Walmart was opened in India in the year 2009 (Fannin 2016).
The market entry strategy that is implemented by an organization is the most important
part of the internationalization process. The strategies for international market entry have been
chosen by Amazon with respect to the needs of the market and the consumers as well. Walmart
has been functioning in different parts of the world with the help of its private brands. Each of
the markets and countries are treated by Walmart in a different manner and the strategies that are
formed for the markets are also quite different in nature (Gopalakrishna, Subramanian and
Fleischmann 2016). The corporate strategy that has been applied by Walmart is thereby based on

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the ways by which the organization aims at dominating the retail space. The expansion of
Walmart in India that is considered to be one of the largest markets in Asia was not quite easy.
The organization had to develop joint ventures with other organizations in order to develop its
processes in the retail industry of India (Hirst, Thompson and Bromley 2015).
The approach that is implemented by Walmart in order to develop international strategies
is mainly related to the formation of strong relationships with the employees and suppliers as
well. The founder of the organization Sam Walton provides major importance to the proper
formation of relationships in order to uphold the international operations in an effective way. The
company aims at capitalizing every opportunity related to proper cost saving that is offered in the
international markets (Hunt, Watts and Bryant 2018). The strategies are mainly based on the
ways by which best quality of goods can be provided to the customers whenever they need them.
The cost structure is also developed in such a manner that helps in the development of proper
competitive pricing and maintaining a reputation that is based on high levels of trustworthiness
(Karlsson, Cornett and Wallin 2018). The operations of the stores of Walmart are also based on
“Everyday Low Price” philosophy. The organization has also emerged as an industry leader with
the help of its operations in the last few years. Walmart aims at passing the savings to its
customers in order to keep the costs low. Walmart is still improving the business processes and
managing them the operations centrally as well (Jones et al. 2015).
The strategy that has been applied by Walmart is also based on the management of value
chain of the organization and development of lowest prices as well. The levels of inflation are
also able to influence the various strategies that are developed and implemented by Walmart.
The major competitive advantage that is a part of the international approach of Walmart is
mainly based on the low prices of the products that are offered to customers. The competitive

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pricing of products is also able to play a key part in providing major benefits to the end
customers of the organization (Leuprecht and Sokolsky 2015).
The large product portfolio of Walmart is also considered to be a major part of the ways
by which the firm is able to maintain its position in the retail industry. The success levels of the
strategies are considered to be an important part of the operations of Walmart in different parts of
the world. The proper management of the operations of a huge retail chain like Walmart is
considered to be a major aspect related to the international operations of the firm in different
parts of the world (Milanovic 2016). Distribution strategy of Walmart and development of proper
supply chains are also important factors that are related to the global operations of the company.
Different formats that have been developed by Walmart in order to operate its stores in an
international basis include retail stores, wholesale operations and others (Pieterse 2019).
Analysis of the strategies implemented by Walmart
Walmart has been moderately successful in its operations in China and the organization
has recently implemented changes in its online strategy as well. The online business platform
named Yihaodian has been sold to Alibaba. The physical outlets that had been developed by
Walmart in China had been underperforming since the last few years. The company has also
struggled to maintain the sales on its online platform in the country (Tiwari, Sen and Shaik
2016). Walmart had aimed at improving the levels of revenues that are gained in China with the
help of a proper combination of the online and the physical stores as well. The hypercompetitive
retail sector in China had also proved to be a major setback for Walmart in order to sustain its
operations in the country for a long period of time. The strategy that has been recently

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implemented by Walmart in order to maintain its operation in the retail market is based on the
sales of its platform to a major Chinese retail based organization (Windsor 2017).
Walmart had entered the retail industry of Japan in the year 1999 with the help of joint
venture that has been formed with a struggling retailer of the country Seiyu. The firm had been
operating around 400 units in the country and the joint venture developed with Walmart had
provided major growth opportunities to the organization as well. The structure of Seiyu had been
reorganized in the process and the company had been able to start the joint operations with
Walmart as well (Tiwari, Sen and Shaik 2016). The first pilot store of Walmart was opened in
Japan in the year 2004 with the help of joint venture with Seiyu. In the year 2008 Seiyu was
acquired entirely by Walmart with the aim of continuing its operations in the country. The
physical stores of Walmart in Japan were also based on the concept and structure of the Japanese
organization Seiyu (Leuprecht and Sokolsky 2015).
Challenges and problems faced by Walmart in Asian market
China has been proving to be a large market for the various global organizations that
have been entering the country in the last few years. The country has also led the world in the
infrastructure investment sector with the support that is provided by its large population and
increase in levels of consumer wealth as well. The Chinese operations of Walmart have struggled
in a huge manner in order to generate the right amounts of profits that are required for the
purpose of maintaining the operations of firm (dela Rama and Rowley 2017). Walmart has
depicted a consistent underperformance in a market that has huge levels of potential. The cultural
and cross-country based differences have also been able to play a key part in the growth of
challenges that have been faced by Walmart in the retail industry of China. The managers of

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Walmart have not been able to understand the political, cultural and economic environment in
China in a successful manner for the purpose of maintaining its operations in the country (Hitt,
Ireland & Hoskisson, 2016).
Cultural misunderstanding has also been considered as a major reason behind the lack of
revenues of Walmart in Japan. The organization has not been successful in grasping the retail
and consumer environment in the country. Japan is considered to be a large economy and is able
to provide major chances of growth to the international firms (dela Rama and Rowley 2017).
However, the requirement of proper customization of local supplies was not considered by
Walmart in order to develop the product base in Japan. The behavior of consumers in Japan is
also quite different from that of the consumers in the US. The small specialty stores have gained
much more importance in Japan in comparison to the large supermarkets. This has thereby
proved to be the most significant reason for lack of proper growth of Walmart in the country
(Croucher 2018).
The growth of Walmart has been quite huge in different parts of the world and the entry
of the organization in India is an important part of the expansion policies of the firm. Walmart
had developed a partnership with Bharti Enterprises in order to start its processes in India. The
company had dissolved its joint venture with Bharti Enterprises in the year 2007. The main
purpose of the joint venture was to develop the stores of Walmart in different parts of the
country. The superstores of Walmart had been opened in different cities including Zirakpur,
Amritsar, Jalandhar, Kota, Bhopal, Ralpur, Indore, Vijayawada, Agra, Meerut, Lucknow and
Jammu (Forbes.com 2019). Walmart had promised to serve the Indian customers even after the
partnership had been dissolved with Bharti Enterprises, However, the major challenge that had
been faced by Walmart in Indian retail industry was based on the regulations that had been made

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by the government based on entry of global organizations. Walmart aims at developing its own
supply chain and infrastructure in the country where it has started its operations. However,
according to the regulations that have been developed by the government, the international
organizations need to source their raw materials from the local suppliers (dela Rama and Rowley
2017).
Walmart had developed a partnership with Bharti Enterprises in order to liberalize the
Indian market in an effective manner. However, the organization has been not been successful in
maintaining a profitable position in the Indian retail industry. The huge potential of Indian retail
market has not been used by Walmart for the purpose of maintaining the growth that it has
already gained in other countries. Walmart has thereby been shifting strategies with the aim of
maintaining its revenues and growth of the company in retail industry. The strict rules related to
FDI or foreign direct investment in India had an adverse impact on the operations of Walmart in
the country (Forbes.com 2019). The development of joint ventures is considered to be a major
part of the strategies that can be developed by an international organization in order to enter
India. After separating its operations from Bharti Enterprises, Walmart has recently made the
decision to develop a joint venture with Flipkart in order to maintain its position in India
(Forbes.com 2019).
Walmart has decided to take over Flipkart in order to increase its revenues and growth in
India and providing opportunities to the local people as well. The organization aims at creating
jobs for individuals belonging to the local communities and it also tries to source the raw
materials from the local suppliers. Walmart has also considered the Indian market to be highly
challenging in terms of the regulations and taxation based laws as well (Forbes.com 2019).
Walmart considers the Indian market to be attractive in nature and has huge potential along with

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an effective mix of customers as well. Around 443 million millenials and 393 Million generation
Z based population are a part of the customer base of Walmart. However, the challenges are
mainly based on the methods by which regulations can be applied by the organization in order to
sustain its position in the retail industry (Forbes.com 2019).
Conclusion
The essay can be concluded by stating that although Walmart has been a highly
successful organization in different parts of the world, the organization has not been successful
in the proper development of its position in Asia. The cultural differences and lack of
understanding of the local markets have led to the lack of proper growth of the firm in the three
major Asian countries China, Japan and India. Although all the three countries have the ability to
provide lucrative market and huge opportunities to the organization, Walmart has failed to use
the opportunities in an effective manner. The growth of Walmart in the retail market in the Asian
countries has not been able to contribute to the overall operations of the firm in different parts of
the world.

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