Walmart: A Retail Bully? Impact on Global Markets and Retailers

This report, authored by a student and available on Desklib, examines the impact of Walmart on the retail industry, particularly focusing on its influence on both small and large retailers across different geographical locations, including India, Germany, and Japan. The analysis covers Walmart's strategic approaches, such as cost leadership and market dominance, and evaluates the consequences of its entry into various markets. The research explores the factors behind Walmart's successes and failures, including its ability to adapt to local consumer behaviors and competitive environments. The literature review delves into how Walmart affects the birth and death rates of small retailers, its competitive advantages over other retailers, and its operational strategies. The report also investigates the challenges faced by Indian retailers upon Walmart's arrival. The report offers a comprehensive overview of Walmart's market influence, supported by literature reviews, case studies, and statistical data.

Running head: WALMART: A RETAIL BULLY
Walmart: A Retail Bully
Student Name: Shubham Vishwakarma
Tutor: Lynda Hannam
Subject: MFP Research Project
CEG NO.- CEG08042354

1WALMART: A RETAIL BULLY
Table of Contents
Introduction:...............................................................................................................................2
Organisation:..........................................................................................................................2
Why I am interested?.................................................................................................................3
Research Objective:...................................................................................................................3
Research Question:.....................................................................................................................3
Hypothesis:.................................................................................................................................3
LITERATURE REVIEW...........................................................................................................4
Taxonomy:.................................................................................................................................8
Evidence...........................................................................................................................10
Table : Evidence supporting the hypothesised statement........................................................12
Research Methodology:...........................................................................................................12
References:...............................................................................................................................15

2WALMART: A RETAIL BULLY
Introduction:
The retail store has been a significant contributor to the annual GDP of any country
and it is visible from the fact that in the year 2016 10 % of the total GDP of India was
contributed by the retail industry (Ibef.org 2018). So, the retail industry deserves the attention
of the researchers and scholars. Walmart is considerably the leader in the retail industry
currently. However, several literary works have cited that the local retailers suffer when
Walmart enters their geographical domain. The devised paper will contribute to the discussed
topic and will evaluate the impact that major retail organisation cites on the small retailers.
The objective of the paper will be achieved by analysing the impact of Walmart on the Indian
retailers.
Organisation:
The subject of the research is Walmart Inc., an American retail MNC (multinational
corporation). The company was established in 1962 by Sam Walton and is headquartered in
Bentonville, Arkansas and was incorporated in the year 1969 (Our History 2018). The
deemed organisation owns 11,718 stores in 28 countries as dated on 31st January 2018 (About
Us 2018). The organisation operates by the name of Asda in the UK (Walmart acquired Asda
Stores Ltd.in 1999) ("Our History - ASDA Corporate" 2018). The organisation employees
over 2.3 million globally which is the most by any private organisation. Currently, the
company serves around 26 billion members and customers in a week at little higher than
11000 stores under various collaboration and banners, and its sales figure have crossed $482
billion marks (About Us 2018). The deemed organisation is a leader in sustainability,
corporate philanthropy and employment opportunity (Bertrand et al. 2018). Stankevičiūtė,
Grunda and Bartkus (2012) in their published article have put an effort to determine the
strategic plans of the Walmart. The primary focus of the article has been laid on the business

3WALMART: A RETAIL BULLY
decision making of the organisation and how it had assessed them in earning a cost leadership
globally in the retail industry. It can be evaluated from various other resources that the
organisation offers the requirement of the consumers at a price that no others retailing service
can, to earn cost leadership and hence competitive advantage in the market.
Ansoff Matrix:
Existing products New Products
Existing Markets Walmart’s market exists in
over 28 countries where they
supply groceries and other
daily needs.
Launch of private clothing
brand & “check out with me”
a strategy to offer customers
a personalised shopping
experience while saving
time.
New Markets The organisation has
partnered with Indian e-
commerce giant, Flipkart to
capture food delivery in
India.
Planning to deliver food
online which market is
currently dominated by
Amazon.
Why I am interested?
I am interested in Walmart because in future I will be opening retail outlets just like
Walmart bit in different pattern. As I will be starting from my home town and then wanted to
expand all over the country. However, to attain my objective I need to understand the

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strategic ways that Walmart uses to bully other retailers for earning competitive advantage, so
that inspired from it I can develop a strategy that is ethically and commercially beneficial.
Why it is important?
As I mentioned above that Walmart is one of the world’s leading retail giant with
good experience which enables me to look at the success of Walmart that how he was being
able to took challenges and the ways Walmart by which it mitigates those challenges.
Research Question:
How is Walmart influencing the commercial market?
 What is the impact of Walmart in larger town and smaller town?
 Why Walmart was failure in Germany, Japan and South Korea?
 What strategies did Walmart used in India?
Hypothesis:
 Walmart make difficulty for small retailers to survive in the market and forced them
to go out of the market and letting to quit in global market. I believe that Walmart has
a monetary dominance and good marketing strategy.
LITERATURE REVIEW
Impact of Walmart on Small towns and bigger towns
Wolff-Mann (2015) in the article published in the time.com cites the impact that
Walmart has in the small towns. The article suggests that the economy of the town which
Walmart steps in gets thrown in commotion. The reason associated with the above mentioned
claim was the low prices offered by the retail giant. The article has also cited the example of
30% drop in the sales of a 44-year old store after the retail giant entered the town along with
several other examples as evidence to the theme of the article. It has even claimed that, if the

5WALMART: A RETAIL BULLY
retailing giant closes its operations in the smaller towns, than the results may be devastating
for the town. The reason for the claims is that the Walmart made the things that were not
readily available in the market available in the town and now for the same things the
consumers will have to put extra effort, money and time. The reviewed article has cited both
the advantage and challenges that Walmart offers to a small town, however, the motive of the
article remained unclear. The unclear motivation of the article here refers to the fact that the
article has not supported any particular claim and have taken both the aspects which may
cloud the understanding of readers who are not clear about the idea of management and its
technical factors.
Birth and Death of Small Retailer from Walmart’s entry:
Ficanco (2013) in the published article has attempted at evaluating whether the effect
that Walmart’s entry cites on the small retailers is positive or negative. The article has cited
many different article and research work that had been done on the retailing giant and its
impact on the small retailers to derive its conclusion. Along with the previous research work
the paper has also adopted different models and stated facts to attain the deemed objective of
the paper. In other words, the paper has adopted secondary data collection methodology to
attain its objectives. The evaluation results state that the birth rate of retailing stores in the
absence of Walmart is higher while the death rate is higher when Walmart is present in the
town which coincides with the claims made by other research works by Brenes, ciravegna
and Montoya (2015), Chekwa, martin and Wells (2014) and others. Contradicting, to the
previously reviewed article the deemed article along with facts suggests that it is beneficial
for the small retailers if Walmart or any other multinational retailing giants are absent in
smaller towns. The deemed article offers reliability with appropriate referencing and stats to
support its claim. The image attached below cites evidence to those stats. It even supports the
claims of the research work that is to proof that Walmart is a retail bully. However, the

6WALMART: A RETAIL BULLY
complexity and the language of the reviewed article may be unclear to the readers that are not
with a statistical background
 Walmart vs Other Retailers:
Brea-Solis et al. (2015) in their article have attempted at citing the significant
difference between the retailing giant Walmart and rest of the retailing industry. The report
has cited the reasons for the competitive advantage that Walmart enjoys. The reasons are
specifically associated with the lower prices and innovative approach. The paper cites that the
retailing industry is a boon for the economy of the town where the subject enters as it offers
customer satisfaction and generates employment opportunities. The authors of the paper are
partially correct about the claims. The reason for stating the statement is that, though the

7WALMART: A RETAIL BULLY
Walmart offers job opportunity and products at a lower price, however, the economy of the
town gets decreased due to the impact of the former on minor retailers (Mielach 2012).
However, the innovative approach and market dominance of the subject is something that no
one will argue about. The subject has also been criticised for exploitation of its employee.
Hence, it is suitable to state that though Walmart is the most prominent retailer, however, the
subject has achieved the deemed position by stepping over the small retailers.
Impact of Walmart on larger towns:
Merriman et al. (2012) also attempted to evaluate the impact that Walmart on retailing
stores in Chicago. However, in the deemed case the authors took consideration of larger cities
instead of the smaller. One of the most significant stats that shows the level of impact that
Walmart cites over small retailer is that the stores closer to the subject were facing a high
percentage of getting close. The deemed probability though decreases by 6 % per mile. The
authors also stated that opening of the shop (Walmart), costed 300 full-time jobs in the
neighbourhood. The loss of jobs was caused due to the closing of the store.
The opinion of the deemed paper is mutual with the research work done by Elickson
and Grieco (2013) in which they claim that the impact of the subject is harshest on the stores
within 2 miles range. The paper also supports the claim of the above-discussed article that the
effect of the Walmart’s presence decreases with increase in distance. Both of the articles are
focusing on the same issues. However, the most contrasting difference between the two is
their methods of presentation. The former has adopted general method while the latter has
opted for practical approach. The former is easily understandable to the readers while the
latter demands expertise knowledge about the topic.
Failure of Walmart in Japan and Germany:

8WALMART: A RETAIL BULLY
Unlike Americans, Japanese people don’t buy in bulk quantities. Preferring buying
small quantities they don’t accept the concept of supermarket retail shops. They tend to buy
fresh foods only. Japanese people prefer luxury goods and Wal-Mart was not able to cater the
high segment of the market (Balsas 2017). There are big number of small suppliers in Japan
who caters the limited number of retailers because of this the suppliers and retailers have
developed trust and build up a strong relationship between each other. In Japan waste
management is very costly and they are very concerned about their environment which is
another reason for them not to buy in bulk. In Japan the large store ‘one-stop shopping’
supermarket format like in UK and EU is not acceptable and will be a never preferred way
for grocery shopping in Japan. Japanese people like convenience but for the convenience
have different meaning contrary to UK and EU.
When entering the German market Wal-Mart was forced to purchase to relatively
weak chains, Interspar and Wertkauf, which included various size of stores. After these
acquisitions Wal-Mart was at 11th place in Germany amongst supermarket retail stores (Burke
2017). In Germany the German food market is highly concentrated so, the top five retail
stores account for nearly 80% of overall sale in Germany. Hence, Wal-Mart started from
relatively feeble position. In Germany Wal-Mart was unable to ‘get to sale’ and its inability
to exercise its network power made the situation worse for Wal-Mart to transfer the Anglo-
American model of lean in Germany.
Walmart’s entry in Indian retail market:
Bengale and Jadhav (2017) in their paper have focused on the challenges that the
Indian retailers faced on the arrival of the Walmart. The paper has taken reference of the
overall FDI (Foreign Direct Invest) in India to explain their point. However, the focus is kept
on the retail industry. The paper claimed that the death of the small retailer has comparatively

9WALMART: A RETAIL BULLY
increased on the arrival of the retailing giant. Additionally, the paper has concise all the
details together to uncover the potential impact of the retailing giants on the minor ones and
how can the latter attempt at sustaining themselves.
Walmart strategy for growth in India:
Walmart is having a mission ‘Saving people money so they can live better (Walmart
2015a). While its mission in India is to “Enable Small Business to prosper”
(Corporate.walmart.com, 2018). The mission of Walmart India is contradicting to its global
image which states that it kills small businesses as discussed in the literature review above.
Walmart joined hands with the Bharti group but their joint venture did not work out as
successful (Matusitz 2015). In 2013, Walmart takes complete control of the organisation and
in 2015, 20 stores were being operated by the name of Best Price.
These articles are reviewing that Walmart’s presence has a catastrophic result on the
smaller retailers and above mentioned statement supports my hypothesis that Walmart is a
retail giant and retail bully. As it is observed that Walmart is enjoying the benefits of its
monetary dominance in market globally and making difficulty for others to survive in the
market. The monetary dominance in the deemed scenario means the cost efficient products
than its competitors. As you can see in the table mentioned below with the different articles
provide evidence for supporting my hypothesis.
Taxonomy:
The table below provides you a taxonomy
Topic Article Chosen Description
Impact of Walmart on
Small towns
Wolff-Mann, E. 2016. The New Way
That Walmart Is Ruining America's Small
The article will enable
the author to understand

10WALMART: A RETAIL BULLY
Towns. [online] Money. Available at:
http://time.com/money/4192512/walmart-
stores-closing-small-towns/ [Accessed 2
Mar. 2018].
the impact of Walmart
on small towns, when
present and when it
leaves the town.
Birth and Death of
Small Retailer from
Walmart’s entry
Ficano, C.C., 2013. Business Churn and
the Retail Giant: Establishment Birth and
Death from Wal‐Mart's Entry. Social
science quarterly, 94(1), pp.263-291.
The article will enable
understanding of the
birth and death rate of
small retailers in
Walmart’s presence and
in absence.
Walmart vs Other
Retailers
Brea‐Solís, H., Casadesus‐Masanell, R.
and Grifell‐Tatjé, E., 2015. Business
model evaluation: quantifying Walmart's
sources of advantage. Strategic
Entrepreneurship Journal, 9(1), pp.12-
33.
The review of the
deemed article will
assess in understanding
the reasons associated
with the Walmart’s
success in accordance
with other retailers.
Impact of Walmart on
larger towns
Merriman, D., Persky, J., Davis, J. and
Baiman, R., 2012. The impact of an
urban WalMart store on area businesses:
The Chicago case. Economic
Development Quarterly, 26(4), pp.321-
333.
The article assists in
understanding of the
impact of Walmart in
Urban areas.
Geographical impact Ellickson, P.B. and Grieco, P.L., 2013. The paper discusses the

11WALMART: A RETAIL BULLY
of the Walmart Wal-Mart and the geography of grocery
retailing. Journal of Urban
Economics, 75, pp.1-14.
impact of the subject on
the neighbouring
retailers.
Walmart’s entry in
Indian retail market
Bengale, G.K. and Jadhav, T.D., 2017.
PROSPECTS MORE THAN
PROBLEMS FOR ENTERING OF THE
FDI IN INDIAN RETAIL SECTOR-A
STUDY. International Research Journal
of Multidisciplinary Studies, 3(6).
The review of the
article will assist in
understanding of the
impact of Walmart’s
arrival in a developing
country, taking
accordance of India.
Evidence Critical Viewpoint
The economy of the town that Walmart
enters gets thrown into commotion.
The article has cited evidence to that the
monetary dominance and effective marketing
strategy of Walmart are capable of throwing
the economy of a small town into
commotion. If, it is present than the economy
gets affected by the loss of smaller retailers
and when it leaves, it suffers due to the
problems faced by the consumers which
support the hypothesised statement of the
devised report.
Death Rate of the small retailer in a town is
high in the presence of Walmart.
It is evident from the reviewed article that the
birth rate has also been determined to be