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Journal of Business Strategy

ISSN : 0275-6668

Article publication date: 16 April 2018

Walmart achieved extraordinary success and growth in its home country before embarking on a strategy of international expansion. While most of Walmart¹s international expansion efforts were successful, the retailer experienced some challenges in Germany and South Korea, exiting both less than ten years after initial entry. In 2016, Walmart announced the closure of 269 stores worldwide. Although most Walmart stores are now outside the USA, the performance of these stores lag their US counterparts. Walmart has not been able to simply export its “Everyday Low Price” approach. It is important to understand cultural differences in the way people shop in addition to understanding the market, economy and laws of various regions around the world.

Design/methodology/approach

Walmart’s successes and missteps in each country are analyzed. The studies looked at each country’s culture, shopping habits and discuss what worked and what did not in each country. The authors hope that managers planning international expansion will learn from the successes and failures of this giant retailer.

Walmart has a significant presence in Mexico, the UK, Brazil, China and Canada. It has been successful in countries where it has adapted the Walmart model to the local market. International expansion for Walmart, along with other retailers, is now being highly impacted by the growth in online shopping. However, the use of technology for shopping is not a homogenous global experience. The increased demand for online retailers suggests that firms slow down (but not stop) brick and mortar international expansion.

Practical implications

Considering the projected growth in online shopping, retailers with global aspirations need to have a strong and sustainable competitive advantage (e.g. products, operations, marketing and brand name reputation) in addition to a clear internationalization plan. The same factors critical to brick and mortar expansion are applicable to online growth. Having a successful, long-term presence in selected countries requires a clear understanding of each country’s infrastructure, demographics, political and economic systems, in addition to cultural awareness and an understanding of shopping practices.

Social implications

The growth of online shopping internationally will also fundamentally alter international expansion for Walmart and other retailers. Interestingly, Chinese shoppers may be leading the trend in online shopping, as nearly 65 percent of Chinese shoppers use their mobile phones for online shopping, are more likely to buy from off-shore online retailers and are more likely to use their mobile phones to compare prices than either Canadian or US shoppers (PWC, 2016). Walmart’s recent acquisition of Jet.com is sending a clear signal that brick and mortar shopping is not the only way to expand internationally.

Originality/value

This original work about Walmart’s growth strategy internationally is unique. This work will be of great value to managers thinking of expanding internationally. The non-embracing of local cultural habits and use of non-local managers is something that can be easily overlooked when thinking of expansion. Serious financial consequences can be easily avoided by being aware of the mistakes that others have made.

• Case studies
• International expansion
• Corporate strategy
• International strategy

Hunt, I. , Watts, A. and Bryant, S.K. (2018), "Walmart’s international expansion: successes and miscalculations", Journal of Business Strategy , Vol. 39 No. 2, pp. 22-29. https://doi.org/10.1108/JBS-02-2017-0013

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Home » Management Case Studies » Case Study: Business Strategy Analysis of Wal-Mart

Case Study: Business Strategy Analysis of Wal-Mart

Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that it is today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward for thirty years. Today, four years after his death, the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind, while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment . The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and ethical responsibilities .

Why is Wal-Mart so Successful ? Is it Good Strategy or Good Strategy Implementation ? In 1962, when Sam Walton opened the first Wal-Mart store in Rogers, Arkansas, no one could have ever predicted the enormous success this small-town merchant would have. Sam Walton’s talent for discount retailing not only made Wal-Mart the world’s largest retailer, but also the world’s number one retailer in sales. Indeed, Wal-Mart was named “Retailer of the Decade” by Discount Store News in 1989, and on several occasions has been included in Fortune’s list of the “10 most admired corporations.” Even with Walton’s death (after a two-year battle with bone cancer) in 1992, Wal-Mart’s sales continue to grow significantly.

Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees (or “associates” as he referred to them), and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1. Customer value and service; 2. Partnership with its associates; 3. Community involvement.

• The Customer — The word “always” can be seen in virtually all of Wal-Mart’s literature. One of Walton’s deepest beliefs was that the customer is always right, and his stores are still driven by this philosophy. When questioned about Wal-Mart’s secrets of success , Walton has been quoted as saying, “It has to do with our desire to exceed our customers’ expectations every hour of every day”.
• The Associates — Walton’s greatest accomplishment was his ability to empower, enrich, and train his employees. He believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. At each of the Wal-Mart stores, signs are displayed which read, “Our People Make the Difference.” Associates regularly make suggestions for cutting costs through their “Yes We Can Sam” program. The sum of the savings generated by the associates actually paid for the construction of a new store in Texas. One of Wal-Mart’s goals was to provide its employees with the appropriate tools to do their jobs efficiently. The technology was not used as a means of replacing existing employees, but to provide them with a means to succeed in the retail market.
• The Community — Wal-Mart’s popularity can be linked to its hometown identity. Walton believed that every customer should be greeted upon entering a store, and that each store should be a reflection of the values of its customers and its community. Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrial development grants.

What are the Key Features of Wal-Mart’s Approach to Implementing the Strategy Put Together by Sam Walton — The key features of Wal-Mart’s approach to implementing the strategy put together by Sam Walton emphasizes building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing , and to build and maintain a reputation for absolute trustworthiness.

Wal-Mart stores operate according to their “Everyday Low Price” philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs which has allowed it to pass on the savings to its customers. Wal-Mart has become a capabilities competitor. It continues to improve upon its key business processes, managing them centrally and investing in them heavily for the long term payback. Wal-Mart has been regarded as an industry leader in testing, adapting, and applying a wide range of cutting-edge merchandising approaches. Walton proved to be a visionary leader and was known for his ability to quickly learn from his competitors’ successes and failures. In fact, the founder of Kmart once claimed that Walton not only copied our concepts, he strengthened them. Sam just took the ball and ran with it.

Wal-Mart has invested heavily in its unique cross-docking inventory system . Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level.

A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market. Information related to sales and inventory is disseminated via its advanced satellite communications system.

Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. The purchasing agents of Wal-Mart are very focused people. Their highest priority is making sure everybody at all times in all cases knows who’s in charge, and it’s Wal-Mart. Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, the company worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited both parties. Wal-Mart built an automated reordering system linking computers between Procter & Gamble (P&G) and its stores and distribution centers. The computer system sends a signal from a store to P&G identifying an item low in stock. It then sends a resupply order, via satellite, to the nearest P&G factory, which then ships the item to a Wal-Mart distribution center or directly to the store. This interaction between Wal-Mart and P&G is a win-win proposition because with better coordination, P&G can lower its costs and pass some of the savings on to Wal-Mart.

Sam Walton received national attention through his “Buy America” policy. Through this plan, Wal-Mart encourages its buyers and merchandise managers to stock stores with American-made products. In a 1993 annual report management stated the program demonstrates a long-standing Wal-Mart commitment to our customers that we will buy American-made products whenever we can if those products deliver the same quality and affordability as their foreign-made counterparts.

Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designed to be environmentally friendly. The store contains environmental education and recycling centers. Wal-Mart has also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economically and furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through these programs, Wal-Mart shows its concern for the community.

Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. This culture, described as “one part Southern Baptist evangelism, one part University of Arkansas Razorback teamwork, and one part IBM hardware” has worked to Wal-Mart’s advantage.

Just how Successful is Wal-Mart? — A forecast of Wal-Mart’s income for the period 1995-2000, considering increases of 30.6% in Net Sales, 27.7% in Operating Expenses, and 52.3% in Interest Debt (a level which is below Wal-Mart’s historically compounded growth rate of 55.6%) indicates that the company should continue to report gains each year until 2000.

Growth on Sales — According to most analysts and company projections, sales should approximate $115 billion by 1996, representing an increase of 30.6% as compared to 1995. If the company continues at this pace, sales should reach $334 billion by the year 2000. The growth on sales that Wal-Mart reported during the 1980s and the beginning of the 1990s will be difficult to repeat, especially considering the ever-changing marketplace in which it competes. In an interview, Bill Fields, President of the Stores Division, said “Wal-Mart is now seeing price pressure from companies that once assiduously avoided taking it on. These include specialty retailers such as Limited, category killers like Home Depot and Circuit City, and catalog companies like Spiegel. I think everybody prices off of Wal-Mart. You’ve got Limited reaching levels we’d thought they’d never get to. The result is that everyday low prices are getting lower”.

In addition, the baby-boomers are reaching their peak earnings years, when financial and personal priorities change. Thus, savings, not spending, will likely take precedence because most baby-boomers are approaching retirement.

Debt Position — Based on Wal-Mart’s position in 1994, which was considered a year of expansion for the company, (Wal-Mart added 103 new discount stores, 38 “Supercenters”, 163 warehouse clubs, and 94,000 new associates) interest debt increased 52.3%. The cost paid by Wal-Mart to finance property plants and equipment forced the company to increase long term debt by 4.6 times during the period 1991-1995. Long term debt for 1995 is $7.9 billion. If Wal-Mart continues its expansion plans based on more debt acquisition at 1994 levels, the company may not attain forecasted gains by as early as 1998.

Operating Expenses — Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. The challenge is how to run more stores with less operating expenses. According to Bill Fields, “. . . the goal is to increase sales per square foot and drive operating costs down yet another notch”. Trends indicate that operating expenses have been growing at a rate of 27.7% in recent years. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses.

Cost of Sales — Cost of sales historically has been equal to the level of sales. If the company continues to take advantage of its buying power, Wal-Mart can expect to lower its cost of sales.

Wal-Mart’s future will depend on how well the company manages its expansion plans. For the coming years, the company will need to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operating expenses.

What Problems are Ahead for Wal-Mart? What Risks? — Throughout the 1980s, Wal-Mart’s strategic intent was to unseat industry leaders Sears and Kmart, and become the largest retailer in the U.S. Wal-Mart accomplished this goal in 1991. But Wal-Mart’s current strong competitive position and its past rapid growth performance can’t guarantee that the company will remain as the industry leader or maintain its strong business position in the future. Carol Farmer, a retail consultant, told the Wall Street Journal that, “One little bad thing can wipe out lots of good things”. Every move in its business operation ought to be well thought-out and executed.

Wal-Mart needs to address two major areas in order to maintain or to capture an even stronger long term business position: 1) Single-business strategy — Wal-Mart’s success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages . Given its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to “putting all of a firm’s eggs in one industry basket”. In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance.

Also, if Wal-Mart continues to follow Sam Walton’s vision of expansion, Wal-Mart will reach its peak in the very near future. When it does, its growth will start to slow down and the company will need to turn its strategic attention to diversification for future growth .

2) Social responsibility — Retail stores can compete on several bases: service, price, exclusivity, quality, and fashion. Wal-Mart has been extremely successful in competing in the retail industry by combining service, price, and quality. However, other merchants may object to Wal-Mart’s entry into their community. Because of its ability to out-price smaller competitors, Wal-Mart’s stores threaten smaller neighborhood stores which can only survive if they offer merchandise or services unavailable anywhere else. This makes it very hard for small businesses, such as “mom-and-pop” enterprises, to survive. They, therefore, fight to keep Wal-Mart from entering their locales. Numerous studies conducted in different states both support and criticize Wal-Mart. Nevertheless, Wal-Mart did drive local merchants out of business when it opened up stores in the same neighborhood. As a result, more and more rural communities are waging war against Wal-Mart’s entrance into their market. Besides protesting and signing petitions to attempt to stop Wal-Mart’s entry into their community, the opposition’s efforts can even be found on The Internet. Gig Harbor, a small town in Washington, recently started a World Wide Web page entitled “Us Against the Wal.” The town’s neighborhood association promised that they “will fight them [Wal-Mart] tooth and nail”.

The increasing opposition indicates that the road ahead for Wal-Mart may not be as smooth as Wal-Mart’s annual report would entail. This requires Wal-Mart to rethink its expansion strategy since it would not be profitable to operate in an unfriendly community.

How Big Will Wal-Mart be in Five Years if all Continues to go Well? — Before he died, Sam Walton expressed his belief that by the year 2000 Wal-Mart should be able to double the number of stores to about 3,000 and to reach sales of $125 billion annually. Walton predicted that the four biggest sources of growth potential would be the following: 1. expanding into states where it had no stores; 2. continuing to saturate its current markets with new stores; 3. perfecting the Supercenter format to expand Wal-Mart’s retailing reach into the grocery and supermarket arena — a market with annual sales of about $375 billion; 4. moving into international markets.

Wal-Mart Supercenters represent leveraging on customer loyalty and procurement muscle in order to create a new domestic growth vehicle for the company. With few locations left in the U.S. to put a new Sam’s Club or traditional Wal-Mart, the Supercenter division has emerged as the domestic vehicle for taking Wal-Mart to $100 billion in sales. Before the Supercenter, Walton experimented with a massive “Hypermart”, encompassing more than 230,000 square feet in size. The idea failed. Customers complained that the produce was not fresh or well-presented and that it was difficult to find things in a store so big that inventory clerks had to wear roller skates. One of Walton’s philosophies was that traveling on the road to success required failing at times.

As a result of the unsuccessful experiment, Walton launched a revised concept: the Supercenter, a combination discount and grocery store that was smaller than the Hypermart. The Supercenter was intended to give Wal-Mart improved drawing power in its existing markets by providing a one-stop shopping destination. Supercenters would have the full array of general merchandise found in traditional Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and other specialty shops like hair salons, portrait studios, dry cleaners, and optical wear departments. Supercenters would measure 125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible.

Walton’s prediction was right on target. The Supercenter division more than doubled in size during 1993, then doubled again in 1994. Supercenters, once thought of as risky because of slim profit margins on the food side, will most likely make Wal-Mart the nation’s largest grocery retailer within the next five to seven years.

Expanding overseas, Wal-Mart moved into the international market in 1991 through a joint-venture partnership with CIFRA S.A. de C.V., Mexico’s leading retailer. Since then the company has entered Canada, Hong Kong, mainland China, Puerto Rico, Argentina, and Brazil. The Wal-Mart International Division was officially formed in 1994 to manage the company’s international growth. By the year 2000, analysts expect Wal-Mart to be a huge international retailer, with numerous locations in South America, Europe, and Asia.

Conclusion — The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognize the strong implications of a “buyers’ market”. Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. Therefore, it is incumbent upon management to define their target market and direct their energies toward solving that specific market’s problems. Technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industry leader well into the next century.

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Walmart around the World

• Format: Print
• | Language: English
• | Pages: 11

About The Author

Juan Alcacer

Related work.

• February 2014
• Faculty Research
• January 2022

Walmart Goes Global (A)

Walmart goes global (b).

• Walmart around the World  By: Juan Alcácer
• Walmart around the World  By: Juan Alcácer, Abhishek Agrawal and Harshit Vaish
• Walmart Goes Global (A)  By: Juan Alcácer
• Walmart Goes Global (B)  By: Juan Alcácer

Wal-Mart’s Global Expansion: Challenges and Perspectives

• To find inspiration for your paper and overcome writer’s block
• As a source of information (ensure proper referencing)
• As a template for you assignment

Walmart is one of the largest world retailers. Most of Walmart¹s global expansion efforts were successful, however the company faced some challenges in the Asian markets. Below, we will discuss the challenges faced by Walmart in Asia and the retailer’s perspectives on this market.

Introduction

Expansion problems, chances of wal-mart success in asia, cultural differences, the state set of laws.

Wal-Mart is the leading global retailer. It started its operations with nine nations in South America, Asia, and Europe. Currently, the company is conducting its global trade across 27 countries. In fact, its revenue was in excess of USD $400 billion for the fiscal 2012.

The expansion has prepared the company for entry into other new markets. However, globalization is continually attracting an array of investors into the retail market industry. Surprisingly, many renowned retailers have failed in particular global markets sighting varied reasons. Usually, the reasons include legal, regulatory, cultural and competition.

The company has been experiencing significant challenges in expanding its operations in Asia, specifically in China and India. This attributed to part of the many business and cultural challenges a global company can face when attempting to expand operations into a foreign country.

This study explores Wal-Mart global expansion and the challenges it faces in this endeavor. The research also examines whether the company is likely to succeed to penetrate the Asian market with the retail model it uses in the United States market.

Wal-Mart is the largest retail company in the United States. In fact, the financial endowment of the company is recognized globally. It is within the beliefs of the company that it will expand globally with revenues rising above that of the US market (Molin 2004, p.1). Armed with the belief, the company has been exploring different markets including the Asian retail market.

However, the company seems to have failed to appreciate that success in one country does not guarantee similar success in another. The reality forced the company to open the International Division within its organizational structure. The department was charged with managing the international growth opportunities.

Primarily, the division was founded to create a fallback position for the company in case the US market slowed down. The division has facilitated the global penetration by the company in the emerging and existing markets.

The division has ensured that the company acquires a share in prime markets such as China. The stores the company operates are not all newly established. Some are attained through joint ventures as well as acquisitions.

In Asia, the company opened its first store in China in 1996 by establishing Sam’s Club and a supercenter in Shenzhen (Spulber 2007, p.14). At this time, the company boasted that it had entered the hub of retail market referring to Shenzhen as “the forerunner of the country’s financial reform and top growing coastal metropolis.” The company has ever since expanded to other Asian cities.

The increase in the number of outlets in the Asian countries has been in the company’s strategic plan. The company top management has consistently informed the world on the importance of the company’s expansion plans in the international market.

They indicate that in the future, more than a third of the company’s growth shall originate from outside the saturating US market (Jones 1998, p.1). The international expansion by Wal-Mart is hence a long-term goal for developing the dominance in the global retail market.

There are many challenges that face the company in the expansion effort ranging from government regulations to culture and competition. The company faces external as well as internal problems. The external problems are amplified in the company’s expansion efforts. Internal problems entail the company viewing itself as unbeatable via competition hence ignore smaller competitors as was the case with Wal-Mart in India.

The company ignored small traders operating roadside stores. The management later realized that gaining market share held by the small traders was a huge challenge. The small traders enjoy the support of the local community who detest western companies.

Wal-Mart uses the growth short cut of joint ventures as well as acquisition in Asia. The approach is employed since most government authorities are aware of the problems the company is likely to present when given express autonomy to operate in their countries.

The company has previously been accused of low wages, gender discrimination, being strict with suppliers, and destroying small local business due to its financial endowment. In this regard, countries such as India and South Korea ensure that they have strict regulations that discourage foreign investors such as Wal-Mart.

The perception regarding Wal-Mart is likely to affect its operations in Asia. The company is viewed as a representation of the western governments and ideologies seeking to modify the eastern culture. Unless the company reevaluates its international expansion strategy, it will not be easy for the company to succeed in the Asian market.

The international business arena is always plagued by cultural difference challenges. This is one of Wal-Mart’s biggest hurdles in its attempt to globalize. In the Asian market, the local communities meet the company with resistance. To start with, the company is seen as encroaching and grabbing the business opportunities for the local smaller traders (Basker 2005a, p. 176).

In some cases, the local business communities pressurize the authorities to deny the company the permit to operate. The communities seek to protect their interests by dragging in the community. The difference in culture is also a factor that the company has to contend with when attempting to open new stores in the Asian retail market.

Wal-Mart’s International Division is responsible for conducting research in the prospective markets. It has been successful in this front. However, it has failed to establish the consumer preferences that are driven by culture in some markets such as a majority of the Asian countries.

The company has various conflicts with clients forcing it to approve amendments that will not see it shut down its stores. In the Asian context, Wal-Mart faced challenges upon its entry into China. Small-scale traders with the owner as the attendant typically sell retail items similar to those stocked by Wal-Mart. The locals are familiar with the owner and interact freely.

These stores are usually packed, noisy, and dirty. However, they are operating at low prices. When Wal-Mart attempted to introduce the concept of hypermarket, offering clean outlets, well spaced, and sales for the people to attend to the customers, the consumers felt uneasy.

They were accustomed to doing their shopping in absolute privacy where they only dealt with the owner one person at a time. Wal-Mart’s approach required the consumers to alter the shopping and purchasing habits and anticipations when buying goods from the stores.

In India, social relationships play a central role in financial deals (Padmanabhan 2012, p. 1). Even with globalization, this aspect still holds in the India communities. However, Wal-Mart has gradually changed the attitude of the community towards westernization. It has managed to capture a significant customer base. Amazingly, the small traditional shops that mark India’s waysides still exist (Kalhan 2007, p. 2065).

They continue to control the retail market. In fact, it has been suggested by researchers that these roadside stores will continue dominating and control 85 percent of the domestic market (The Economist 2008, p. 1). The roadside shops may be a little larger than a cabinet but the local consumers prefer them. It is suggested that this occurred due to the poverty that pushes the locals.

The locals establish personal relationships with the storeowners so that they may obtain goods on credit when they do not have cash. Since the disposable income levels may not grow in the near future, Hanna (2004) suggests that the large retail companies should abandon their contemporary strategies. The chains should target at becoming the neighborhood store (Hanna 2004, p. 1).

When conducting global trade, it becomes inevitable to take care of the state policies. In the US, Wal-Mart is a powerful investor. However, in other countries, it is just an overseas investor seeking to exploit the financial and human resources of the country. This challenge became apparent when the company entered China. The country is densely populated with a potentially large market with more than 170 metropolises.

The company sought to exploit the market (Jia 2008, p.1265). However, the stringent and restrictive regulations of the Communist government curtailed the company’s endeavors. The Chinese government boxed the company to certain counties to rein in competition. The company is yet to open an outlet in a thriving city (Groeber 2002, p.1).

The federal law of India prohibits global retailers from directly investing into the Indian economy. Wal-Mart has been a victim of the regulations forcing it to enter the huge market through joint ventures. The Indian government is relatively young in terms of policy infrastructure. The community norms are deeply embedded onto the society’s mindset.

The policymakers who are the investors possess substantial influence in the decision-making processes. They easily guide the creation of legislations. Since they are the owners of the small trade stores, they ensure that the perceived notion of encroachment on business by international companies seeps through the government structures.

This study has explored the internationalization of business in the increasingly competitive global economy. In order to explore the success and challenges in the global business arena, this study has examined the operations of Wal-Mart in different countries to establish the challenges that companies are likely to face while going abroad.

It is apparent that companies willing to go global must be prepared to deal with governments in terms of regulations, as well as communities in terms of culture and other players such as competitors in the local business industry. Besides, it is evident that foreign countries aiming to invest in Asia face stiffer challenges than those faced by companies aiming to invest in other global locations.

Basker, E 2005a, “Job creation or destruction? Labor market effects of Wal-Mart expansion”, Review of Economic Statistics , vol. 87 no. 1, pp. 174–183.

Groeber, J 2002, “A new frontier”, National Real Estate Investor, vol. 44 no. 11. Web.

Hanna, J 2004, Ground-floor opportunities for retail in India, Harvard Business School: Working Knowledge. Web.

Jia, P 2008, “What happens when Wal-Mart comes to town: an empirical analysis of the discount retailing industry”, Econometrica , vol.76 no.6, pp. 1263–1316.

Jones, Y 1998, “ The biggest of the big ”, Forbes 500s Annual Directory . Web.

Kalhan, A 2007, “Impact of malls on small shops and hawkers”, Economic and Political Weekly , vol. 42 no. 22, pp. 2063–2066.

Molin, D 2004, A bullish Wal-Mart: targeting new countries, smaller formats . Web.

Padmanabhan, M 2012, Wal-Mart’s struggles in India: how institutional contexts can limit foreign entry . Web.

Spulber, D 2007, Global competitive strategy , Cambridge University Press, Cambridge.

The Economist 2008, Unshackling the chain stores . Web.

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Walmart Outlines Growth Strategy, Unveils Next Generation Supply Chain at 2023 Investment Community Meeting

Provides details on investment approach, centered around people and leveraging a state-of-the-art integrated supply chain network, to deliver a leading omnichannel experience globally and drive strong top-line growth, margin expansion and higher return on investment affirms fy24 guidance and commitment to financial framework of 4% sales growth and 4%+ operating income growth over the next 3-5 years.

April 4, 2023

Press Center

TAMPA, Fla., April 4, 2023 — Walmart Inc. (NYSE: WMT) is kicking off its two-day 2023 Investment Community meeting, where leadership will highlight how the company is investing to strengthen its business through its people and an unparalleled, next generation supply chain network of stores, clubs, and fulfillment centers and driving future global growth opportunities across its omnichannel ecosystem and high value initiatives. The company is also reiterating its first quarter and full-year guidance for fiscal year 2024.

“We are in a unique position to serve our customers and members however they want to shop, which will fuel continued growth,” said Doug McMillon, Walmart president and chief executive officer. “As we grow, we will improve our operating margin through productivity advancements and our category and business mix, and drive returns through operating margin expansion and capital prioritization.”

A People-Led, Tech-Powered Omnichannel Retailer

As part of the meeting, the company is highlighting its purpose, unique culture and the importance of its associates and unveiling its plan for a new more connected and automated supply chain which will improve the experience for its customers and associates and simultaneously increase productivity.

Through its extensive work, Walmart is reengineering its supply chain to fulfill customer needs with a more intelligent and connected omnichannel network that is enabled by greater use of data, more intelligent software and automation. The outcome improves in-stock, inventory accuracy and flow whether customers shop in stores, pickup, or have a delivery.

Walmart showcased its supply chain innovation Tuesday at its Brooksville, Fla., regional distribution center, as one piece of how the company is building a scaled system of supply chain capabilities that uses a combination of data, software and robotics. Through automation and state-of-the-art technology, the company illustrated how the increased item storage allows the distribution center to provide a more consistent, predictable and higher quality delivery service to stores and customers and react more quickly to customer demand.

Stores operate as a place to shop and as fulfillment centers and delivery stations. Distribution and fulfillment centers hold a mix of items, from suppliers and sellers. This allows Walmart to use its existing assets more flexibly and efficiently for new ways of working.

By the end of Fiscal Year 2026, Walmart believes roughly 65% of stores will be serviced by automation, approximately 55% of the fulfillment center volume will move through automated facilities, and unit cost averages could improve by approximately 20%.

As the changes are implemented across the business, one of the outcomes is roles that require less physical labor but have a higher rate of pay. Over time, the company anticipates increased throughput per person, due to the automation while maintaining or even increasing its number of associates as new roles are created.

“It all starts with our associates,” McMillon said. “We are a people-led, tech-powered omnichannel retailer. As it relates to being people-led, it’s about purpose, values, culture, opportunity and belonging. We serve our associates by creating opportunities. Opportunities that turn jobs into careers. We help bring dignity to work by enabling them to see how they’re serving others, as part of a team, and helping them achieve their potential. And as we serve them, they serve our customers and members well…they make the difference.”

Financial Framework

Walmart will outline how the company expects its growth investments to transform its financial profile, centering on three key building blocks: sales growth from its omni-channel business model; diversifying earnings streams through improved category and business mix; and scaling proven, high-return investments that drive operating leverage and improve incremental operating margins.

“We believe that we have the building blocks in place to help define the next chapter of retail and do so while driving strong growth and shareholder returns,” said John David Rainey, Walmart executive vice president and chief financial officer. “Looking at where we are today, we believe that approximately 4% sales growth, and growing operating income at a faster rate, are still the appropriate targets for our business over the next 3-5 years. The investments we’ve made have positioned us well and stand to generate steady and sustained growth at higher margins. Achieving our targeted 4% sales growth over the next five years would add more than $130 billion of sales on top of our roughly $600 billion base today. On top of that, we think the opportunity for operating income growth over the next 3-5 years could be better than what we've outlined.”

Walmart’s multi-year growth outlook assumes all three business segments contribute to its mid-single-digit sales growth target. The company is strengthening its global omni-channel ecosystem and scaling higher-margin value streams that serve customers and businesses and are natural connectors to its omnichannel retail business. This includes advertising, data, memberships and marketplace, all initiatives that will help deliver a better customer and member experience while driving stronger returns.

Fiscal 2024 Q1 and Full-Year Guidance

The company reiterates its FY 2024 Q1 and full year guidance:

Fiscal 2024 Q1 Guidance:

Fiscal 2024 Full-Year Guidance:

Event Webcast

Formal remarks will be video webcast at 8 a.m. EDT on the company’s website . A replay of the webcast will be available on the company’s website following the event.

About Walmart Walmart Inc. (NYSE: WMT) is a people-led, tech-powered omnichannel retailer helping people save money and live better - anytime and anywhere - in stores, online, and through their mobile devices. Each week, approximately 240 million customers and members visit more than 10,500 stores and numerous eCommerce websites in 20 countries. With fiscal year 2023 revenue of $611 billion, Walmart employs approximately 2.1 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy, and employment opportunity. Additional information about Walmart can be found by visiting corporate.walmart.com , on Facebook at facebook.com/walmart , on Twitter at twitter.com/walmart , and on LinkedIn at linkedin.com/company/walmart .

Forward Looking Statements This release and related management commentary contains statements or may include or may incorporate by reference Walmart management’s guidance regarding adjusted earnings per share, consolidated net sales, consolidated operating income and consolidated adjusted operating income, consolidated operating expense, net interest expenses, noncontrolling interest, capital expenditures, share repurchases, Walmart’s effective tax rate for the fiscal year ending January 31, 2024, and comparable sales, among other items. Walmart believes such statements may be deemed to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Act") and are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the Act as well as protections afforded by other federal securities laws. These forward-looking statements can be identified by their use of words or phrases such as “anticipate,” “could,” “could be,” “believe,” “expect,” “forecast,” “plan,” “projected,” “will be” “will improve,” or similar other words or phrases. Statements of our guidance, projections, estimates, expectations, plans, and objectives for the first quarter and remainder of FY24 and for subsequent fiscal years in the presentations are forward-looking statements. Assumptions on which such forward-looking statements are based are also forward-looking statements. Such forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our segment's or business’, economic performance or results of operations for future periods or as of future dates or events or developments that may occur in the future or discuss our plans, objectives or goals. Our actual results may differ materially from those expressed in or implied by any of these forward-looking statements as a result of changes in circumstances, assumptions not being realized or other risks, uncertainties and factors including: capital markets and business conditions; trends and events around the world and in the markets in which we operate; currency exchange rate fluctuations, changes in market interest rates and market levels of wages; changes in the size of various markets, including eCommerce markets; unemployment levels; inflation or deflation, generally and in particular product categories; consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels and demand for certain merchandise; the effectiveness of the implementation and operation of our strategies, plans, programs and initiatives; unexpected changes in our objectives and plans; the impact of acquisitions, investments, divestitures, and other strategic decisions; our ability to successfully integrate acquired businesses; changes in the trading prices or fair value of certain equity investments we hold; initiatives of competitors, competitors' entry into and expansion in our markets, and competitive pressures; customer traffic and average transactions in our stores and clubs and on our eCommerce websites; the mix of merchandise we sell, the cost of goods we sell and the shrinkage we experience; our gross profit margins; the financial performance of Walmart and each of its segments, including the amounts of our cash flow during various periods; the amount of our net sales and operating expenses denominated in the U.S. dollar and various foreign currencies; commodity prices and the price of gasoline and diesel fuel; challenges with our supply chain, including disruptions and issues relating to inventory management; disruptions in seasonal buying patterns; the availability of goods from suppliers and the cost of goods acquired from suppliers; our ability to respond to changing trends in consumer shopping habits; consumer acceptance of and response to our stores, clubs, eCommerce platforms, programs, merchandise offerings and delivery methods; cyber security events affecting us and related costs and impact to the business; developments in, outcomes of, and costs incurred in legal or regulatory proceedings to which we are a party or are subject, and the liabilities, obligations and expenses, if any, that we may incur in connection therewith; casualty and accident related costs and insurance costs; the turnover in our workforce and labor costs, including healthcare and other benefit costs; our effective tax rate and the factors affecting our effective tax rate, including assessments of certain tax contingencies, valuation allowances, changes in law, administrative audit outcomes, impact of discrete items and the mix of earnings between the U.S. and Walmart's international operations; changes in existing tax, labor and other laws and regulations and changes in tax rates including the enactment of laws and the adoption and interpretation of administrative rules and regulations; the imposition of new taxes on imports, new tariffs and changes in existing tariff rates; the imposition of new trade restrictions and changes in existing trade restrictions; adoption or creation of new, and modification of existing, governmental policies, programs, initiatives and actions in the markets in which Walmart operates and elsewhere and actions with respect to such policies, programs and initiatives; changes in accounting estimates or judgments; the level of public assistance payments; natural disasters, changes in climate, geopolitical events, global health epidemics or pandemics (such as the COVID-19 pandemic) and catastrophic events; and changes in generally accepted accounting principles in the United States. Our most recent annual report on Form 10-K filed with the SEC discusses other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in the release and related management commentary. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this release. Walmart cannot assure you that the results reflected in or implied by any forward-looking statement will be realized or, even if substantially realized, that those results will have the forecasted or expected consequences and effects for or on our operations or financial performance. The forward-looking statements made today are as of the date of this release. Walmart undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

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Case study: from local store to global giant, analyzing walmart’s growth & expansion.

From a small shop in one town to a global giant, Walmart has changed remarkably. 

Walmart debuted as a small cheap store in Arkansas, USA, in 1962. It grew by putting a focus on low prices and making shopping easy. 

With constant new ideas and a strong supply chain strategy, the company expanded across the US and worldwide, becoming a global star in the retail industry. 

Walmart now has stores in many countries and serves millions of customers around the world.

Therefore, it is important to take a look at Walmart’s growth. It tells us a lot about the strategies and tactics that led to its success, which can teach entrepreneurs and companies a lot.

In this article, we will analyze this global giant in detail. 

Overview of Walmart’s domestic expansion

Expanding across the us: walmart’s rapid growth & dominance in the country.

The swift expansion of Walmart shops across the United States was an important step in the company’s growth. 

By adding new stores in cities and rural areas in an organized way, Walmart brought cheap products and easy shopping to many places and strengthened its position as the biggest store in the country.

Transforming retail: Walmart’s unique approach redefining the industry

Walmart’s use of new ideas and methods in retailing changed the business as a whole. 

From coming up with the idea of “everyday low prices” to implementing advanced inventory management systems, the company constantly pushed the limits. 

It set new standards for efficiency, customer satisfaction, and technology integration.

In the end, it shaped the future of retail.

Low-price strategy impacting the competitors & local economies

Walmart’s low-price approach had a big effect on its rivals and the local economies. 

The brand changed how prices were set by using its large supply chain and negotiating power. 

This made competitors change their strategies. 

Overview of Walmart’s international expansion

Walmart’s global success: tailoring products to local needs & mastering the supply chain.

Walmart has a strong footprint in many countries because it carefully studied what local customers wanted and changed its products to meet their needs. 

It also used its economies of scale and expertise in the supply chain to enter new markets successfully.

Walmart’s expansion in China

Walmart China transformed its supply chain in a big way to make operations more efficient and meet changing customer needs. 

As part of the change, new technologies and data analytics were used to improve inventory management, streamline logistics, and make it easier to track down products. 

Reading the Walmart case study solution helps you get valuable insights into Walmart’s success on a broader scale. 

It provides a detailed examination of the specific strategies, innovations, and challenges Walmart China faced during its supply chain transformation. 

Understanding the factors that led to the transformation’s success helps you appreciate how Walmart manages its supply chain, operates efficiently, and satisfies customers. 

This case solution helps you understand how Walmart’s supply chain initiatives contributed to its success. It serves as a valuable resource for studying and learning from their achievements.

Caseprofessors.com is a valuable resource for gaining a comprehensive understanding of the world’s renowned brands through its extensive collection of case study solutions. 

By studying these case studies, you can dive deep into these brands’ strategies, challenges, and successes. In this way, you can grasp the intricacies of their operations and market positioning. 

To enhance your knowledge and insights, visit caseprofessors.com today and unlock a wealth of valuable information that can fuel your understanding of successful brands. 

From local hero to the global player: Walmart’s journey in overcoming cultural differences & competitive forces

Walmart ran into a number of problems as it went global. 

There were cultural differences, complicated rules, and competition from widely recognized local stars. 

To get a foothold in new markets, Walmart faced challenges like adapting to different customer tastes, navigating complex supply lines, and building relationships with local stakeholders.

Walmart used a few key strategies to adapt to different foreign markets. 

This meant tailoring the products to local tastes, forming partnerships with local sellers, and hiring local people to learn about the culture and figure out how to work within the rules.

 Through corporate social responsibility programs, Walmart also worked hard to build strong relationships with local communities. 

This helped the company become more popular and successful in foreign markets.

Future prospects of Walmart

Walmart’s future looks bright as long as the company keeps coming up with new ideas and changing the market. 

E-commerce is a big focus, and Walmart has been putting a lot of money into it to fight with online giants. 

Walmart is in a good situation to get a big share of the growing e-commerce market. It has a strong online platform and good delivery systems.

Walmart also uses new technologies, such as artificial intelligence and data analytics, to improve the customer experience and make processes run more smoothly. 

Using these technologies, the business can personalize its products and services, improve how it manages its stock, and make decisions based on data to be more efficient and make more money.

The company wants to show that it cares about long-term sustainability by reducing its carbon impact, promoting sustainable sourcing practices, and investing in renewable energy.

Walmart’s plan for future growth still depends heavily on going global. 

The brand keeps looking for chances in new markets, especially in emerging economies, where growing disposable incomes and changing consumer tastes offer a lot of room for growth.

The case study of Walmart’s growth and development shows the amazing journey of a local store becoming a global giant. 

Walmart has solidified its position as a retail leader by taking strategic steps, adapting to different markets, and using new technologies. 

You can learn from its key strategies to grow your business. 

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Question: CASE STUDYWALMART’S GLOBAL EXPANSIONWal Mart was established in Arkansas in USA in 1962 by Sam Walton. Today, it is America’s biggest retailer, and in fact the largest retailer of the world. It differentiated itself from the competition through the HR practices and efficient distribution system. Employees at Wal-Mart are called associates and were asked to

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