![]() ![]() Other Competitors of Walmart in Chile included Home Depot and JC Penney. Walmart had many competitors such as Zellers in Canada, Target, Amazon, Costco, Best Buy etc. Threats: According to the case, the NY Times said that in Mexico Walmart’s executives in charge of real estate for the stores bribed government officials in Mexico which is a huge violation of the US Foreign Corrupt Practices Act. Walmart also has an opportunity to improve the quality of its products. Opportunities: Walmart has had huge opportunities to expand globally in other countries by acquiring companies, forming joint ventures or through a natural/organic growth. However, in Africa Walmart’s sales have been low due to issues like lack of proper infrastructure and corruption. Walmart expanded in African countries as well, mostly in South Africa. Another weakness was that store managers were given more freedom, but this was counterintuitive as they used their freedom to attack the company employees forcing Walmart to centralize its operations. Instead, in China, Walmart heavily focused on high class differentiated goods that appealed to the middle class, but due to low sales went back to low cost leadership. Walmart’s US strategy of low cost leadership did not work in China. Chinese consumers also made more trips to the grocery store, but bought less on each trip, so less sales per trip. In the Chinese market the retail market was very fragmented and there were many more small mom and pop stores to compete against Walmart compared to the US. Products included golf clubs and baseball gloves which is an American sport so the company was not profitable in Brazil. For example, the product mix Walmart offered was not tailored to what consumers wanted in Brazil because of cultural differences. In Brazil, Walmart was slow to adapt to the local tastes and culture of Brazil. Walmart in Mexico had US style large parking lots where low income customers would afford to only take buses. Walmart also uses its US style methods globally, which might not work for all countries. It also faces huge competition with other companies who value product differentiation and upscale products instead of low cost products. Weakness: Since it uses a low cost strategy, it has low profit margins which might lead to losses so it has to depend on larger volumes of sales. Walmart offers a diversified line of products from furniture, consumer electronics, clothes, groceries, pet supplies and much more. This supply chain is efficient because of robust distribution methods and advanced automated technology. ![]() Also, Walmart has an efficient supply chain. Strengths: It has globally expanded to more than 30 countries. Walmart is technologically succeeding with robotic equipment and automation processes, which they expand globally as well. On a legal aspect, Walmart is subject to regulations and laws in different countries it has entered. Also, more consumers are shopping online now so societal trends such as online shopping and health conscious customers represent changes to Walmarts socio-cultural sector. All these factors contributed to Walmart leaving the German market. ![]() For example it was not right in Germany when employees smiled at customers or helped them bag their groceries like they do in the US. Since Walmart is so global, it has faced many cultural differences with its products and its values/manners in other countries such as Germany. These social factors are company culture, product mix based on customer preferences and lifestyle, and proper etiquette and behavior in stores. Unfortunately, since Walmart is so global, if there is a recession in any country, it can affect the demand for Walmart’s products. Walmart uses a cost leadership strategy in the US and in other countries- it has everyday low prices which offers convenience and operational efficiency. Walmart has the EDLP strategy- where it offers lower prices as a competitive advantage. Walmarts ventures in China were mostly partnerships since regulations permitted foreign retailers to have joint ventures with local partners in order to conduct business. According to the case, NAFTA, North American Free Trade Agreement created a trade bloc with US, Canada and Mexico and opened up the Mexican economy which created price wars to occur between Walmart and smaller retail companies in Mexico. If Walmart wants to expand globally, political stability in foreign countries is vital. There are political factors associated with Walmart. In order to globally expand it has taken part in joint ventures, acquisitions, and natural/organic growth. Walmart is a huge international company and has entered more than 30 countries. According to the case it had sales that increased 15% over 2011, and operating income grew 10% to reach 6.2 billion dollars. Walmart International has had net sales of $125.9 billion in 2012, making it the world’s third-largest retailer (behind Walmart U.S.
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