Wal Mart Case Essay

547 words - 3 pages

1. Did Wal-Mart overestimate the transferability of its FSAs?
Wal-Mart’s expansion to the German Market, did not develop as expected. The unique characteristics of the German Market hindered Wal-Mart’s successful model and the company was not sufficiently prepared to cope with all the liabilities of foreignness it faced in Germany. For example, it was impossible to provide EDLP due to the small size of Wal-Mart Germany, its inability to expand rapidly and its illegally judged loss-leader strategy. Wal-Mart’s secondly transferred FSA, its so-called ‘exceptional service’, was also overestimated, due to the fact that several of Wal-Mart’s basic operating principles were only partially compatible with German stakeholders expectations.
To conclude, Wal-Mart overestimated the ease of transferring its FSA’s into the German market, without ...view middle of the document...

Secondly, Wal-Mart started to focus on locations with a greater opportunity to growth, e.g. India, Central and South America. In 2009, Wal-Mart entered the Indian market by partnering with Bharti Enterprises and started to meet the local preferences, by filling shelf space with familiar products for the local population. To ensure that the quality and quantity of demand can be met, the company has also invested for years building relationships with suppliers and farmers.
In conclusion, Wal-Mart has made it faults by overestimating its FSA’s in the past, but the company is successfully moving forward with changing its system to ease transferring its FSA’s for future international expansion.
2. Can you provide an update on Wal-Mart’s international expansion, using materials available on the Web?
In the last couple of years, Wal-Mart went further with its international expansion. Between 2010 and 2015 the company gained an international growth rate of 9,8%, while the growth for the domestic market was 2,7%.
In 2013, Wal-Mart opened several shops in Chile, India and South Africa. However it pulled out of Russian market and scaled back its expansion plans in Mexico because of its uncertain environment.
Recently, Wal-Mart stepped up its expansion efforts in Canada. The company announced it was looking at 29 supercenters projects , expansion in existing stores and its distribution network and e-commerce investments. In January 2016, Wal-Mart strives to have 396 stores in Canada.
Furthermore, Wal-Mart has also plans to expand in India by looking for another local partner to increase its market share in the retail segment.
Due to the uncertain environment, Walmart scaled back its expansion plans in Mexico.

[ 1 ]. http://marketrealist.com/2015/02/walmart-looking-growth-international-markets/

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