Walmart Case Study

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Introduction of Walmart Wal-Mart was founded by Sam Walton in 1962; it was incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the worlds largest and arguably, the most emulated retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. Wal-Mart operates each store, from the products it stocks, to the front-end equipment that helps speed checkout, with the same philosophy: provide everyday low prices and superior customer service. Lower prices also eliminate the expense of frequent…show more content…
In 2002, Wal-Mart bought 6.1% stake in Seiyu, which formerly belonged to the Saison Group – one of Japan’s most successful conglomerates. With such minimal stake, it may not have been in their capacity to rename the joint venture and hence, the powerful brand name of the world’s best retailer (Kotabe & Helsen, 2009) could not be used. This brand name had the power to draw customers due to the value they delivered. Although the case states that the Japanese customers directly relates the quality of the product to its price. This failure to understand the complex retail culture of Japan was a major setback for Wal-Mart. The multinational retailer tried to increase efficiency with measures like SMART to better predict sales patterns and Retail Link to increase efficiency in inventory management. But this would all have been in vain if they couldn’t draw customers to their store. Another interesting pattern that can be noticed in the case is the relation between sales of grocery and the retail market share. 7-Eleven tops the retail market share chart with 80% of their sales coming from sales of grocery. AEON is not too far behind with 82.2% of its sales hailing from grocery. (Euromonitor International, 2009) This statistic relates to the problem of non-localization of their strategy. Wal-Mart has always been following a global strategy for all its locations and…show more content…
(Alpert & Kamins et al., 2001) This means that the manufacturers, distributors, retailers and customers are very closely connected. Geert Hofstede’s theory on cultural dimensions (1991) can be applied here to interpret that this is a collectivist culture with low power distance. According to the case almost 85% of the retail market is comprised of small, family-run businesses (including department stores, general supermarkets, specialty stores and convenience stores). This proves the highly fragmented market makes it very difficult for international retail chains to penetrate and dig out

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