Question

Identify the challenges Walmart need to overcome affecting their implementation of international strategy.

Please write in your own words. Min 250 nd Max 400 Words.

Answer 1

The following are the challenges that walmart faces in its implementation of international strategy-

· Infrastructure challenges- Many other countries, especially developing countries, do not have a good and vast infrastructure like the US or Europe. This means that supply chain must be adjusted accordingly- especially for consumables and groceries. If it takes 3 days for fruits to reach Indian city of Mumbai from the farms in the state of Punjab, Walmart must reduce the same amount of days from the shelf life. That is a constraint on profitability.

· Cultural Issues- Not all countries have the US culture of buying groceries and all other items in one go for a month. Hence in US people prefer that they find all their items in one place. This results in requirement of huge stores with everything under the sun being stocked. This is not the case everywhere. People may prefer to buy grocery from one place but electronics from other. Such cultural preference must be kept in mind before opening or designing stores and strategy.

· Legal challenges- Many countries have different laws regarding investments in retail sector, laws regulating working conditions, minimum wages, permits to be taken and many more issues. Individual states and cities in the country may have their own laws to protect small stores from predatory pricing etc. Then there might be unions too. Overall, the legal structure of country may prevent/encourage/discourage walmart from being there. These also must be taken into account.

· Future- Not all countries are growing at the same pace. Not all countries have a population big enough to support a whole new big business being built. Not all countries may have enough per capita income to support that either. So walmart must keep in mind the future prospects- in terms of growth and prosperity, that a country might have. This business requires huge investment and its not easy to get out easily without huge sunk costs. So, to remain in business in the long term, walmart must look at the social, political and economical future of the country before entering.

The above are some of the challenges that Walmart must overcome in its international strategy.