In: Operations Management
Walmart company research project.
what's Walmart development , milestone's end contingency / exit
plan ? ,explain related research.
Walmart is a private limited company that operates within the services sector. Since its establishment in 1962, Walmart has been focused on impacting the lives of consumers positively. It is estimated that the firm serves more than 200 million consumers every week through mobile devices, online and through retail outlets. In an effort to market its products to a large number of customers, the firm has adopted internationalization strategy.
Currently, Walmart operates in 27 different countries under 69 banners. Three quarters of its operations in the international market are under different banner other than Walmart. The firm has managed to develop a strong human resource base of 2.2 million worldwide. In 2012, the firm’s sales amounted to $444 (Walmart para. 1).
In an effort to attain its profit maximization objective, Walmart deals with a wide range of consumer products such as general merchandise. The firm also deals with provision of a wide range of services. In the international market, Walmart offers a wide range of generic products and household products. The firm has achieved this through incorporation of the concept of product diversification.
The wide range of products and services that the firm deals with have significantly contributed towards its financial success. The objective of this paper is to conduct a comprehensive analysis on Walmart’s operations in the international market. This is attained by identifying what motivated the firm to enter into the international market, the challenges faced and the degree of success it has attained. The paper also illustrates a number of recommendations on what the firm could have done differently in order to improve its performance.
International market entry
Entering the international market is one of the ways through which
firms can achieve their profit maximization objective. However,
firms face major challenges in their internationalization strategy.
One of the major sources of these challenges is associated the
business risk in the host country. Consequently, it is paramount
for a firm to conduct a comprehensive country analysis in order to
determine the degree of market risk. Additionally, the research
will play an important role in determining the probability of
succeeding.
Decision to enter the various international markets was motivated by a number of factors. The first reason that motivated the firm’s management team to consider entering the market is the intense competition in the domestic market. Over the years, the US retail sector has continued to experience an increment in the intensity of competition.
This has led to a decline in the sectors’ profitability
potential. In an effort to attain its profit maximization
objective, Walmart’s management team made a decision to venture
into the international market. Walmart’s management team perceived
that venturing into the international market would provide an
opportunity for the firm to expand its operations.
Walmart has continuously adopted the low cost strategy as its
business and marketing strategy. When entering the Japanese market,
the firm adopted the same strategy. Over the years, the firm has
continuously offered its products at a relatively low price point
compared to its competitors. Some of the firm’s main competitors in
Japan include 7-Eleven Japan Company Limited and Ito-Yokado Company
Limited.
As a result of the intense competition in the Canadian retail
industry, Walmart has incorporated the market leadership as its
market strategy. Decision to adopt this strategy has emanated from
the need to derive a high competitive advantage relative to its
competitors by being a one-stop shopping destination. To achieve
this, Walmart has focused on two main aspects which include
physical expansion and gaining sufficient market share.
Currently, Walmart is ranked as the fastest growing firm in the
retail sector with regard to general-merchandize and grocery sector
(Walmart, 2020).
Similarly, Walmart has adopted market leadership strategy. The firm has attained this by adopting different formats such as establishment of supercenters and Sam’s Club sores. Upon its entry, Walmart had only established 5 retail outlets, 2 Supercenters and 3 Sam’s Clubs. However, the firm has over the years embarked on a rapid expansion campaign. Currently, the firm operates more than 512 units.
To meet its customer’s demand, the firm has adopted the concept of product mix. It is estimated that the firm supplies more than offers more than 50,000 consumer products such as food products, apparels and sporting products. This has made the firm to be a unique retailer in the Brazilian market because there is no other retailer who offers such a wide range of products in the country.
Reasons for market entry
There are different reasons that motivated Walmart to venture into
the international market. One of the factors that the firm’s
management team considered in venturing in the Brazilian and
Canadian market is that the market was not saturated. Consequently,
the firm would have been in position to increase its market share
hence attaining its high sales objective (Rocha & Luis 61).
Decision to venture into the Japanese and the Canadian markets arose from the fact that the country has a substantial population (McKinnon para. 1). Consequently, the size of the market was relatively high. Additionally, the firm’s entry into Brazil and Japan was also necessitated by the high rate of economic growth being experienced in Japan and Brazil. Currently, Brazil is one of the countries has is considered to be an emerging economy in within the Latin America.