Case Study #1: Wal-Mart’s Foreign Expansion
1. Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not? I don’t think Wal-Mart could translate its merchandising strategy wholesale directly to another country and succeed. Because different countries have different cultures and backgrounds, in order to succeed in another country, it needs to adapt to these differences and find a way that best fits in the local market. Apparently, the “U.S. style” does not work for all the countries. For example, Wal-Mart is famous for its low price strategy in the U.S. However, when it shifted its store with the same strategy to Germany and South Korea, it soon failed. People in the …show more content…
To fully succeed in China, it needs to learn about the local markets and consumers buying behaviors so that they can plan strategically and find the best way to fit in the local market. Therefore, instead of bursting its stores in China, it decided to expand slowly while adapting to Chinese market and consumers by changing some selling styles. For example, in the U.S., Wal-Mart sells dead fish and frozen meat, which is not accepted by Chinese consumers. Chinese consumers think food products should be totally fresh or even killed in front of them so that they feel safe about the food source. In order to meet this shopping habit, Wal-Mart started to install fish tanks in the store to keep the fish fresh, sold uncovered meat, etc. Another thing Wal-Mart must do to succeed in China is to embrace unions, especially when unions in China are the tools to provide funding for the Communist Party and securing social order. So far, I think Wal-Mart has done a really good job in China and it is on track.
5. To what extent can a company like Wal-Mart change the culture of the nation where it is doing business? I don’t think a company like Wal-Mart could change the culture of the nation where it is doing business a lot, because the culture of the nation is formed by different aspects, such as people, history, and so on.