Case Analysis Of Wal-Mart

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Wal-Mart’s operation started in 1962 when its founder Sam Walton opened the first Wal-Mart discount retail store in Rogers, Arkansas. Wal-Mart’s growth was rapid because it took advantage against its competitors using an Every Day Low Price strategy. This relied on limiting costs via economies of scale, the use of computer technology and innovation and delivery (Gopalakrishna, Subramanian & Fleischmann, 2016). In the mid-2000s, the USA economy declined and as a result, the retail sector incurred long-period stagnation. For this reason, Wal-Mart decided to expand his operations internationally. By 2007, Wal-Mart was a multinational retail corporation that operated 971 discount stores, 2447 supercenters, 591 Sam’s Clubs and 132 neighborhood markets …show more content…

Wal-Mart’s target was to improve its international presence following three strategies: i) expanding into new markets with multiple formats, ii) opening new stores in existing markets and iii) rising sales at existing international stores (Kamboj, Kalia & Karla, 2011) . Although, Wal-Mart’s ventures achieved to be distinctive in countries that are close to the USA market such as Canada and Mexico, they had poor financial performance in the Asian and European countries. More specifically, in the late 1990s, Wal-Mart expanded into the South Korean and the German markets but it failed in both of them and exited quickly …show more content…

The South Korean culture is very tied into the markets; it is one of the largest countries that is deeply involved in local markets (Gen, 2006) hence South Koreans prefer to see and buy localized items. South Koreans are visually-oriented customers, appreciating aesthetically pleasing displays and shopping environment and are not very receptive to the typical Western-like box discounter. This inhibited house wife from shopping in Wal-Mart (Olsen, 2006).
Geographical Differences: Wal-Mart’s natural approach in Korea was to offer a warehouse based store setting – very similar to its settings in the USA. Hence they opened their outlets outside the city. Wal-Mart totally misunderstood the local Korean retail culture which thrives as a festive and social setting. Korea’s retail market is composed of thousands of small retailers that are typically dispersed in local neighborhoods and form both a marketplace and a social centre. The successful domestic retail supercenters aimed to recreate the festive, noisy atmosphere of the outdoor markets within their stores (Ramstad,

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