Walmart International Business Strategies - Case Study Example

Walmart International Business Strategies Walmart International Business Strategy Company Background Walmart Stores, Inc. is a retail company based in the U.S. undertaking its operations globally. Sam Walton established the company in 1962. It operates in more than 28 nations with over 11,000 stores. In Canada and the United States, the company performs its operations under the name Walmart. It is named Best Prince in India, ASDA (United Kingdom), Seiyu (Japan), and Walmart de Mexico (Mexico). Its operations in Canada, Brazil, and Argentina are wholly owned. Retail warehouses under the name Sam’s Club are also owned and operated by Walmart. In terms of revenue, Walmart is a global leader and the largest private employer globally having more than 2.2 million workers (CNN, 2015). The company is owned by the Walton family, which controls its operations. The heirs of Sam Walton own more than 50 percent of the company in terms of the corporation’s holdings. In terms of market value, Walmart is ranked at the top most position and serves as the biggest retailer of groceries in the U.S. In 2009, for instance, the company realized revenue of $258 billion from sales made in the U.S. grocery market (Bloomberg, 2015). In 1972, Walmart became registered in New York Stock Exchange. During the late years of 1980s and earlier years of 1990s, Walmart grew from a regional company to become a national giant. In 1988, the firm had emerged as one of the most profitable companies in the U.S. It emerged as the largest company in revenue by 1989. To expand its revenue considerably, Walmart is opening more branches globally, especially in emerging markets, allowing it to emerge as an international brand (Vault, 2015). Organization Culture When Walmart emerged as a global retail brand, the staffs were given lists of things that they should and should not do in each area of their work. Presently, the company its culture, which is based on rules, is incapable of coping with challenges brought forth by changes in technology and globalization. As such, the company is embarking on initiatives aimed at adopting a culture that is based on value, which trusts that the workforce does the right thing, as they are aware of the firms standing (Lichtenstein, 2011). Value is one of the major topics that managers think of. Studies reveal that the manner in which a firm undertakes its business activities is as important as what it does. Cultures that firms exercise are of different types. These may include top-down management, top-down skills, self-governance, as well as command-and-control. These kinds of differences matter with regard to the way that employees perceive their organization (Lisparc, 2010). For Walmart, its unique culture plays a key role in terms of making the company to emerge as a global brand. The culture of the company is based on three major beliefs, which it exercise every day to address the needs of its clients as well as each other. One of the key driving forces towards the success of Walmart is the respect it drives towards individuals. The people at Walmart are hardworking and team up whenever they want to achieve exemplary things. Although the personal beliefs and backgrounds of the people at Walmart are different, they refrain from taking each other for granted (Lichtenstein, 2011). They encourage each other to express their ideas and thoughts as well as the treat each other with respect and dignity. Furthermore, with regard to the services that the company offers its clients, it treats them with respect because they are the ones that keep it running. Thus, the company is always looking for ways in which it can provide services to its clients to address their needs optimally. Additionally, Walmart’s culture is driven by the struggle for excellence (Yates, 2013). The company is proud of the accomplishments it realized although it never rests at a single point. The firm is constantly looking for more ideas as well as goals that will help to drive its growth forward. Walmart is modeled after Sam Walton, who aimed at keeping prices as low as possible while offering high quality products. Thus, the culture that Walmart follows is ideal in terms of revealing why it is in business. This way, it has managed to realize success in its operations, allowing it to emerge as one of the most valued products in the world (Lisparc, 2010). International Dealings Ethics For Walmart to operate successfully in the global marketplace, it has adopted a code of ethics that allow it to meet the diverse needs of clients from different parts of the world. These have played a major role in encouraging individuals from different cultural backgrounds to welcome the products that the Walmart offers, boosting its sales considerably. Walmart has set up a Global Ethics branch whose goal is to promote the culture of integrity by Walmart. This body aims to develop as well as uphold the policies the upholding ethical behavior among its stakeholders in the different areas where it operates. It aims at raising awareness regarding ethical policies as well as offers a variety of channels where stakeholders can raise their concerns regarding the firm’s operations (Walmart, 2015). Global Ethics aims to offer guidance as well as resource for facilitating the decision-making process. It provides an anonymous and confidential system for reporting unethical acts. It also enforces ethics continuation in the communication and education system. To report any incidences of unethical behavior, a person is encouraged to visit www.wamartethics.com to understand the diverse ways in which the company exercises ethical duties internationally. Through global ethics education, Walmart embarks on promoting integrity each day for associates. It also integrates ethical content to the prevailing functional training areas. It has also implemented an ethical education in the U.S., which it plans to expand globally and boost its operations. The Integrity in Action Award is also an initiative by Walmart whose goal is to recognize those members that exercise integrity. It consistently encourages people to engage in performing the right things. For instance, by facilitating sharing of stories, the program is capable of fostering and sustaining a culture of integrity, which continues to drive the company’s success globally. For the Integrity in Action Award initiative, associates make voluntary nominations to determine which countries have the most inspiring associates (Walmart, 2015). Strategic Positioning The growth strategy for Walmart’s international business comprise of forming alliances and obtaining new store to penetrate new markets. Walmart is also making hefty investments in mobile and e-commerce channels, allowing it to realize tremendous growth in the international market. Since the operations of Walmart in the U.S. seem to have stagnated, the company replaced the leader of the stores division in the U.S., making plans to accelerate the growth of domestic small stores in 2014 significantly. The company made plans to add approximately 300 stores by the end of the year (Banjo, 2014). Walmart is also making plans to add an additional 115 supercenters. For the company to boost its growth in the local market, it embarked on restructuring the U.S. organizations and a new segment for overseeing international e-commerce. Furthermore, Walmart formed a new international sourcing relationship with Li & Fung, which is a retailing firm situated in Hong Kong. The deals Walmart established with the firm were aimed at offering supply chain services. This aimed at establishing a new firm whose goal would be to manage the accounts of Walmart as well as its purchasing agent (Bagons, 2013). Furthermore, the reorganization efforts in the U.S. targets forming three business units, including Walmart North, Walmart South, and Walmart West. The goal of this move is to facilitate in managing domestic stores more efficiently. Nonetheless, although retail operations were split to three, the real estate, logistics, and store operations were merged to a single leadership team (Strategic Minds, 2011). Walmart establishments dominate most of the suburbs in the U.S., although the company has made unsuccessful trials to penetrate urban markets. However, the company is committed to providing its clients with affordable and healthier foods. It aims at reducing fats, sodium, and added sugar in its line of products, encouraging its suppliers to follow the same trend. During the financial year 2015, Walmart expanded, relocated, and opened approximately 216 Sam’s Club stores and made plans to open about 12 new ones. It also targeted remodeling more than 55 of the clubs to keep its operations up-do-date with the needs of its clients (The Economist, 2011). Given the prime growth for Walmart’s international growth, the company is eyeing international business to boost its financial strength. The Mexican market is faced with serious scandals, serving as a drawback to the leadership of the company. Mexico serves as one of the biggest foreign markets for Walmart having more than 2,000 stores. The company is also growing fast in the southern parts of Latin America, including Brazil and Chile, where it has more than 557 and 404 stores respectively (Kar, 2011). The Asian market apart from Japan serves as another major area for Walmart’s growth. By embarking on joint ventures, the company has about 411 stores situated in China. To support further growth in this region, Walmart is making plans to establish headquarters in Shenzhen. Furthermore, to illustrate the need for the large market in China, Walmart is making plans to work with various officials in the region to establish labor unions. It is also embarking on penetrating the Indian market by merging with Bharti Enterprises, although it is fragmented. However, Best Price, which was the first wholesale store in India, which was formed in 2009, has grown, reaching more than 20 locations (Kar, 2011). Marketing Strategies Although Walmart is one of the largest retail firms in the world, it could not have reached this point without employing appropriate marketing strategies. One of the key drivers for Walmart’s growth is low prices. The major thing that an individual notices after entering a Walmart store is the low prices for their products (CNN, 2015). This helps with the company’s marketing strategies since most clients seek places where they can attain products at a low price. By witnessing advertisements concerning low prices, customers tend to become loyal to the company because they know they will get best deals for long (Bagons, 2013). Walmart stores are easily accessible because they have established stores in different parts of the world. Even if some people lack access to the company’s stores, they can easily shop for products by visiting their online platform. By being accessible, the company finds it easy to market to its clients, since customers do not need to struggle to access the company. Clients are also capable of contacting the firm 24 hours in a day, allowing clients in different parts of the world to realize satisfaction (Bagons, 2013). It is possible for every firm to be accessible, even if it only operates an internet store. Accessibility does not only mean that clients should visit your store physically. It means that clients are capable of reaching you regardless of your location. Therefore, for those firms owning physical stores and are open for 24 hours in a day, they should provide their clients with places where they can order certain items through their website. The contact information provided should also allow them to contact a live person or write a message where they can be contacted later concerning the order details. This plays a major role in boosting the marketing efforts for a company, such as Walmart (Bloomberg, 2015). Walmart products appeal to many people in different parts of the world. It offers a range of product types, including home cleaners, beauty products, electronics, toys, and groceries. It is possible for people to find the products they need to use, allowing the company to appeal to people of different personalities. However, although many firms may not be able to offer many products as in the case of Walmart, it is vital to note that expanding the range of products increases the overall client base. In case a firm only aims at offering specific products, it may risk business, especially if the product fails to sell, leading to business failure (Vault, 2015). Many big firms, including Walmart are laying notable emphasis on performing campaigns through the social media. Firms can use various forms of social media tactics. However, video sharing and blogging are the most ideal, particularly when a firm links the posts with social networks. Millions of individuals visit sites, such as YouTube on a daily basis. Walmart uses this kind of strategy to direct its clients to the company. By making quality and relevant videos, which appeal to the target audience while promoting its products, the revenues of the company rise due to increased sales. Although this strategy proves futile initially, a firm starts witnessing great results by investing considerably on marketing budget (Yates, 2013). Blogging is also another major strategy that a company uses to attract new clients. This strategy is similar to the one for video sharing. Thus, by making relevant and quality content, Walmart manages to appeal to its audience, increasing its sales considerably. It is possible to initiate a blog, since it mostly does not cost anything. By making the content, which a firm wishes to share and links them to social networking sites, more people start developing interest in your products, leading to a notable rise in sales and revenue (Strategic Minds, 2011). References Bagons, S. (2013). Top Marketing strategies that can be Learned from WalMart. Retrieved from http://www.veteranstodaymoney.com/2013/09/top-marketing-strategies-that-can-be-learned-from-walmart/ Banjo, S. (2014). Wal-Marts Strategy to Jump Start Growth in China. Retrieved from http://www.wsj.com/articles/wal-marts-strategy-to-jump-start-growth-in-china-1407252531 Bloomberg. (2015). Wal-Mart Stores Inc. Retrieved from http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=WMT CNN. (2015). Wal Mart Stores Inc . Retrieved from http://money.cnn.com/quote/profile/profile.html?symb=WMT Kar, A. (2011). Wal-Mart : International Strategy: Case Study. Retrieved from http://anirbankar.com/category/international-strategy-for-walmart/ Lichtenstein, N. (2011). Wal-Mart’s Authoritarian Culture. Retrieved from http://www.nytimes.com/2011/06/22/opinion/22Lichtenstein.html?_r=0 Lisparc. (2010). 3 Basic Beliefs & Values in Walmart. Retrieved from https://lisparc.wordpress.com/2010/09/07/3-basic-beliefs-values-in-walmart/ Strategic Minds. (2011). The Wal-Mart Marketing Strategy. Retrieved from http://www.strategicminds.eu/blog/the-wal-mart-marketing-strategy The Economist. (2011). The view from the top, and bottom. Retrieved from http://www.economist.com/node/21530171 Vault. (2015). Walmart Stores Inc. Retrieved from http://www.vault.com/company-profiles/retail/wal-mart-stores,-inc/company-overview.aspx Walmart. (2015). Ethics & Integrity. Retrieved from http://corporate.walmart.com/our-story/ethics-integrity Yates, C. (2013). A culture of corporate at Wal-Mart. Retrieved from http://www.washingtonpost.com/blogs/local/wp/2013/12/04/a-culture-of-corporate-at-wal-mart/ Read More