Wal-Mart in the 21st Century: A Global Perspective

Abstract

Although more consumers are answering questions about where they purchased merchandise in the United States with “I got it at Wal-Mart,” the retail behemoth has questions it needs answered about the current, international issues it faces. Where, when, and how can it use its capabilities in other countries? And how can capabilities and knowledge developed in one part of the globe be used in North America, South America, Asia, and Europe to repeat its success? The case provides a strategic analysis of the problems of international expansion as Wal-Mart dreams of hearing the I-got-it-at-Wal-Mart answer spoken in many languages.

Excerpt

UVA-S-0100

WAL-MART IN THE 21ST CENTURY: A GLOBAL PERSPECTIVE

The world's largest retailer still thinks of itself as a small-town outfit. That might be its greatest strength.

By 2002, ten years after its folksy founder Sam Walton died, Wal-Mart was the largest company in the world, having surpassed even Exxon Mobil and General Electric. Its reported sales were $ 218 billion; worldwide, there were 1,647 Wal-Mart stores, 1,066 Supercenters, 500 Sam's Clubs, 1,170 international stores, and 1.3 million “associates,” as salespeople were known. Wal-Mart had opened 107 stores in foreign countries that year and reported experimenting internationally with new operational elements, including jewelry, one-hour photos, optical labs, and online home-delivery programs. Domestically, Wal-Mart was trying out products not normally associated with the retailer, such as used cars. While the 1990s had been a decade of global expansion for the retail giant, its 2001 international business, $ 35.5 billion, represented less than 20% of its $ 218 billion business. Still, Wal-Mart International as a stand-alone business would have ranked 42nd on the Fortune 500, ahead of such stalwart retailers as J.C. Penney and Costco. The going had not been easy; Wal-Mart International did not show a profit until 1997, six years after starting global expansion. Table 1 shows the breakdown of stores in the international community at the end of January 2002.

Table 1. Breakdown of international stores as of January 2002.

Argentina

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Keywords: cultural conflict, international operations, international strategy, strategic market planning, strategic planning, strategy formulation, strategy formulation