Walmart Takes on the World Solution Essay

2. In what countries has Wal-Mart done poorly? Can you identify any common consumer market, retailer traits, or entry strategies across these countries that might account for Wal-Mart’s lack of success?

Answer:

Germany, Japan, Brazil, and Argentina have not been good entries for Wal-Mart. In Germany and Japan, consumers are more demanding and more quality conscious. They seem to be less interested in the type of goods that Wal-Mart sells. In both locations, real estate and market conditions stymie Wal-Mart’s growth—whether this is unions or convoluted distribution systems. In both Japan and Germany, Wal-Mart bought existing chains with shabby stores and poor sales. Perhaps the lack of success of their acquired firms accounts for why Wal-Mart management did not utilize the expertise of those managers. Another possibility is that Wal-Mart had had such good success in Mexico and Canada that it was overconfident of its approach when it entered the German market. Since then, it seems to be more willing to listen to local partners.

In Brazil and Argentina, there are many factors against success—economic factors, real estate, and crowded cities demanding different store formats. Also, Wal-Mart found it hard to compete with Carrefour, which is the second largest discount chain in the world. Although Carrefour has some stores in Mexico, Wal-Mart had not previously entered a country where…