This section of research examines Walmart’s current globalization strategy. My personal analysis and the overall impact on Walmart’s globalization efforts are also discussed. Finally, I compare the past and current globalization strategies to see if there have been significant improvements and changes.
Walmart’s strategy focuses on cost leadership, IT and logistics. Walmart has a number of strategies in place to stay competitive on the global market and be efficient. First, Walmart’s multi-domestic strategy for the US has been modified to suit the needs and interests of the host countries. Walmart’s strategy of low prices and including some American products in its outlets overseas has proved to be very popular. Walmart had to shift its focus from the USA and include products that meet the needs of other countries. Walmart is working to find a balance between global standardization and local customization in store layouts and practices. The company also used joint ventures and acquisitions to expand its global reach. It has 6148 stores worldwide and accounts for 16.7% of all international sales.
Walmart’s globalization strategies are showing some flaws. First, Walmart has seen many Chinese products on its shelves, even though they are very cheap. This created a negative perception and marketing campaign that led to buyers from other nations believing that China-made commodities are inferior. The company was also accused of selling products at very low prices, which made it difficult for competitors to compete. Walmart is not able to develop a visionary strategy like Kmart USA. Walmart’s management policies do not contain clear guidelines or strategies that will help it succeed in the long-term.
Walmart’s previous globalization strategies led to some significant lessons. The Chinese retail landscape was very different from the US, which surprised Walmart. Many Chinese buyers don’t want to drive or visit shops, so there are many mom-and-pop stores. Walmart attempted to adapt their strategies and used their own strategies. They targeted middle-class customers by removing the ELDP model and instead offering more upscale goods and products that appeal to middle-class shoppers. The company’s ELDP model was not successful in Japan or South Korea, as Japanese and Korean consumers value quality more than price. Walmart must use alternative pricing strategies to its ELDP model. While the price is important and attracts most consumers, it is not always true.
