WAL MART Global International Expansion

8/8/2019 WAL MART Global International Expansion

1/15

WAL MARTGlobal Competitors

16/11/2010 SMM 208 1

GlobalRanking

Company DomesticCountry

2006 retailsales (US$m)

1 Wal-Mart Stores, Inc US 344,992

2 Carrefour S.A. France 97,861

3 Tesco Plc UK 79,976

4 Metro AG Germany 74,857

5 The Kroger Co US 66,111

Source: The top five global retailers


2/15


3/15

WAL-MART S International Operations

Stiff competition from K-mart and Target.Difficult to sustain Double-Digit Growth Rate.

Suffering from soft sales and rising inventorieswith respect of its sam s club division.Opportunity to tap potentially vast market.

Globalization and liberalization createdopportunity in early 1990.


4/15

Period Sales % of Change EBIT % of Change DepreciationTotal NetIncome % of Change

Jan-10 405,046.00 0.99 22,066.00 5.59 7,157.00 14,414.00 8.75

Jan-09 401,087.00 7.29 20,898.00 3.67 6,739.00 13,254.00 3.04

Jan-08 373,821.00 8.43 20,158.00 6.27 6,317.00 12,863.00 5.53

Jan-07 344,759.00 11.59 18,968.00 8.17 5,500.00 12,189.00 6.85

Jan-06 308,945.00 9.75 17,535.00 7.44 4,645.00 11,408.00 8.83

Jan-05 281,488.00 9.82 16,320.00 14.99 4,185.00 10,482.00 18.29

Jan-04 256,329.00 11.63 14,193.00 14.76 3,852.00 8,861.00 13.34

Jan-03 229,616.00 12.55 12,368.00 18.97 3,364.00 7,818.00 21.25

Jan-02 204,011.00 6.63 10,396.00 2.77 2,700.00 6,448.00 2.43

Jan-01 191,329.00 - 10,116.00 - 2,868.00 6,295.00 -

Financial data in U.S. DollarsValues in Millions (Except for per share items)


5/15


6/15

6

Canada

1994, MarchAcquire 122 WoolcostoresWoolworth Corp.

WAL MARTDiversification

and International Expansion


7/15

7

Mexico

Year 1992

Joint ventureCifra S.A. (Mexicos largestretailer)63 stores (22 Sams Clubs, 11Wal*Mart supercenters)




8/15

8

South Americ aP lan to enter in1995Brazil &Argentina



Braz ilJoi n t Ve n ture with Loj as

Americ anas

Arge n ti na Gree nf iel d Opre a tio ns


9/15

9

J apanJoint Venture with SeiyuLtd

Ind ia Joint Venture with Bharti

Chi naJoint Venture with

Shenzhen InternationalCredit InvestmentCompany

Germ anyAcquisition of Wertkauf and

IntersparWAL MART

Diversification and International Expansion


10/15

Cou n tr y Mode o f Entr y

Str a teg y Fa te o f the de a l

Canada(**290)

Acquiri ng a we ak pl ay er

Woolco 122 stores in 1992 VERYSUCCESSFULWipe d out T.E a to n Comp any, a ma jor pl ay er

Oper a te d in are as th a t h av e highbr and recog n itio n

Oper a te d in are as requiri ngmi nimum cultur a l ada pt a tio n

Emph as ise d on cu stomer ser vice &store de sign

UK(**337) Acquiri ng Acquire d ASDAs oper a tio ns (232 store s)1999

SUCCESSFUL.Competitor s-Te sco s and Sains bur ys

Cas hi ng o n the M&A syn ergie s

Mexico(**919)

Joi n tVe nture

Entere d in 1997 JV with Cif ra

Loc a l m ar ket kn owle dge

Overc ame cultur a l b arrier s

SUCCESSFUL.(50% of the m arket )

Competitio n by Carre f our

SITUATIONAL ANALYSISGOING GLOBAL

** no.of stores operating as on Jul2007

Three successes out of ten.Successes 3/10


11/15

Cou n tr y Mode o f En tr y

Str a teg y Wha t w as the fa te o f the de al

Germ any

(**0-88)

Acquiri ng Acquire d large st pl ay er s Wert ka u f and In ter spar

FAILED.Entere d in 1997(21+74 store s);Exite d in 2007-Americ an St yle Wor king pr actice s-High L abor Cost s.-Mana geme nt -- St aff Rif t s

-Competitor s: ALDI and LIDI (che ap ) .

Simil ar bu sine ss and HR mo del s

Met E U gui deli ne s f or bu sine ss

Braz il

(**298)

60 -40 JV Le ver age d experie nce o f Mexic an m kt s Whe n e ntere d in 1995

Alre ady Carre f our ,P de A , and Se ndas

So ver y tough competitio n (Pi w as e ate n )Emph as ise d on Customer ser vice

De velope d eco nomie s of ScaleUtili se d Discou nt t actic s

Arge nti na(**15)

Gree nf iel d Oper a tio n

Gaine d experie nce f rom Mexico & Braz il -Wro ng an ticip a tio n of the Arge nti ne

-Competitio n by Carre f ourEco nomie s of Sca le


Three successes out of ten..

** no.of stores operating as on Jul2007

3/10


12/15


13/15

SITUATIONAL ANALYSIS GOINGGLOBAL

WHY GLOBAL - To survive

Why was growth so important?

Capital market expectations-continuous sales and profits.

Expectations of its own employees-ESOPS.Saturated domestic market.U.S. just 4% of world's population-(rest 96% -already dented)Emerging markets-tremendous opportunities.

What were its strengths?

Tremendous buying power-P&G,Kelloggs,Nestl,Coke,Pfizer,etcDomestic knowledge bases & competencies.


14/15

STEP 1-DECIDING COUNTRY-specifics of the business,competitive and economic environments

Acquiringan existing player

(GM,CN,UK,SK,PR,JP)

Starting new storeson own

Joint Ventures(MX,BZ)

STEP 2-DECIDING STRATEGY

Start greenfield*operations .(AG,CH)


*A new operation that is built from the ground up. `


15/15

Documents

WAL MART Global International Expansion