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Wal-Mart’s Japan Strategy
Sachin Sebastian 122Sanjay Santhanagopalan 128
About Walmart
• Large discount department stores and warehouse stores
• World's third largest public corporation (Fortune Global 500, 2012)
• Largest retailer in the United States, and in the world
Mixed results in investments outside North America:
UKSouth America China
Germany South Korea
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
JapanNational Language JapanesePopulation (2012 est.) 126,659,683
(5th largest)
GDP (PPP 2011 est.) USD 4.220 trillion
Currency
GNI per capita
JPY (Japanese Yen)
USD 33,100
.
Eiffel tower structure
Phases of Multicultural Development
Multicultural team
effectiveness
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Walmart - Japan
Usual foreign strategy: Joint-venture
Multinational operations
Entry to Japan
Walmart strategy• Broad assortment &
lower prices• Meet local needs while
leverage global resources
• Wait & Watch (carefour)
Retail Scenario • Multi layered distribution
Network
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Global Strategy
Largest and most admired global
company
“Everyday low price strategy” – China, Mexico,
Japan, Germany, South Korea,
Hong Kong and Indonesia.
Quit operations in Hong Kong, Germany and South Korea.
Financial services in China ad
Mexico.
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Entry strategy
Too slow Just Right
EDLP - remove the stereotype
JIT replenishment system37 % to 53 % in Seiyu in 2005
Hea
vily
gua
rded
barr
ier
of e
ntry
for
new
re
taile
rs
Price and distribution
control
Market Practices
Closed-network impact to
government
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Success Mantra
PDI IDV MAS UAI LTO
54 46
95 9280
40
91
6246
29
Japan United States4 contrasting elements may cause business relationship to be more difficult between Walmart and Japan market
• equal• Japan is more
hierarchical than US.
Power Dominance Index
• Contrasting• Collectivism of
supply chain and relation to customer is difficult for US.
Individualism Index
• Contrasting• Japan may have
numerous restriction and laws which may be viewed as unnecessary by US.Uncertaint
y Avoidance Index
• Contrasting• Japan may plan
ahead and more punctual and strict, contrast to US.
Long Term Outcome Index
• Contrasting• Japan strives for
quality and perfection. While Walmart enters market with value-goods approach
Masculinity
Index
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Humane Orientation
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Walmart, a US corporation, is seen as the outsider
Walmart ushered Seiyu to dismiss up to 40% of their HQ
staff, including 2500 employees and managers.
Practice of continually praising co-workers
Walmart viewed it as a company’s priority to cut cost, in
order to implement EDLP (individualism)
Negative impressions
Sex discrimination – Women
employees being paid lower than
Men
Poor working standard -
Environmental impact – Air and water pollution
About Walmar
tJapan
Walmart -
Japan
Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
Recommendations:.
Alte
rnat
ive
1
• Think global, act local
A nation with low to medium
purchasing power would be great for EDLP
as well. Walmart has to
adapt to premium-lover Japan, and it's
not easy.
Alte
rnat
ive
2 • Different nation,
different culture, different strategy:
• Universalist approach may look
simpler and less costly in the long run, but there are cases where there are countries with
unique culture. Especially with a
with a very proud, traditionalist,
conformist society like Japan where
others have followed.
Alte
rnat
ive
3
• What do you
think?
About Walmar
tJapan
Walmart -
Japan Global Strateg
y
Entry strateg
ySuccess Mantra
Humane Orientation
Negative impressions Recommendation
“
”
Hitting is timing. Pitching is
upsetting timing-Warren Spahn
THANK YOU