http://www.studymode.com/essays/Walmart-Entry-In-India-1341327.html
A nil Gupta, in his book The Quest for Global Dominance (co-authored with Vijay Govindarajan and Haiyan Wang), explored Walmart’s globalisation journey.
“They were not the smartest globaliser and also not the dumbest globaliser,” says Gupta. Excerpts from the interview with Forbes India:
Mexico: Walmart, which is No 1 here, entered through a 50:50 joint venture with the leading retailer. They soon acquired the partner completely. In their business, local marketshare is critical. So what Walmart sells in Canada, which is right next to the US, over 85% of it is sourced from Canada. It is all about local economies of scale, local purchasing power and local logistics. Discount retailing is a very “multi-local” business.
When Company A competes with Company B, local scale and local market power determine the cost structure, branding and retail presence in eyes of customer. Wherever Walmart did not pursue this logic they ran into trouble. In the 1990s when Walmart opened its first store in Mexico, they had a huge American-style parking lot. They found all the shopping carts were piled at far end of parking lot – because customers came in via buses not cars and went to one side which was closer to the bus stop. They made mistakes in terms of the product mix. They were selling the same thing as in the US.
There was a story about them selling golf balls to customers whose income levels were low. The mistakes they made in Mexico were relatively early and non-fatal. They recovered from them very quickly. That was really the first non-US foray so they were learning on the fly. Today Mexico is a fantastic story for Walmart.
Brazil: In Brazil it took them more time to become No 1 because they had tough competitors like Ahold and Carrefour. As the competitors stumbled, they acquired the Ahold stores. Over time Walmart strengthened in Brazil. They made mistakes again with regard to localization of the product mix.
Argentina: Argentina hasn’t been a high
“They were not the smartest globaliser and also not the dumbest globaliser,” says Gupta. Excerpts from the interview with Forbes India:
Mexico: Walmart, which is No 1 here, entered through a 50:50 joint venture with the leading retailer. They soon acquired the partner completely. In their business, local marketshare is critical. So what Walmart sells in Canada, which is right next to the US, over 85% of it is sourced from Canada. It is all about local economies of scale, local purchasing power and local logistics. Discount retailing is a very “multi-local” business.
When Company A competes with Company B, local scale and local market power determine the cost structure, branding and retail presence in eyes of customer. Wherever Walmart did not pursue this logic they ran into trouble. In the 1990s when Walmart opened its first store in Mexico, they had a huge American-style parking lot. They found all the shopping carts were piled at far end of parking lot – because customers came in via buses not cars and went to one side which was closer to the bus stop. They made mistakes in terms of the product mix. They were selling the same thing as in the US.
There was a story about them selling golf balls to customers whose income levels were low. The mistakes they made in Mexico were relatively early and non-fatal. They recovered from them very quickly. That was really the first non-US foray so they were learning on the fly. Today Mexico is a fantastic story for Walmart.
Brazil: In Brazil it took them more time to become No 1 because they had tough competitors like Ahold and Carrefour. As the competitors stumbled, they acquired the Ahold stores. Over time Walmart strengthened in Brazil. They made mistakes again with regard to localization of the product mix.
Argentina: Argentina hasn’t been a high