Full version Wal-Mart Executive Summary

Wal-Mart Executive Summary

This print version free essay Wal-Mart Executive Summary.

Category: Business

Autor: reviewessays 21 February 2011

Words: 518 | Pages: 3

Wal-Mart Executive Summary

Wal-Mart has shown continued success in their use of information technology with e-commerce, a system that allows managers to view point-of-sale information, and the possible use of RFID chips in the near future. After reviewing the 2005 Harvard Business School study of Wal-Mart, it is evident that this company has been successful in expanding its operations in several foreign markets. Wal-Mart had established itself as the largest retailer in both Canada in 2003 and Mexico in 2004. Through acquisitions, partnerships, and go-it-alone strategies, Wal-Mart began the expansion of large-scale operations in other countries such as the U.K., Germany, South Korea, China and Japan. Wal-Mart was very successful in aligning itself with the Japanese retailer, Seiyu, and integrating their information systems together to show an inventory accuracy rate of 94%, which was the highest in all the countries Wal-Mart was operating in. Wal-Mart also encountered a couple problem areas in the midst of its world-wide expansion. While trying to establish itself in Indonesia in the late 1990’s, Wal-Mart was shut down by rioting during the Asian financial crisis at this time. Wal-Mart may have also moved in too quickly on Germany. It is mentioned in the case that Wal-Mart was not prepared for the well-established positions of discounters, the inflexibility of suppliers, and the strength of trade unions in this country. The company was also not familiar with the shopping habits of the Germans or that Wal-Mart’s Western company culture may be a bit extreme for the German workforce. Analysts have estimated that Wal-Mart has made an overall profit in their overseas operations year after year, but is still unprofitable in Germany and Japan (despite the apparent success of the Seiyu merge in Japan).

Findings and Conclusions

Although Wal-Mart has shown overall success in the global expansion of its business, there seem to be areas of the world that continue to be problematic. One area that may be causing problems for Wal-Mart in Germany and Japan is that they have not yet established their brand name that they have built over the years in the United States. It is mentioned in the case that Wal-Mart did eventually join forces with Aldi Group in Germany, but continues to go by “Wal-Mart Germany.” It is also shown that only 15% of Japanese consumers had ever heard of Wal-Mart at their original time of market entry, and for this reason, the company continues to use the Seiyu brand. For the same reason, Wal-Mart may consider sticking to the original Aldi Group brand name and slowly easing its presence into the marketplace. It should also be mentioned that a large part of Wal-Mart’s success in the United States has been due to low prices which is made partly possible by flexible suppliers and a non-unionized workforce. With strong unions and inflexible suppliers, Germany may not be an attractive market for Wal-Mart to continue to pursue if it expects to be as successful as it has been in the United States and other countries.