Market entry plan for Walmart Essay Example | Topics and Well Written Essays - 3000 words

Market entry plan for Walmart - Essay Example The firm that is analyzed in the paper is Walmart that was founded in 1962 by Sam Walton. Over the years, it has expanded to become one the US’ largest chain of retail stores, growing into almost 300 stores by the end of the 1970s, and now with over 10,000 stores globally. Its first foray into the international market was in the early 90s, when it entered into a joint venture with Mexico’s largest retailer Cifra to operate Sam’s Club. This move was to be considered its most successful entry into foreign trade, having conquered the Mexican market and contributing approximately 30% of all food sales in the local market. To date, it has not really matched its tremendous success in Mexico. Walmart now has global presence in Mexico, Germany, China and the United Kingdom, among others. It has 5,651 stores and approximately 780,000 associates in 26 countries outside the continental US. It has acquired stores, co-branded or actually brought the Walmart brands into these new locations. However, its market entry strategy has always been perceived as weak, primarily because the company has applied the same market entry strategies in majority of the locations it ventured into. Management failed to take into consider the idiosyncrasies of each country that the company has tried to penetrate, and understand the unique market needs within each culture and social setup per location. (This is not America. Why Walmart left Germany 2012). In fact, Walmart was even described as among the several retailers that have â€Å"underestimated the role of conducting cultural due diligence prior to foreign market entry†, resulting to massive pullouts in strategic locations such as Germany and South Korea, and losing of billions of dollars in the process (Retail Internationalization 2012). Taking into consideration historical hits and misses in global market penetration, this paper aims to discuss and recommend appropriate market entry strategies to ensure that t he company’s next international venture will promise more success than failure. II. MARKET ENTRY STRATEGY Australia is considered to be one of the strongest economies in the world. The country has been highly praised by various international organizations like the International Monetary Fund (IMF) for its ‘brilliant macroeconomic management and consistent economic reform’. The Australian government has created a stable and strong base for economic growth. Its current GDP growth rate is 3.8% with an inflation rate of 2.5%. It is considered to be the second easiest economy for new businessmen and the third easiest place to get credit for a business, and has few restrictions in the field of Trade and Investment (Australia Business and Economy 2012). Australia has a reliable banking system and has fast and friendly regulatory procedures. It is known for having little restriction of product markets. This country is best fit as venue for global expansion as far as Walm art is concerned. Walmart entered various locations through several entry strategies. The company entered the Mexican market through a 50-50 joint venture with Cifra, Mexico’s strongest retail company. It counted on home grown Cifra to provide operational expertise, something that is needed by Walmart considering the cultural difference between the two countries, and the economic and political situation of Mexico. This bold move to partner with a local company proved to be highly successful for Walmart considering that this is their most successful foreign partnership to date. In Canada, Walmart acquired local company Woolco to be able to penetrate the Canadian market. This decision is brought about by the fact that the Canadian mark