EssayClub.com - Free College Essays and Term Papers

Walmart Case Study

Wal-Mart’s Japan Strategy
In March 2002,Wal-Mart first entered the Japanese market
by acquiring a $46 million stake in Seiyu, the nation’s
fifth-largest supermarket retailer.1 Another main
player in the deal was Sumitomo Corp., a leading trading
company in Japan. Sumitomo’s solid business base and
knowledge of the retail sector was viewed as helping
Wal-Mart effectively enter and expand in this unique
market. As part of the deal, Sumitomo increased its stake
in Seiyu to 15.6 percent.
Although Seiyu’s existing distribution channels gave
Wal-Mart an established local partner, two years after the
initial entry, its success was unclear. In September 2003,
Seiyu forecast a loss of $83 million for the March–
December period, blaming a poor economic environment
and an unfavorable produce climate.2 While Wal-Mart is
confident of its decision, the two companies have a different
approach to management strategy, operations, and
marketing. Wal-Mart specializes in large-scale general
merchandise stores, mainly in suburban areas. Seiyu had
traditionally focused on profitable grocery stores in citycenter
locations. Over time,Wal-Mart is expected to move
away from these locations and focus on opening new
open-spaced outlets.
In addition to meeting its quantitative goals, Wal-
Mart’s ability to effectively relate to Seiyu’s employees
will be an integral piece of the mix. Japanese and Americans
have many distinct sociocultural differences, and
these variations must be understood and properly managed
by those who will be overseeing Seiyu’s operations.
In the final analysis, Wal-Mart’s lasting success will
hinge on its ability to understand cultural nuances and
properly convey its message to both Japanese consumers
and employees alike.
Wal-Mart’s International Expansion
Wal-Mart is one of the largest and most admired global
companies (see Tables 1, 2, and 3). Relying on long-term
opportunities outside of its domestic market to expand
sales,...