Wal-Mart Changes Tactics to

Meet International Taste

FINAL EXAM GM 08 – GROUP 04

LEKA REDHA PUTRA (29318406) ! MEISA SOLEHA AZ ZAFIRA (29318358) ! MONIKA NOOR
K A R I M A ( 2 9 3 1 8 4 0 0 ) ! M U H A M M A D A K H I R U L H A K I M ( 2 9 3 1 8 3 4 8 ) ! M U H A M M A D FA I Z A L
P R A D H A N A P. M . ( 2 9 3 1 8 3 2 8 ) ! M U H A M M A D LU T H FA N S YA H P R A B O W O ( 2 9 3 1 8 4 0 4 )
 Wal-Mart started their international operation in 1991. The
sales had reached only 4.8 percent by 1996.
The international revenue were mostly from Canada and from
Mexico. In Canada, Wal-Mart had 120 stores in 1994 while in
Mexico, they had 390 stores.
Question 1 In 1996, it was recorded that the international unit had profit
up to $24 million. This value has increased compared to the
Overview of Wal-Mart’s previous year which has lost $16 million.
International Operation
The International Operation of Wall-Mart is different than
their operational in US. They need to adapt with the need of
the market in designated countries, their specific payment
culture, local suppliers, vendors, and competitors.
Question 2: What are the problems in Wal-
Mart expansion to International Operation?
EXTERNAL INTERNAL

Competitors that have entered the market Weak analysis on providing the right
earlier with more stores and better bargain merchandise for the right market
with suppliers
Not aware of payment culture in country that
Local vendor in distributing merchandise is concerned
Local suppliers who have difficulties in
meeting packaging and quality standard
Question 3 : Analysis of Wal-Mart’s
troubles in South America
1. Local Competitor
Analysis:
Competitors that have entered the market earlier have the first mover advantages
compare to Walmart. They already have a good bargains with the suppliers, this makes
them already penetrating the market deeper so it’s hard for Walmart to compete.
Recommended actions:
- Walmart have to give more efforts in bargaining with the suppliers
- Persuade their current suppliers in US to produce in this country
- Giving promotion, campaign, event to persuade customer
Question 3 : Analysis of Wal-Mart’s
troubles in South America
2. Local Vendor Distribution
Analysis:
Uncontrolled deliveries because Walmart doesn’t own its distribution system as
they has in United States. The goods distribution often don’t arrive on time and
sometimes the goods are disappeared on the way.
Recommended actions:
- Walmart has to establish its own distribution system and they have to limit the
distribution per day
Question 3 : Analysis of Wal-Mart’s
troubles in South America
3. Local Suppliers
Analysis:
Local suppliers have difficulties meeting Walmart specification for easy to handle
packaging and quality control. Walmart also has sought to drive hard bargains
with major suppliers. Walmart doesn’t get special deals from suppliers
Recommended actions:
- adjust the standards of specification according to the local market
Question 3 : Analysis of Wal-Mart’s
troubles in South America
4. Weak Analysis on providing the right merchandise for the right market.
Analysis:
The analyst of Wal-Mart admitted that they failed on doing their homework before
plunging in South American market. For example, they imported cordless tools which
few South American use, and leaf blowers which are useless in a concrete city such as
Sao Paulo.
Recommended Action:
The Marketing research team should do deeper research on what their local customers
need in South America. They can have local customer’s point of view, and check on what
their local competitors offering in their retail stores. Based on this research then the
Product Management Department can decide proper products, price, and quantity to
offer to the market. The existing useless merchandise can be consolidated back to US if
the return cost is still on budget.
Question 3 : Analysis of Wal-Mart’s
troubles in South America
5. Not aware of tax system and payment culture in South America
Analysis:
Wal-Mart brought in stock-handling equipment that didn’t work with standardized local pallets. It
also installed bookkeeping that failed into account Brazil’s complicated tax system. Wal-Mart has
also been slow to adapt Brazil’s fast changing credit culture. After awhile operating, the company
start accepting postdated checks, which is a common form of credit since Brazil stabilized it’s
currency in 1995.
Recommended Action:
Although there are payment methods that have better spread than others, no method is
universally preferred. It’s vital to do this homework before attempting to expand into a new
country.
When entering a new market, Wal-Mart needs to understand how to fulfill regional needs
(considering regional tax and monetary regulations), and to present the company and the
payment options in certain way so that customers are willing to shop in their stores.
Wal-Mart Nowadays
Walmart conducts retail and/or e-commerce operations
in 27 countries around the world and sources product
from more than 100 countries, each with its own
unique cultural, economic, social, and political
institutions and practices. Walmart is a company of full-
time and part-time associates from a variety of
ethnicities, orientations, backgrounds and life
experiences. Walmart expect our associates, suppliers
and contractors to act with personal integrity and in
compliance with the laws of the communities in which
they operate. Walmart also expect our associates,
suppliers and contractors to be champions and
ambassadors of our culture and basic beliefs, including
treating others with respect.