Analysis of Walmart’s Globalization Strategy

This part of the research evaluates Walmart’s globalization strategy in the present. In addition, my personal analysis is discussed and the overall impact of the globalization effort of Walmart Lastly, the past and present globalization strategies have been compared to determine whether the company has made significant changes and improvements.

Walmart's strategy is basically based on cost leadership, IT, logistics, and customer orientation. Meanwhile, in order to be effective and remain competitive in the global market, Walmart has adopted several strategies. First, the company’s multi-domestic strategy in the US, which resulted in successful penetration, has been adjusted to satisfy the needs of the host countries. Walmart has been so popular with its strategy of lowest prices and incorporating some of its American products to its retail outlets abroad. However, Walmart needed to change its US-focused products and included a variety of products that caters to the demand of host countries.

Second, Walmart is moving towards a transnational strategy to effectively utilize local and global competencies. The company is taking steps to achieve a balance between global standardization of operating strategy and local customization of store layout and practices. In addition, the company has used acquisitions and joint ventures for global expansion, it has around 6148 stores globally and accounted for 16.7% of international sales.

Meanwhile, Walmart’s globalization strategies have revealed some weaknesses. First, in China, many Chinese products, which are of very low price, have been seen on the shelves of Walmart. This resulted in negative marketing and perception of buyers from other countries who thought that commodities from China are substandard. Second, the company has also been blamed for unethical practices for selling the products at a very low price, making it difficult for other retailers to compete. Third, Walmart does not possess a visionary strategy, unlike its close rival Kmart in the USA. The company’s management policy does not have clear guidelines and strategies on how to be successful in the future.

There are significant experiences that Walmart has learned from its past globalization strategy efforts. In China, the company was quite surprised by an entirely different retail set-up in the country compared to the US. There are thousands of mom-and-pop shops and many Chinese buyers are reluctant to drive and visit retail shops. Walmart tried to adapt and use their own strategies, such as they targeted middle-class consumers by removing the ELDP model but offering more upscale products and goods that interest middle-class consumers. Meanwhile, the company did not have significant success in Japan and South Korea using its ELDP model because Japanese and Korean consumers are more of quality rather than price-conscious. Walmart has to adapt other pricing strategies, such as price skimming, value-based pricing, dynamic pricing strategy, and high-low pricing strategy, rather than its usual ELDP model. Finally, the price is a significant factor that usually attracts consumers however it is not always the case.