Wal-Mart's Global Expansion the Following Research Proposal

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Lastly, market studies must be conducted to decide what product mis will sell the best in these new locations, focusing on products that are already strong sellers in the area.

Alternative:

After a year of operation, Wal-Mart should evaluate the success of their entry into the new market. Sales, profits and market share will tell the organization if they're on the expected track. If not, the degree of difference must be evaluated. In some instances, there may be a geographic region in which Wal-Mart's model simply doesn't fit well with the culture. In those instances, they will have to re-evaluate their strategies.

How does expanding internationally benefit Wal-Mart?

Expanding internationally benefits Wal-Mart in a variety of ways. First, they are able to continue organizational growth, despite market saturation in the United States. The company can enhance their economies of scale, with global buying power. There are many of Wal-Mart's key suppliers who already have an international presence that they can utilize and demand even greater discounts from, with globalization. These lower costs can help them increase profits and increase market share, both in the U.S. And abroad. Lastly, Wal-Mart has been able to utilize ideas they've picked up in different countries for stores they already have in the U.S., such as multilevel stores and wine departments (Hill, 2007).

What are the risks that Wal-Mart faces when entering other retail markets?

The primary risks Wal-Mart faces when entering new markets are those experienced in their entry in Mexico. Wal-Mart assumed that their current strategies would be easily implemented in the new market.

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However, the resources needed to facilitate the strategies, such as infrastructure and relationships, were not in place (Hill, 2007). Wal-Mart can mitigate these risks by ensuring these support structures are in place, or alternative strategies to work around these deficiencies have been developed.

Why do you think that Wal-Mart first entered Mexico via a joint venture?

Wal-Mart first entered Mexico via a joint venture likely to use Cifera's experience in operating in Mexico. However, it appears that Wal-Mart was determined to conduct business the way it always had in the U.S. Once they discovered what strategies they needed to alter to work in Mexico and developed some of their own relationships with suppliers, purchasing Cifera allowed them to further expand in the country with established locations they could further improve with the altered Wal-Mart strategies.

What strategy is Wal-Mart pursuing?

Wal-Mart is pursuing a transnational strategy as it expands globally. The organization faces both significant cost pressures as well as significant demands for local responsiveness. This strategic plan makes sense because the organization is able to "simultaneously achieve low costs through location economies, economies of scale, and learning effects; differentiate their product offerings across geographic markets to account for local differences; and foster a multidirectional flow of skills between different subsidiaries in the firms global network of operations" (Hill, 2007, p. 384). In this way, Wal-Mart has been able to take the valuable lessons its developed in the United States and apply them with geographic-specific alterations, to maximize their success in different regions......

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