Chapter 7: International Strategy

Walmart uses a transnational strategy.  This is because of the high pressure to lower costs and the high pressure to sell foods and other products that will adapt to local needs.  Walmart has expanded both regionally and globally as they have expanded in North America, Europe, and Asia.  Walmart has 4,122 stores outside the U.S. that are 100% owned by Walmart.  These stores bring in $100 billion in sales and $5 billion in operation income.  Walmart takes advantage of arbitrage opportunities.  They bought $26.7 billion worth of goods directly form China in 2006.  This saved Walmart between $16 billion to $23 billion (Dess, Lumpkin, Eisner, McNamara, 2012).

Walmart's international revenues are 28% of their total revenues.  Their international revenue has increased 29% from 2010 through 2012.  Walmart is planning to add 73 stores in Canada in 2013.  They also plan to slow down their store expansions in Brazil and China in 2013 because they want to increase sales growth with their current stores (Forbes, 2012).
        
Walmart has used acquisitions for international expansion.  They acquired Yihaodian Ltd. in February 2012.  Yihaodian is a Chinese online shopping website.  Walmart hopes to use it to gain market share in China's growing economy (Alcara Store, 2012).  Walmart acquired Kosmix in April 2011.  Kosmix is a social media company focused on e-commerce.  Walmart bought Kosmix because it wanted to interact with their customers better around the world.  Walmart plans to use Kosmix to offer store deals to their customers (Minyanville, 2011).

 Walmart has used joint ventures for international expansion.  They have a joint venture with Bharti Enterprises.  The joint venture is for cash-and-carry supply chain management operations in India.  It is a  50/50 partnership and they opened their first cash-and-carry facility in India in 2009 (Walmart, 2009).  Most Walmart joint ventures have been with overseas companies because Walmart already has a strong U.S. presence.  Walmart had a merger with Cifra in Mexico.  Cifra is the largest retailer in Mexico.  The merger consolidated Walmart stores with Cifra stores (Business Week, 1997).

Alcara Store, 2012. Retrieved from http://www.alcarastore.com/deal-snapshot/Wal_Mart_Stores_Inc_acquires_Yihaodian_Co_Ltd-682601

Business Week, 1997.  Retrieved from http://www.businessweek.com/bwdaily/dnflash/june/nf70603.htm

Dess, Lumpkin, Eisner, McNamara. Strategic Management.  6th edition. 2012. 

Forbes, 2012. Retrieved from http://www.forbes.com/sites/greatspeculations/2012/11/14/wal-marts-earnings-international-will-drive-growth-amid-sluggish-u-s-sales/

Minyanville, 2011. Retrieved from http://www.minyanville.com/businessmarkets/articles/ebay-merger-amazon-internet-stocks-mergers/4/25/2011/id/34136

Walmart, 2009. Retrieved from http://www.walmartstores.com/pressroom/news/6638.aspx