Walmart global strategy: strengths, weaknesses, and analysis

Strengths and Weaknesses of Wal-Mart Global Strategy

The company has had to develop its business globally in order to evade the competition back at home. Wal-Mart today has its hope on its global strategy that has been more successful than the domestic sales. After initiating a global approach in 1991, Wal-Mart not operates in over50 countries across the globe. The failing stores in the USA have been complimented by the growing sales in other countries such as Mexico, China, Brazil and South Korea. The growth of the economies in these countries has enabled Wal-Mart to develop in these countries. For this reason, the focus of the company today is based on opening more and more stores in countries that are doing well economically such as the Asian countries such as Japan as well as those in Africa such as South Africa. However, it is important to note that the company has had mixed results in Europe with the company performing well in some countries and not the others (Ghemawat, 2013).

Strengths

Wal-Mart\'s global strategy is associated with its strong brand image. It is known in most countries such as Mexico and China, which provides it with an opportunity to develop well and make sure that it has built or developed new stores. Consequently, the company buys most of the products from the mother country, which provides the consumers with a sense of ownership and in the process reduce any resistance. For example, it buys most of the products sold in China from the American companies that operate in China. This provides the consumers with a taste of the American quality products while also providing the consumers with the notion of the products coming from China. A local adaptation has been important especially in countries that have a separate business culture, unlike the USA. Secondly, the global strategy is associated with merits like the acquisition of local companies in the countries that Wal-Mart decides to serve. For example, in Canada, Wal-Mart was able to make Woolco to be a thriving company despite going through some challenges at the time. It used the same approach in Mexico where is acquired a local company and later acquired a majority of the shares acquiring the ownership rights of the company. By doing this, Wal-Mart is able to turn the former customers of the small companies to become their own customers. Similarly, research and development have been an integral part of the company especially when it comes to entering a new market (Menon, 2014).

Weaknesses

Many weaknesses face the global strategy that Wal-Mart has adopted. One of these weaknesses is the effect of the language barrier. For example, in all the countries with the potential for growth, the language is different from that in the USA. China, Japan, and South Korea are some of the examples of the nations with a different language. Business regulations in these countries also pose a weakness to Wal-Mart because some of the governments require the company to use products produced by local companies (Menon, 2014).