Global Strategies and Risk Assessment and Mitigation Strategies of Walmart

Global Strategy and Risk Assessment – Walmart’s Case
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Table of Contents Introduction. 3 Part 1: Evaluation of Global Strategies. 3 Global Strategy. 3 Competitive Environment 4 Impact of Globalization. 5 Part 2 – Risk Assessment and Mitigation Strategies. 5 Mitigation Strategies. 6 Conclusion. 8 References. 9 Introduction
The company's massive international footprint presents Walmart with various challenges (Hitt, Ireland & Hoskisson, 2014). This report examines Walmart's international operations in detail, including the company's global strategies, competitors, macro factors, and potential risks.
Part 1: Evaluation of Global Strategies
Global Strategy
Walmart’s Historical Expansion. Sam Walton founded Walmart in 1962 and initially entered foreign markets cautiously. It now has a presence of 10,500 stores and clubs in 20 countries and eCommerce websites with extensive operations in China, Canada, and the UK (Kam & Rimmer, 2022). Walmart’s global reach is evident in its nearly 25% revenue from international sales.
Cultural Nuances Adaptation. Walmart’s international growth has been a story of adaptation and standardization. Their dedication to the “Everyday Low Price” strategy demands a combination of both. By acquiring the Woolco chain in Canada, Walmart was able to corner the market and later tailored its product line to suit regional tastes. Nevertheless, Germany presented various challenges (Hunt, Watts & Bryant, 2018). Thus, the company encountered challenges due to a lack of cultural awareness and an understanding of regional market dynamics.
Legal Compliance in Diverse Markets. Every region has a distinct legal environment. In some cases, Walmart has been the target of criticism and legal action, such as labor disputes in China (Lin, 2020). Walmart invests in legal training for its local employees to meet local standards (Bal & Pawlicka, 2021). Also, Walmart has collaborated with local governments in Mexico to comply with zoning and business regulations.
Economic Impact. The arrival of Walmart can have a significant impact on the local economy. Local suppliers have benefited from its sourcing practices in nations like India, where its “Direct Farm Program” supports thousands of farmers. Its sizeable purchasing power, however, can put excessive pressure on vendors to lower prices. Walmart’s extensive supply chain infrastructure generates economic benefits by creating jobs in retail and ancillary sectors (Sarker et al., 2022). However, Covid disruption in the supply chain, the adaption of technology, and n fluctuating exchange rates affect business performance (Musella, 2023). For instance, Walmart changed its pricing and product mix strategies in Argentina during economic downturns to stay adaptable and current.
Competitive Environment
Competitive analysis. Walmart competes fiercely internationally. In Europe, Walmart competes with established giants like Carrefour, and in China, the young e-commerce platform JD.com poses a significant threat. These two tech-savvy companies have a large market share. Kalyani (2018) highlighted that Amazon, Carrefour, and JD.com increased competition, according to Porter's Five Forces. Walmart's size reduces suppliers' negotiating power. Due to "Everyday Low Prices," customers stay loyal despite alternatives. Also, new retail competitors face high capital requirements. With the rise of e-commerce, digital platforms pose a threat to Walmart, despite its strategy of integrating its physical and online presence.
Strengths and Weaknesses. Considering its strengths, Walmart operates under various brand names in 20 countries. Its global expansion is shown by its acquisitions of ASDA and Flipkart and strategic partnerships like Bharti in India. Also, Walmart’s ‘Everyday Low Prices strategy, supported by massive economies of scale, attracts millions of shoppers worldwide. Its robust supply chain ensures product availability across markets (Kalyani, 2018). However, the weaknesses include poor employee treatment and gender and racial discrimination allegations that have tarnished its reputation. Despite its global reach, Walmart overdepends on the US market. This dependence and bribery allegations in international markets threaten its otherwise stellar global narrative.
Impact of Globalization
Business Operations. Walmart's operations have been streamlined by globalization. The company's 'Every Day Low Prices' strategy has been sustained by utilizing global supply chains, but the pandemic severely hampered this interconnectedness. Despite experiencing shortages of basic supplies, Walmart CEO Doug McMillon praised the company for its resiliency in the face of inventory and cost challenges (Hitt, Ireland & Hoskisson, 2014). Walmart's recent supply chain reengineering shows its desire to evade the pandemic's pitfalls. Besides, globalization has also led Walmart to reshore.
Societal Impact. Walmart's global presence shapes consumer behavior. Its ubiquity has set shopping standards and expectations, as its impact extends beyond shopping. Walmart is reorganizing to meet global sustainability and CSR standards. Automated supply chains, which require less physical labor but pay more, reflect societal demand for enhanced work conditions. With automation servicing 65% of stores by 2026, the company predicts a workforce that will operate differently but may not necessarily be reduced in numbers, which could positively affect employment (Walmart, 2023). Thus, reshoring jobs also encourages domestic manufacturing ...