Custom «Wal-Mart Merchandising Strategy» Essay Paper
For a company to succeed both in the domestic and international markets, it has to embrace the right merchandising strategies. This is because of the fact that, in the current market situation, the approach of “one size fits all” cannot work due to increased competition between firms, higher costs of production, different marketing strategies among other factors (Lohman, 2012). Based on this fact, the strategies ought to vary significantly, depending on the category as well as the objective to be achieved by the company for its brand. Therefore, all the strategies must be carefully crafted in order to enable the firm to target certain goals like being able to invite new customers, raise foot traffic among other factors that will increase sales (Lohman, 2012). One of the companies which has perfected this art both in the local and international markets is Wal-Mart Stores, Inc.
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Wal-Mart Stores, Inc. is a multinational retail corporation based in the United States; it operates multiple chain stores and warehouses across the globe (Wal-Mart Corporate, 2014). Currently, the company has more than 11,000 stores which operate under 55 various banners. As of 2014, the company has been rated as the largest firm by revenue share as indicated by the Fortune Global 500 list (Wal-Mart Corporate, 2014). According to the case study, the firm has leveraged its success due to low products pices and efficient logistical and operation systems. In addition, the company has an effective system of information, which enables it to keep all inventories at a minimum level, thus being able to avoid the aspect of under or overstocking, which in most cases results to reduced profitability (Lyons, 2007).
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From the case study, it is evident that Wal-Mart has made notable success in expanding its retail shops in the international markets. There are various factors which made it possible for the firm to attain this level of international success. Its competitors, on the other hand, have significantly failed. First, as seen in Mexico in the 1990s, the firm has established a joint venture with the local retail shops. Since expansion to international markets is a rather capital-intensive affair, joint ventures between Wal-Mart and the local firms helped the former to reduce its operational costs, thus making it able to offer its products at lower prices compared to its competitors (Lyons, 2007).
The other factor which has resulted to the success of Wal-Mart in the international markets is the ability to understand the culture of the local communities. For instance, in Mexico, the firm learnt that, unlike in the US, the majority of its customers did not have cars, thus they used to buy products in small quantities. The company also tends to hire local managers and othher employees, a factor which enables the firm to understand the local market better (Lyons, 2007). In order to change the shopping habits, the company has been able to educate the locals on the need to embrace the United States merchandising culture; Wal-Mart has already conducted similar practice in Mexico and China.
From a thorough analysis of the case study, it is clear that in order to ensure the success of Wal-Mart in international ventures, the firm has to motivate its work force through unionizing its employees as witnessed in 2006 in China. This ensures higher productivity both in the short- and long-term projects. In addition, the firm needs to understand the culture of the local population before engaging in any international venture. For instance, the management’s inability of the firm to understand the fact that consumers in South Korea and Germany are attracted by high quality merchandise rather than discounted products made the firm pull out of these two countries in 2006 (Lyons, 2007).
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In conclusion, it is evident that Wal-Mart could translate its merchandizing strategy wholesale to another country and succeed due to the management’s previous experiences. However, the company’s leadership should thoroughly study the country it wants to expand its business to, since every market is unique and requires the firm to modify its approach and strategies.
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