Wal-Mart’s Painful Lessons (BusinessWeek)
Everyone in America knows Wal-Mart is a behemoth and is feared by competitors and suppliers alike. But outside the U.S. the fear level is not quite as high. In fact, in several countries Wal-Mart would seem to exercise very little power (e.g., they dropped out of both the German and South Korean markets). This story looks at challenges facing Wal-Mart as they try to spread around the world. In particular, it looks at the retailer’s position in four markets: Japan, India, Russia and Chile.
The results are mixed: International sales rose 11.5% in the second quarter (before the impact of exchange rate fluctuations), while U.S. sales barely budged. But over the past few years, operating profit margins have declined on the international side, which now has 3,805 stores operating under 53 distinct banners in 15 markets.
Of the four markets discussed which one will be the most difficult for Wal-Mart to gain a legitimate foothold?