Wal-Mart’s Japan Strategy

Sachin Sebastian 122Sanjay Santhanagopalan 128

About Walmart

• Large discount department stores and warehouse stores

• World's third largest public corporation (Fortune Global 500, 2012)

• Largest retailer in the United States, and in the world

Mixed results in investments outside North America:

UKSouth America China

Germany South Korea

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

JapanNational Language JapanesePopulation (2012 est.) 126,659,683

(5th largest)

GDP (PPP 2011 est.) USD 4.220 trillion

Currency

GNI per capita

JPY (Japanese Yen)

USD 33,100

.

Eiffel tower structure

Phases of Multicultural Development

Multicultural team

effectiveness

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Walmart - Japan

Usual foreign strategy: Joint-venture

Multinational operations

Entry to Japan

Walmart strategy• Broad assortment &

lower prices• Meet local needs while

leverage global resources

• Wait & Watch (carefour)

Retail Scenario • Multi layered distribution

Network

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Global Strategy

Largest and most admired global

company

“Everyday low price strategy” – China, Mexico,

Japan, Germany, South Korea,

Hong Kong and Indonesia.

Quit operations in Hong Kong, Germany and South Korea.

Financial services in China ad

Mexico.

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Entry strategy

Too slow Just Right

EDLP - remove the stereotype

JIT replenishment system37 % to 53 % in Seiyu in 2005

Hea

vily

gua

rded

barr

ier

of e

ntry

for

new

re

taile

rs

Price and distribution

control

Market Practices

Closed-network impact to

government

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Success Mantra

PDI IDV MAS UAI LTO

54 46

95 9280

40

91

6246

29

Japan United States4 contrasting elements may cause business relationship to be more difficult between Walmart and Japan market

• equal• Japan is more

hierarchical than US.

Power Dominance Index

• Contrasting• Collectivism of

supply chain and relation to customer is difficult for US.

Individualism Index

• Contrasting• Japan may have

numerous restriction and laws which may be viewed as unnecessary by US.Uncertaint

y Avoidance Index

• Contrasting• Japan may plan

ahead and more punctual and strict, contrast to US.

Long Term Outcome Index

• Contrasting• Japan strives for

quality and perfection. While Walmart enters market with value-goods approach

Masculinity

Index

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Humane Orientation

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Walmart, a US corporation, is seen as the outsider

Walmart ushered Seiyu to dismiss up to 40% of their HQ

staff, including 2500 employees and managers.

Practice of continually praising co-workers

Walmart viewed it as a company’s priority to cut cost, in

order to implement EDLP (individualism)

Negative impressions

Sex discrimination – Women

employees being paid lower than

Men

Poor working standard -

Environmental impact – Air and water pollution

About Walmar

tJapan

Walmart -

Japan

Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

Recommendations:.

Alte

rnat

ive

1

• Think global, act local

A nation with low to medium

purchasing power would be great for EDLP

as well. Walmart has to

adapt to premium-lover Japan, and it's

not easy.

Alte

rnat

ive

2 • Different nation,

different culture, different strategy:

• Universalist approach may look

simpler and less costly in the long run, but there are cases where there are countries with

unique culture. Especially with a

with a very proud, traditionalist,

conformist society like Japan where

others have followed.

Alte

rnat

ive

3

• What do you

think?

About Walmar

tJapan

Walmart -

Japan Global Strateg

y

Entry strateg

ySuccess Mantra

Humane Orientation

Negative impressions Recommendation

“

”

Hitting is timing. Pitching is

upsetting timing-Warren Spahn

THANK YOU