Walmart Japan Global Strategy
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Walmart has had mixed success expanding outside of North America. In Japan, Walmart acquired Seiyu in 2002 and has faced challenges implementing its low price strategy due to cultural differences between the US and Japan. Japan values quality, perfectionism, and hierarchy more than the US. Walmart was seen as an outsider and its dismissal of Seiyu employees hurt its image. The document recommends Walmart take a more localized approach in Japan to account for Japan's unique culture instead of using a universal strategy.
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Walmart Japan Global Strategy
- 1. Wal-Mart’s Japan Strategy Sachin Sebastian 122 Sanjay Santhanagopalan 128
- 2. 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: UK South America China Germany South Korea About Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 3. Japan National Language Japanese Population (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 Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 4. 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 Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 5. 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 Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 6. Entry strategy Too slow Just Right Heavilyguarded barrierofentryfornewretailers Price and distribution control Market Practices Closed-network impact to government About Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 7. Success Mantra 54 46 95 92 80 40 91 62 46 29 PDI IDV MAS UAI LTO Japan United States 4 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. Uncertainty 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 Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 8. Humane Orientation About Walmart Japan Walmart - Japan Global Strategy Entry strategy Success 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)
- 9. Negative impressions Sex discrimination – Women employees being paid lower than Men Poor working standard - Environmental impact – Air and water pollution About Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation
- 10. Recommendations :. Alternative1 • 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. Alternative2 • 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. Alternative3 • What do you think? About Walmart Japan Walmart - Japan Global Strategy Entry strategy Success Mantra Humane Orientation Negative impressions Recommendation