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There is a long and interesting piece in Business Week (soon to be known as Bloomberg’s Business Week, according to the headlines) about Walmart’s international strategy, which is described as having been “marginalized” and “haphazard.” There is a concerted effort to change this approach, in part because the company’s leadership knows that it can no longer be a US company with an international division, but rather must be a truly global company if it is to thrive in a 21st century economy.

While there certainly are examples of where Walmart’s international ambitions went off the rails - Germany and Korea come quickly to mind - Business Week reports that Walmart seems to be adapting to a side of its business that “has 3,805 stores operating under 53 distinct banners in 15 markets.”

The magazine’s Matthew Boyle writes: “Four countries illustrate the challenges the world's largest retailer will face in the coming years as it seeks new sources of global growth. In Japan, managers are trying to revitalize a business that has hemorrhaged money for years - weighed down by a ho-hum brand, the country's byzantine distribution system, and cultural resistance to the discount model. In India, restrictions on foreign ownership have forced the company to team up with conglomerate Bharti, an odd coupling that has so far resulted in one store. Walmart has spent more than five years in Russia, maintaining a team of 30 executives who are still trying to plot an entry strategy at a time when other foreign retailers, like Carrefour, are bulking up their presence. And in Chile, a decade-long courtship finally led to the acquisition of the country's leading supermarket chain earlier this year, bringing with it a different business model, based in part on financial services.

“All four demonstrate the perilous but potentially lucrative terrain that lies outside the saturated retail markets of Europe and North America. And Walmart's success will ultimately hinge on its ability to learn from past mistakes and adapt quickly to the shifting realities of these markets.”
KC's View:
Excellent piece...it is worth reading the whole thing on the Business Week website.

As in so many ways (and I say this at the risk of being accused of being a Walmart apologist), the world’s largest retailer has realized that even when you are number one, you have to continually raise the level of your game - through improved operations and a raised consciousness. Countries outside the US actually have been good for Walmart because they’ve proven to the company’s leadership what Crash Davis once said about baseball - that you have to play the game with fear and arrogance.