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Managing Across Borders



Walmart is an American retail chain of grocery stores that was founded by Sam Walton in the year of 1962 with the purpose of providing retail products to the customers.  The headquarters of the company is in Bentonville, Arkansas. According to the report from January 2018, the company has got 11,718 stores across the world. The company offers a variety of products like electronics, music, movies, furniture, clothing, jewellery, home improvement, pet supplies, toys, health and beauty, fitness and sporting goods, craft supplies, photo finishing, grocery and party supplies. Walmart has got around 2.3 million employees globally. For internationalization of the company, Walmart explored the market outside of US because the population of US was very small and it hindered the growth of the company. Other reasons for the expansion of Walmart were because of the market saturation and the limitations in the market. As stated by Hunt et al (2018), the advertising strategy adopted by Walmart was the ‘Promises of Low Price” and this attracted the international customers. The business strategy adopted by Walmart in each country was to have different names for the stores and to provide products of different quality according to the preferences of the local customers. The corporate strategy adopted by Walmart was to sell products of high quality at the lowest price.

 For the expansion of its market, Walmart chose the regions of Asia and Europe. For the expansion into the Asian region, the company must understand the cultural differences for achieving the success in that region. The cultural difference will play a major role in the growth and development of the company as well as for the management of the company.  For the effective expansion, a company must learn the ways of the general public and should get the idea about the perspective of life in that country. As stated by Yoder et al (2016), for doing business in a foreign country, one must know the behaviour styles, business practices, negotiating techniques and cultural values of the country in which the company is doing the business.  Walmart is expanding their business in the Asian countries in spite of the differences in culture for the promotion of the brand and for increasing the sales of the company. Companies like Walmart have their own set of cultures and therefore they faced difficulties adapting to the Asian culture which is completely different from the American culture. Internationalization is important for the growth and development of the company and the Asian market gives Walmart the needed opportunity because of its high population. Growth of the company was vital for meeting the expectations of the capital market and this can be done by increasing the profit and sales of the company. The expectations of the employees should be met as the employees are responsible for the development and growth of the company. This Report Deals with the various strategies and processes used by Walmart for the expansion in Asia will be discussed thoroughly for the better understanding of the readers. Lastly, the challenges and problems will be discussed that Walmart faced during the expansion of the company into the Asian market.

Internationalisation of Walmart


Internationalisation can be defined as the concept when a company moves its operations to foreign lands for increasing the sales and profitability of the company. The concept of internationalisation can be best understood by the approaches of internationalisation which are the economic approach, the behavioural approach and the relationship approach. As stated by Morgan (2017), the market imperfections should be exploited by the FDI for weakening the competition in the global market which increases the profit making of the company. This kind of advantage is necessary for the company as this helps to focus on the ownership factor and allows the company to successfully compete with the rival companies of the market. This is known as ownership advantage and this helps the company with the competition in the international market of Asia. It was known that the Asian markets had great hopes for the business of Walmart after the globalization in the year of 1991. On the other hand, the Asian market is geographically very distant and the most unique according to culture and logistics from the market of US. For setting the market in Asia, the company needs huge administrative and budgetary assets.  During the year of 1996, Walmart entered the Asian market and targeted China because the population of China is more than 1.2 billion and this increased the potential of Walmart as the purchasing power of the people of China is low. The geographical, linguistic and cultural difference of China is responsible for the high entry barriers. Walmart sold products of low price to the Japanese retailers Yaohan and Ito-Yokado and these products were market to Singapore, Malaysia, Thailand, Philippines, Japan, Indonesia and Thailand.

During the March of 2010, the official site of China's Ministry of Commerce detailed that Walmart had set up another entirely possessed auxiliary in Hebei. This move is reportedly intended to help Walmart's smooth development and restriction of Walmart in China. It is because of the high quality at low costs strategy that the company gained popularity among the consumers and attracted more clients. In this way, Walmart attracted more clients by reducing it costs and providing high quality products at such low prices. As stated by Kulke and Suwala (2016),  an insider from Walmart uncovered to the neighbourhood media that the organization will proceed to accelerate its extension in China in 2010 and in the future the Chinese market is required to have the most Walmart stores around the world, surpassing even its household American market. Mass retailers like Walmart attracted new clients as the clients can get bulk products in the same place. Walmart entered Taiwan in 1989 and made huge profits in the country. After that Walmart made collaboration with the Presidential Enterprise Corporation of Taiwan and offered a large range of products to the customers at low costs. Walmart expanded its business in Asia to address the issues of the customers in less time and cost. As stated by Stephens et al (2016), the main idea of Walmart is to provide products at low costs to the customers and for attracting huge number of customer that will eventually help with the growth and profit making of the company. Walmart invested billions in the expansion of its business in the Asian countries.

Strategies and processes used by Walmart for expansion into Asia


Since 1991, Walmart if functioning at a global level and it currently has stores operating in fourteen nations including Japan, China, Brazil, Canada, Mexico and other countries. The globalization of Walmart was done with the purpose of making profits and for the expansion of the company. Walmart applied the strategy of low costs and offered a large range of products in a single store adjusting stores and sold products in huge bulks. This strategy helped with the tough competition in the retail market. This placed the company in the highest position and the company made more profits than its competitor Carrefour that makes $ 120 billion on a yearly basis. As stated by Hunt et al (2018), the strategies adopted by Walmart for expansion in the Asian region was that they were clear about their goals in the Asian market and this attracted a lot of customers for the company. Organizations must show thought and care in managing social contrasts both inside and outside the association. Before rolling out improvements to enter another nation the organization must guarantee that their administration or item meets the nearby needs and needs of their clients. Administration in the organization ought to be vigorously moved by culture.  They defined their uniqueness in the market and this help with the expansion of the company. Walmart understood the unique local flavour of the customers and made the changes accordingly.

 Walmart was flexible in its activities and it listened to the feedback of the customers. Walmart got into a joint venture with a local company and benefitted from the talent and knowledge of the local company. As stated by Zentes et al (2017), Walmart respected and adapted to the local culture of Asia for the expansion in Asia. Walmart followed a well defined strategy of real estate and expanded its operations in Asia. The company also invested in the correct form of marketing and developed a strong infrastructure in Asia. Walmart developed a local management which is strong in nature and this also helped with the expansion of the company. Care should likewise happen in chief’s connection between the home and host nation as far as working practices. Firms should be touchy to culture in light of the fact that on the off chance that they don't it can cause fizzled joint ventures and also misconceptions, there social distinction need to regarded crosswise over fringes. The company recognized the local competition and took serious measures to counteract the threat of the competitors. Dialect issues, valuing troubles and culture crashes are normal, particularly before all else. The organization must have the capacity to deal with these troubles in a way that is fulfilling likewise for the other part. Errors can be hard to right and disregard for the remote culture can demolish the whole activity. The worldwide condition requires the worldwide organizations comprehend the way of life powers the shape the connection between the organization and its buyers.

Walmart has rapidly expanded during the 1980’s as because if the diversification of the company. The fundamental business principle provide fundamental business principles to provide high quality brand name merchandise at low prices in small towns. The key strategy of Walmart is to dominate the retail market and provide retailers the maximum discount. The particular strategy of Wal-Mart is corporate takeover, it puts the company at an advantage when it enters the business market. In one stroke it can be said the large competitors are demolished. It has a massive presencse in the targeted location.  The company builds up its familiarity and retains themselves to the old familiar outlets. Gradually, as the local Wal-Mart stores begin to make money, and local management assess their competition environment, the company begins to redesign the acquired stores to look like "Wal-Mart's, it then begins to build new and larger stores in that new market. 

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