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Japan. in 2003, Walmart Decided To Penetrate The Asian Market Starting With Japan. Walmart

Walmart used a strategic alliance with Seiyu as its mode of entry into the Japanese retail market because introducing its highly American-based culture would not be favorable for the Japanese market where consumers buy goods in small quantities and favor fresh products. Walmart was also able to enter the Mexican retail industry through a strategic alliance by entering a joint venture with CIFRA, Mexico's largest retailer, during a period when the Mexican government was encouraging foreign direct investment. Partnering with CIFRA helped Walmart combat challenges in the newly opened Mexican market like cultural differences and uncertainties investing due to CIFRA's local knowledge.

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51 views2 pages

Japan. in 2003, Walmart Decided To Penetrate The Asian Market Starting With Japan. Walmart

Walmart used a strategic alliance with Seiyu as its mode of entry into the Japanese retail market because introducing its highly American-based culture would not be favorable for the Japanese market where consumers buy goods in small quantities and favor fresh products. Walmart was also able to enter the Mexican retail industry through a strategic alliance by entering a joint venture with CIFRA, Mexico's largest retailer, during a period when the Mexican government was encouraging foreign direct investment. Partnering with CIFRA helped Walmart combat challenges in the newly opened Mexican market like cultural differences and uncertainties investing due to CIFRA's local knowledge.

Uploaded by

kyla christine
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Japan. In 2003, Walmart decided to penetrate the Asian market starting with Japan.

Walmart

used strategic alliance with Seiyu as the mode of entry in the Japanese retail market. It is a wise

strategy for the American firm because introducing Walmart and its highly American-based

culture will not be favorable for the Japanese market.

Contrary to the American culture, the Japanese consumers do not buy goods in big bulks and

instead tend to buy goods in small quantities. The locals avoid unnecessary purchase and favor

fresh products. Also, the market culture in Japan tend to view high price as an index of high

quality. Therefore, if Walmart decided to do a different mode of entry such as establishing its

own brand and physical store in Japan, its philosophy of bulk purchasing in low prices is not

aligned with the buying behavior of Japanese market (Ito, 2019).

Mexico. Walmart was able to enter the Mexican retail industry through strategic alliance by

entering a joint venture with CIFRA, the country’s largest retailer. During the 1980s, the

Mexican government was encouraging foreign direct investments in their country by dismantling

the excessive trade barrier impost to foreign investors.


This government movement influenced Walmart’s penetration of the local market. However,

different conditions in the country posed challenges such as the uncertainties attached to

investing and managing operations in a newly opened market (Hecht & Morici, 1993) and

cultural differences of Mexican consumers. Therefore, Walmart chosen entering into a joint

venture with CIFRA to combat the challenges present in the expansion. It was a preferable mode

of entry because CIFRA already has the local knowledge about local consumer behaviors. In

return, Walmart was able to incorporate the innovative supply chain and other applicable

operation practices it has in its home country, the US.

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