Thought Of The Week

More Support for Global Expansion.

Front page of today's (August 14, 2009) Wall Street Journal has a story on how Wal-Mart is adapting its strategy globally after failing initially. This article is directly under another saying that the EU, Asia and India are all recovering from the recession ahead of the U.S. The U.S. remains mired in consumer no-confidence due to continued job losses, tight credit and a weak housing market.

Back to Wal-Mart. What have they learned that we all eagerly wish to hear? That you can’t force ideas germinated in Bentonville, Arkansas USA on the rest of the world. Who would have thunk it? I’m shocked. The “one size fits all approach” is being scrapped in favor of adapting to local tastes. Even local infrastructures where things like chronic traffic congestion in many foreign cities make the vast big-box store model inefficient are influencing local retail marketing adaptations.

Why does Wal-Mart bother? Well, Wal-Mart and most other uber-corporations recognize that flaccid domestic sales need a dose of Viagra they can only get from expanding globally. While Wal-Mart’s U.S. sales declined 1.2% in 2nd Q 2009, overseas sales increased 11.5% and profits rose 13%. Wal-Mart has 1,300 stores in 14 countries overseas and estimates it will be spending an additional 5.3 billion dollars on foreign expansion this fiscal year..

They have found that strategies from the U.S. don’t often transplant overseas but strategies developed overseas often can be transplanted into other foreign markets. Interesting!