How Walmart Won

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Walmart is one of the world's most successful megacorporations. The superstore of the United States is famous for its cheap products, extensive selection, and value-based pricing. This business writing sample explores the methods Walmart used to win international success.

Walmart's international success

Whether one’s opinion about Walmart is positive or negative, the fact remains that everyone has an opinion. Walmart has spent decades branding itself as one of the world’s most lucrative and widely acknowledged names in corporate history. On a national level, Walmart has achieved a unique status among big box stores and.

With the addition of its supercenters in 1990, it is a constant leader in retail and grocery markets. While the level of success Walmart has achieved on a national level remains unmatched, it is the company’s international domination and its rank in the top ten of the Fortune 500 that leaves one wondering how they’ve managed to attain such a monumental level of fiscal fortitude.

Grocery market expansion

On the heels of their expansion into the grocery market, Walmart made the risky decision to go international with their company in 1991. The first step in this process was to begin a relationship with Cifra, the leading retailer in Mexico (Soderquist, 2005). However, as with any large business venture, the international expansion was not without its challenges.

The first hurdle was that “Cifra did not believe that every day low prices would work in Mexico. They were convinced that their customers were too accustomed to special pricing that showed up in the regular circulars [and] they did not want to depart from their high/low strategy” (Soderquist, 2005, p. 17).

It took several years for Cifra to embrace Walmart’s strategy for success, but when the compromise was finally met, Walmart’s Mexican sales saw a drastic increase. With this slight tweak in marketing, international Walmart stores were on their way to becoming as successful as their American counterparts.

Walmart's error in employing sweatshop labor

Another challenge in the Walmart success story arose when speculation began over Walmart’s participation in employing sweatshop labor. This concern among American consumers did not just linger around Walmart, but also other successful retail and clothing outfitters. The gray area of employing cheaper, international labor exists in the difference between American factory laws and factory laws of other countries.

As Fishman (2006) has playfully suggested, “if you could wiggle your nose and and transport a toy factory from China, or a tool factory from Bangladesh, and have it land in North Carolina, would that factory be legal here?” (p. 183).

The real and common sense answer here is a resounding “no.” Fishman (2006) added that, in most countries, their own laws aren’t even followed, let alone those set by the American standard.The truth about the American clothing industry is it is too expensive to manufacture these items domestically.

While many Americans may dissent against Walmart’s decision to outsource their labor, this decision is the only way for Walmart to maintain their signature low prices that continually draw consumers. The controversy ultimately resulted in a lawsuit, which Walmart defended by assuring its wide customer base that all international factories are closely monitored and, if they are caught doing business in unethical ways, Walmart will cut all ties.

How Walmart won

Despite their challenges, today Walmart holds its position as the number three Fortune 500 company. In 2010 alone, the company’s annual sales reached $419 billion. To put that into perspective, if Walmart were its own country, “it would be the world’s 25th largest in terms of gross domestic product (GDP), ahead of Norway” (Roberts, 2012, p. 2). For a company that started up with a single location in Arkansas, to rank higher than most of the world’s countries is an amazing feat.

While many dissenting Americans will always hold a somewhat negative opinion about Walmart due to its overwhelming status as a capitalist giant, the fact remains that Walmart “is the world’s largest commercial employer, and the second-largest employer in the world behind the Chinese military” (Roberts, 2012, p. 2). With its ability to maintain and increase international success mixed with the amount of jobs created by the company, it is safe to assume that Walmart will be a leader and a mainstay in the world’s economy of convenience.

References

Fishman, C. (2006). The Wal-Mart Effect: How the World's Most Powerful Company Really Works-- and How It's Transforming the American Economy. New York: Penguin Press.

Roberts, B. R., & Berg, N. (2012). Walmart: Key Insights and Practical Lessons From the World's Largest Retailer. London: Kogan Page.

Soderquist, D. (2005). The Wal-Mart Way: The Inside Story of the Success of the World's Largest Company. Nashville: T. Nelson.