Management Strategies Wal-Mart should undertake for Successful Global Presence





Management Strategies Wal-Mart should undertake for Successful Global Presence





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Management Strategies Wal-Mart should undertake for Successful Global Presence


Decrease in government restriction resulted in increased opening up of the China retail market. Global retailers such as Wal-Mart took advantage and opened store in China. Though Wal-Mart started as a small, store in Arkansas, it spread rapidly and dominated the retail sector in United States. Wal-Mart’s founder, Walton, believed that discounting was crucial in retail business. He opened stores in neglected areas and sold goods at considerably cheap prices (Glass, 2012). The use of “Everyday low prices” gave Wal-Mart a competitive advantage over its competitors. Additionally, Wal-Mart developed a strong marketing culture such that it remained popular even when its competitors, Kmart and Woolco, closed down. However, Wal-Mart’s entry into China was not successful. This paper focuses on human resource management strategies that Wal-Mart must undertake and support to create a successful global presence to ensure the success of an organization in meeting its goals and mission. The paper will mainly focus on what Wal-Mart requires to do to gain acceptance in China.

China opened up its market for foreign retailers in 2005, which Wal-Mart saw as a great opportunity. This is because China’s thriving economy provided a great opportunity for profitable retailing. Despite Walton’s insistence on discount prices, Wal-Mart remained less popular in China (Farhoomand & Wang, 2006). One of the main drawback was the resignation of Cassian Chueng, the president of Wal-Mart China, which happened at the time when the entry plan was at the initial stages of implementation. Irrespective of being the world largest retailer, Wal-Mart is ranked at position twenty in China in terms of its sales (Glass, 2012; Wang, & Jha, 2011).

Issues Surrounding Wal-Mart

One of issues facing Wal-Mart is managements’ refutation of employee’s unionization. Sam Walton opposed formation of union by War-Mart employee’s rights from the initial stages. The company management preferred employees to freely report directly to the management in case of any problems. There were cases of closure of stores where employees attempted to unionize. The Wal-Mart employees have attempted to demand for salary increment and they feel that such grievances have not been clearly addressed (Wang, & Jha, 2011). To create a successful global presence and ensure the success of Wal-Mart in meeting its goals and mission, the management must address the issue of Unionization. This issue has been criticized strongly, which could affect Wal-Mart performance. Additionally, the success of any organization greatly depends on the level of satisfaction among the employees. It is thus inevitable that Wal-Mart should consider accommodation unionization to ensure the employees’ grievances are addressed accordingly (Glass, 2012; Farhoomand & Wang, 2006).

Another issue that has affected Wal-Mart’s entry into China is their expansion strategy. In United States, Walton preferred opening stores in small towns, which gave Wal-Mart a competitive advantage. However, Chinas economic growth is more rampant in large cities, particularly those along the coastal region. It is thus significant for Wal-Mart to reconsider the positioning of its store in China. Although there are existing barriers such as resistance from China authorities to let Wal-Mart expand in large cities, the management should consider forming venture in such regions (Glass, 2012; Farhoomand & Wang, 2006).

An alternative that would enable Wal-Mart to retain cheap prices and expand its operations would be to change their marketing strategies. The US market environment is quite different from that of China. This is mainly due to cultural differences. Wal-Mart should thus consider exposing its employees to Chinese culture to understand the needs of their consumer appropriately. As opposed to US where the Wal-Mart stores were close to each other, the store in China are quite far from each other. Wal-Mart management requires coming up with way of reducing the transportation cost. This could be by considering opening other stores in nearby towns to reduce the operation costs. One factor resulting in increased transportation cost is the poor communication network between Wal-Mart management and their stakeholders such as the suppliers. This makes it hard for Wal-Mart to obtain its supplies in time. As opposed to US, where Wal-Mart used satellites to trap its sales and for real time communication, satellite usage in China is prohibited. It is thus important for Wal-Mart management to considerer other electronic communication options to link their different store in China to the suppliers. Use of fax in some of the store is not effective enough (Glass, 2012).

Although Wal-Mart tries to provide high quality goods, the Chinese consumers are extremely vigilant on quality. This has made it hard for Wal-Mart to retain the extreme quality at low costs. Wal-Mart management should thus consider ways of regulating their cost but ensure they do not compromise on the quality, which is more important to Chinese consumers as compare to those in Wal-Mart’s home market (Glass, 2012).


Wal-Mart is one of the largest retailers with several stores across the globe. The recent entry into China was not very successful. Some of the factors that hampered the expansion of Wal-Mart in China include poor communication between the different stores and supplies. Additionally, the Chinese consumers were not welcoming towards Wal-Mart. The demand for high quality goods by Chinese consumers poses a threat to Wal-Mart culture of offering goods at low prices. Wal-Mart Management should consider changing their marketing strategies to enable expansion.



Farhoomand, A., & Wang, I. (2006). Wal-Mart Stores: “Everyday Low Prices” in China. Havard Business Review, 1-26.

Glass, D. (2012). Wal-Mart Stores: “Every Day Lowprices” In China. Retrieved from Harvard Business School

Wang, W., & Jha, I. (2011, Jan 5). Walmart and Carrefour in China. Retrieved from International Retailing Education and Training (IRET):



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