Pressure to GlobalizeThe U.S. markets have been saturated for the past couple of years,prompting Walmart to take global measures to expand their operations. However,they’re internationalization strategy has been in vain as Walmart have failedto capitalize on certain markets and reflect their presence globally. As shown above, the operating income in U.

S. has been gradually increasing,however, the operating income overseas has slowly begun declining as of 2014.Walmart’s operating margin is even more concerning, showing a drastic declinefrom 2013 onwards.

(Hoium, 2014) Even though Walmart has been stable and growing in the U.S. markets, ithas been highly unsuccessful in translating their dominance on a global scale.  Barriers to Entry in Foreign MarketsIt’s always been a challenge for retailers when it comes to globalization,not only Walmart but Carrefour in China, Tesco in the U.S., Target in Canada,etc.

Failure to adapt to the local market, and rigid regulations againstforeign investment have been the major contributing factors for failure formany of these multinationals. Haing to highlymodify their supply chain, suppliers and procurement strategy in each countryto meet its regulation and policies, these organization face a higher risk thanreward.  Local Consumers Beliefs and Attitudes In emerging markets, organized retailing is usually fragmented, andretailing is done mainly through the locals. Furthermore, foreign entrants failto provide something new and innovative to attract local customers. In fact,customers find it more challenging than convenient to shop from these stores,due to its locational inconvenience and poor customer orientation. They prefersmaller local shops with narrow product lines providing exactly what the clientneeds.

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On the other hand, in developed markets, consumers perceive thesemultinationals as premium players with quality products, and thereforecustomers feel more satisfied and comfortable purchasing from these globallyknown retailers. Hence Walmart wasunable to emulate its success in other foreign emerging markets.