This document provides an overview of Walmart's operations in developing countries in Latin America. It discusses Walmart's entry and growth in Mexico, Brazil, Argentina, and Costa Rica. In Mexico, Walmart has over 2,300 stores and is the largest private employer. In Brazil it has over 500 stores and is the 3rd largest retailer. Argentina has been more challenging with 94 stores due to lack of partnerships and supplier backlash. Costa Rica has 205 stores since entering in 2003.
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Managing Developing Countries: Walmart Latin America - GWU Spring 2013
1. Managing
–
Developing
Countries
Alex
Caffrey
Allison
Latham
Emily
Payamps
Hunter
Thomas
Kacey
Urlaub
Spring
2013
Walmart
Latin
America
2. Agenda
About
Walmart
Looking
to
Latin
America
Classifying
Countries
Drivers
of
Success
Moving
Forward
3. About:
Walmart
10,130
Stores
Worldwide
2.2
Million
Employees
$470
Billion
in
Revenue
27
Countries
69
Retail
Brands
4. Strengths
Weaknesses
Opportunities
Threats
Nonunionized
Employees
Point-‐of-‐Sale
Technology
Robust
Supply
Chain
Network
Supplier’s
Involvement
Competitors
Losing
Market
Share
High
Growth
Markets
New
Retail
Platforms
Expand
Cost
Leadership-‐Globally
Poor
Adaptability
“American”-‐
centered
business
model
Corporate
Governance
Economic
Recession
Various,
Local
Competitors
Government
Regulations
Shifting
Consumer
Tastes
5. Looking
to
Latin
America
¨ Diverse,
emerging
markets
¨ High
growth
opportunities
for
retail
sector
¨ New,
favorable
trade
systems
¨ Rising
consumer
incomes,
improved
education
¨ Stabilizing
economic
and
political
institutions
6. Looking
to
Latin
America
Chile
Costa
Rica
Brazil
Argentina
Mexico
0
25
50
75
100
Control
of
Corruption
Low
High
10. About:
Walmart
Mexico
¨ Significant
corruption
and
bribery
issues
¨ Expansive
market
with
varying
income
levels
and
consumer
preferences
¨ Early
entry
and
diverse
store
growth
¨ Strong
supply
chain
management
¨ Market
leader,
continuous
growth
¨ Key
economic
driver
for
Mexico
Challenges
Successes
Results
11. About:
Brazil
¨ Population:
200
million
¨ Unemployment:
6.2%
¨ GDP
per
capita:
$12,000
¨ Stock
of
FDI:
$595.9
billion
¨ Hyperinflation,
1994
People
Economics
Market
Issues
12. About:
Walmart
Brazil
Entry:
1995,
Acquisition
¨ Bompreco:
118
stores,
Northeast
Region
¨ Sonae:
140
stores,
Southern
Region
¨ Todo
Dia:
173
stores
558
Total
Retail
Units
3rd
Largest
Retailer
in
Brazil
22%
19%
31%
15%
13%
SuperCenter/Hypermarket
Supermarket
Limited
Assortment
Groceries
and
General
Merchandise
Other
13. About:
Walmart
Brazil
¨ Unique
Market
Tastes
¨ “Informal”
Market
Structure
¨ Acquisitions:
Local
Market
Savvy
¨ 10.2%
growth
during
Great
Recession,
compared
to
6%
in
Brazilian
retail
market
Challenges
Successes
Results
14. About:
Argentina
¨ Population:
42
million
¨ Unemployment:
7.2%
¨ GDP
per
capita:
$18,200
¨ Stock
of
FDI:
$100.4
billion
¨ Localized
Retail
Trade
Market
¨ Competition
from
European
Chains
People
Economics
Market
Issues
15. About:
Walmart
Argentina
Entry:
1995,
Greenfield
¨ Walmart
Branded
Stores
Super
Center:
30
stores
Super
Mercado:
4
stores
¨ Changomas:
41
stores
¨ Mi
Changomas:
9
stores
¨ Changomas
Express:
10
stores
94
Total
Retail
Units
32%
44%
11%
9%
4%
SuperCenter/Hypermarket
Discount
Compact
Hypermarket
Limited
Assortment
Discount
Supermarket
Groceries
and
General
Merchandise
16. About:
Walmart
Argentina
¨ No
local
partnership/knowledge
sharing
¨ Backlash
from
local
suppliers
¨ Corruption
and
regulatory
issues
¨ No
significant
successes
¨ Remains
an
unprofitable
venture
¨ Unable
to
win
over
consumers
¨ Specifically,
1/3
of
Argentinian
spending
is
on
food,
Walmart
captures
just
2.5%
Challenges
Successes
Results
17. About:
Costa
Rica
¨ Population:
5.6
million
¨ Unemployment:
7.9%
¨ GDP
per
capita:
$12,600
¨ Stock
of
FDI:
$18.59
billion
¨ Weak
institutions
to
support
business
¨ New
free-‐trade
zones
are
increasing
arrival
of
competitors
People
Economics
Market
Issues
18. About:
Walmart
Costa
Rica
Entry:
2003,
Partnership
¨ In
2009,
acquired
by
Walmart
Mexico
¨ Pali:
151
stores
¨ Max
o
Menos:
28
stores
¨ Maxi
Pali:
19
stores
205
Total
Retail
Units
Largest
Retailer
in
Region
3%
9%
14%
74%
SuperCenter/Hypermarket
Discount
Compact
Hypermarket
Supermarket
Limited
Assortment
19. About:
Walmart
Costa
Rica
¨ Very
low
income
consumers
¨ Supply
chain
and
distribution
¨ Centralized
operations
and
market
adaptability
¨ Walmart
has
maintained
high
sales
and
store
growth,
becoming
the
dominant
market
leader
Challenges
Successes
Results
20. About:
Chile
¨ Population:
17
million
¨ Unemployment:
6.4%
¨ GDP
per
capita:
$18,400
¨ Stock
of
FDI:
$179.9
billion
¨ Relatively
none;
Chile
is
one
of
the
most
stable
Latin
American
countries
People
Economics
Market
Issues
22. About:
Walmart
Chile
¨ Local
lawsuits
and
regulatory
concerns
¨ High
consumer
debt
¨ Established
supply
chain
network
¨ Strong
IT
and
infrastructure
development
¨ Exceptional
growth,
strong
private
labels
¨ Head
of
Walmart
Chile,
promoted
to
Chief
of
Walmart
Latin
America
Challenges
Successes
Results
23. Drivers
of
Success
¨ Acquisition
for
knowledge
sharing
¨ Localized,
smaller
store
formats
¨ High
growth
through
store
growth
¨ E-‐commerce
supports
multichannel
growth
24. Moving
Forward
¨ Joint
venture
or
acquisition
entry
strategy
¨ Adapt
to
consumer
tastes
¨ Replicate
supply
chain
management
program
¨ Create
higher
standards,
act
within
FCPA
framework
25.
Thank
you!
Alex
Caffrey
Hunter
Thomas
Allison
Latham
Kacey
Urlaub
Emily
Payamps
Spring
2013