1. How does expanding internationally benefit Wal-Mart?
Ans Wal-Mart was able to exercise economies of scale. Its suppliers had no choice but to lower costs because Wal-Mart was demanding more product and quantity. Its employee base grew by 500,000 and its profit increased. Wal-Mart also learned new techniques from doing business in other countries.
2. What are the risks that Wal-Mart faces when entering other retail markets? How can these risks be mitigated?
Ans That the local retail stores already know the market and have mastered it, leaving Wal-Mart with no chance to be successful. Wal-Mart needs to study the other businesses, join them, or buy them out.
3. Why do you think that Wal-Mart first entered Mexico via a joint venture? Why did it purchase its Mexican joint venture partner in 1998?
Ans Wal-Mart did not want to risk starting on its own in a foreign market and failing. Wal-Mart knew that it could do better on its own and buying up the market is a good strategy for that.
4. What strategy is Wal-Mart pursuing—a global strategy, localization strategy, international strategy, or transnational strategy? Does this strategic choice make sense? Why?
Ans Transnational Strategy: this makes sense because Wal-Mart used its economies of scale to force suppliers to lower costs, Wal-Mart studied the local markets, and Wal-Mart learned new ways of doing business and making profits.