WALMART: United Kingdom

In 1965, Asquith and Diaries joined forces to become ASDA. In 1999, ASDA was acquired
by Walmart, and in recent years has grown to become British second largest supermarket.
Walmart entered the U.K market on June 1999 by acquiring ASDA Group PLC, Britain’s third
largest food retailer. Walmart offered £6.7 billion ($10.8 billion). The cash deal, which topped a
rival bid from the British retail group Kingfisher PLC, was predicted to double Walmart’s
international business at a stroke and put it in a position to expand its retailing expertise
throughout Europe.

What factors and conditions influenced Wal-Mart to select the entry mode it used to enter
each of the four countries? (25 points)

Transport costs, trade barriers, political risks, economic risks, business risks, cost and firm strategy
influences entry mode choice. Entry mode choice of mode is dependent on the situation faced by the
firm. Optimal choice of mode is linked to firm strategy and core-competency.
Walmart operation in different countries and region, we can notice that Walmart in North
America or the English speaking countries is doing well. For instance, countries like Mexico, Canada,
United Kingdom and Central America. Some countries like Germany, Japan, and South Korea were
struggling. One of the factors to before they enter in a country is the Language.
According to Walmart, Germany performed poorly since consumers were loyal to their
favorite an environmental impact such as location and labor union and regulation on pricing. In the
market Korea, customers prefer oriented different product and service, unlike the Japan market style.
Also, Japan's product did not match the quality as domestic, which led to cost too high, unlike the
Americans Walmart strategy so another factor will be the cultural differences must take into
consideration.

In your view and given your understanding of our discussion last March 2020, what made
each country-specific entry mode superior to the other entry modes? (25 points)
Walmart used successfully were the acquisition. I believe the acquisition is the best
because the company bought has a brand in the local area and when combined with the Walmart
powerful brand influence made a huge impact. Most regions where Walmart used acquisition as the
market entry, the acquired stores fast build the presence of the market for the retail hence increasing its
market share as it reduced the competition stronghold.

In general Acquisition is the superior mode of entry, first they are quick to execute. By acquiring
an established enterprise, a firm can rapidly build its presence in the target foreign market.
Second, in many cases firms make acquisition to pre-empt their competitors. The need for pre-
emption is particularly great in markets that are rapidly globalizing. Third, managers may
believe acquisitions to be less risky than other kind of mode of entry.

Sources: https://nscpolteksby.ac.id/ebook/files/Ebook/Business%20Administration/Global
%20Marketing%20Management%20(2010)/Chapter%209.pdf
http://mba.teipir.gr/files/3_Wal-Mart.pdf
https://www.researchgate.net/publication/46509255_The_impact_of_Wal-
Mart's_entry_into_the_German_and_UK_grocery_markets
https://www.youtube.com/watch?v=S5pd7TVsHC4