There are also problems on the global platform for Walmart. As David Livingston, Principal, DJL Research asserts, “The biggest challenge according to me for Walmart is being able to open more stores without resistance from local governments.” As far as international presence is concerned, Walmart hasn’t gone through its best times in this regard during the recent past. The company had to sell-off its outlets in Germany to Metro (accepting the fact that the Walmart model would not run in the country), labour rights-suits issues in China, Bangladesh, Mexico, Brazil, Philippines and many more... However, the company has little choice when it comes to going global; it has to! Mark Linen, Consultant, Retail Technology Group clearly explains, “Walmart needs to allocate capital to the highest alternatives and nothing else. Generally, that means expansion outside the US, not within it. In other words, more locations in US would mean lower returns on investments for Walmart.” An analysis would prove that Walmart had blind trust in the low-cost model every time it entered a new market, with little regard for quality standards – the very fact that forced it to close stores in many countries.
However, there is good news for the giant too, especially in the near future as John Crossman, President, Crossman & Company puts it: “Walmart has opportunities to grow now as competition and land prices are decreasing, so they have more opportunities to sign more deals and expand...” So while many feel that Walmart should go back to the great old Sam Walton days, here’s something that would make well-wishers happy: Walmart has now changed its logo to something similar to the one it first used in 1962. Hopefully, this hyphen (‘-’) will be put to better use... to bridge the gap between Walmart and long-sustained margins!
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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