Wal-Mart's Foray in Brazil

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Case Details:

Case Code : BSTR332
Case Length : 17 Pages
Period : 1995-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Wal-Mart Stores Inc.
Industry : Retail
Countries : Brazil

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Wal-Mart entered Brazil in 1995 through a joint venture with a local retailer. Its intention was to recreate the success it had achieved earlier in Mexico, the first Latin American country that the company had entered. However, Wal-Mart Brazil faced challenges like frequent 'out of stock'situations and inability to stock the right merchandise mix in the stores.

It also faced problems due to the formats of some of its stores, as the Brazilians did not find them suitable. Moreover, Wal-Mart Brazil faced stiff competition from local retailers as well as from French retailer Carrefour SA³ (Carrefour) in Brazil. The company also had to bear the effects of an unstable Brazilian economy in the late 1990s.

In the first decade of its operations in the country, Wal-Mart opened only 25 stores in the country. However, after the stabilization of the Brazilian economy in 2004, Wal-Mart began expanding aggressively in the market. In 2004 and 2005, Wal-Mart Brazil acquired two retail chains that consolidated its position in the country.

Excerpts >>

3] France-based Carrefour is the second largest retail group in the world after Wal-Mart. In 2007, its revenue was at € 82.15 billion and profit was at € 1.868 billion. Carrefour entered Brazil in 1975 and as of 2008, was the second largest retailer in the country.

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