Wal-Mart in Japan



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Code : COM0001

Year :
2003

Industry : Retailing

Region : Japan

Teaching Note:Available

Structured Assignment :Available

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Introduction:Wal-Mart, USA's No.1 retailer since 1990, forayed into international markets for the first time in 1991 through a joint venture with 'CIFRA S.A. de C.V', the then leading retailer in Mexico. This was followed by its entry into Puerto Rico in 1992. To manage its international operations, the 'Wal-Mart International Division' was formed in 1994. Since then, Wal-Mart had entered Canada (1994), Argentina (1995), Brazil (1995), Mainland China (1996), Germany (1998), Korea (1998) and UK (1999). By 2000, the retail chain had 1,100 stores in nine countries outside the US that generated revenues of $32 billion and contributed 17% to its $191 billion annual sales. Although sales growth in the US was flattening out, Wal-Mart's international sales grew by 10.5% in 2001 to $35.5 billion with an operating profit of $1.46 billion. By December 2001, Wal-Mart bypassed 'General Electric' (GE) of the US with sales of $216 billion to become the second-largest company in the world (in terms of revenues) after 'Exxon Mobil'. As Wal-Mart believed in double-digit sales and profit gains year after year, it decided to expand rapidly into international markets to avoid the risk of concentrating only in the US. Japan, with a $1 trillion4 retail market, the second largest in the world5 after the US, proved to be the next obvious international destination for Wal-Mart. On March 14th 2002, Wal-Mart announced its foray into Japan.

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