Abstract

US based Wal-Mart, the world’s largest retailer, entered Brazil in 1995 by forming a 60:40 joint venture with one of the country’s leading business conglomerates, Grupo Garantia. After entering Brazil, Wal-Mart encountered several operational problems during the initial years, due to which its expansion plans went awry. Wal-Mart then realized that most of these problems were due to the company’s effort of replicating the basic store format prevalent in the US in Brazil and its failure to understand the needs of the local markets. The case discusses how after the initial problems, Wal-Mart planned and implemented new strategies that included acquisitions, new store formats, bringing in experienced store personnel, etc. It also highlights the challenges Wal-Mart faced due to adverse economic conditions in Brazil.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Examine Wal-Mart's entry and expansion strategies in international markets.
• Study the operations of Wal-Mart in Brazil.
• Understand the localization strategies adopted by Wal-Mart in Brazil.
• Analyze the challenges faced by Wal-Mart in Brazil due to adverse macro-economic environment.

Keywords

Wal-Mart, Brazil, Retail in Brazil, Carrefour SA, Sam's Club, Supercenter, Grupo Garantia, International Operations, Lojas Americanas, Localization, In-store Designs, Todo Dia, EDLP Philosophy, NAFTA, Inventory Management, Management Turnaround, Global Economic Slowdown, Brand Loyalty, Brazilian Culture, Retail Formats, Brazilian Retail Environment