Summary: Wal-Marts Painful Lessons

The article "Wal-Mart's Painful Lessons" explains how Wal-mart's future success depends on whether the company learns from past mistakes and how quickly it adapts to shifting trends in foreign markets. The article covers four foreign markets outside North America that Wal-Mart has tried gaining entry into and outlines the strategies the company plans on takingin order to do so. In Japan, Wal-Mart has made many changes, including closing 20 stores, removing in-store butchers and increasing the number of meals-to-go. However, the biggest change was making the transition from weekly specials to "everyday low proces". Progress has been slow, but baby steps are being taken towards improvement. Russia and India are two of the fastest growing retail markets in the world, but they are also regarded as the two most frustrating for foreign retailers. After five years, Wal-Mart has only one outlet in India and a 30 person development office in Russia. Recently, Wal-Mart joined with Bharti Enetrprises to open a cash-and-carry operation in northern India, catering to merchants and small businesses. However, with little experience and background in the type of merchandising and retailing done at Wal-Mart, employees have much to learn. While Wal-Mart plans to open 10 to 15 stores in Russia, it will probably start by acquiring a local retailer. In Chile, Wal-Mart has acquireed a 75% stake in a local company called D&S, which turned out to be a very smart move. Instead of entering the market alone, as many other companies have tried to do and failed, Wal-Mart has kept close ties to D&S over the last decade. They have increased D&S's expansion budget from $150 million to $250 million, most of which will go towards opening 70 new stores this year. On its way to taking over the world retail market, Wal-Mart must make sure it employs lessons learned from past mistakes into future plans.