Luciene De Paulo
In 1993, Wal-Mart had become America’s leading retailer, with net sales of $67 billion from its Wal-Mart stores, Sam’s Clubs, and Wal-Mart Supercenters. The Company had grown at a rate of 25% per year since 1990, and it was clear that to continue at its current rate of growth, Wal-Mart would have to seriously consider continuing its recent international expansion.
During 1992, Wal-Mart had entered into a joint venture with CIFRA, Mexico’s largest retailer, which currently operated 24 stores in Mexico and had plans to open 70 new stores by 1995. The Company had also recently completed the acquisition of 122 Woolco department stores in Canada. Each of these expansions had presented unique challenges for Wal-Mart to adapt its operations to suit local market demands, but Wal-Mart had successfully risen to the challenge. Given the Company’s successful track record, it seemed logical to continue to expand internationally.
If Wal-Mart didn’t expand internationally, David Glass, Wal-Mart’s CEO, felt that companies would start to come to the US and increase competitive pressures domestically. International expansion would drive growth and help in maintaining Wal-Mart’s dominant domestic position. Namely, entrance into foreign markets would force competitors to focus on their primary markets. If Wal-Mart planned to maintain its dominant position in the U.S., international expansion would not only drive growth, but it would also keep potential competitors trying to operate stores in their home markets rather than expanding into the U.S.1
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