UNIVERSITY / INSTITUTE: Purdue University
CLASS / COURSE: MGMT 38000
MGMT 38000 INTERNATIONAL BUSINESS
CASE 5 WAL-MART JAPAN WORLD’S LARGEST RETAILER CAN’T MAKE A YEN
Wal-Mart entered the Japanese market in 2002 with a minority stake in the Japanese retailer, Seiyu, hoping to duplicate its success that started in the United States in the world’s second largest economy. Japan has a population of 127 million, and a very high disposable income level. Wal-Mart has demonstrated strong commitment to the Japanese market by an additional $1 billion in order to acquire a 51% stake in Seiyu. In 2007 Wal-Mart increased its ownership through an additional investment of approximately another $1 billion to acquire 95.1% ownership of Seiyu. The company also has a plan for control of the remaining shares. Wal-Mart felt that additional ownership would allow for greater flexibility and more rapid decision making, independent of its Japanese partners. Wal-Mart’s investment in Japan represents a significant part of the company’s overall international presence strategy. While Wal-Mart has been very successful in other international markets, including Mexico and China, it has not been very successful in Japan. Wal-Mart has yet to earn a profit from its 393 Japanese stores. .................
1. Do you think Japan is a good market for Wal-Mart? Explain.
2. What were the most significant mistakes Wal-Mart made in Japan?
3. What suggestions do you have for increasing the financial performance of Seiyu?
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SUBJECTS / CATEGORIES:
2. Strategic Business Management