BUS240 International Business Final Group Project – A Failed

BUS240 International Business Final Group Project – A (Failed) Case Analysis and Recommendations

The final group project involves selecting a failure case of an international brand and analyzing the reasons behind its struggles or failure in the global market. Teams of 5 to 6 members will choose a specific company and explain why it faced challenges internationally, supported by secondary data. The project requires a strategic marketing management investigation, utilizing theories and models learned in class, to evaluate the company's current situation, identify issues, and develop a new global marketing plan aimed at achieving specific objectives. Deliverables include a detailed report with situational and SWOT analyses, strategic recommendations for product, pricing, distribution, and communication, budgeting considerations, and an emphasis on implementation feasibility. Additionally, a persuasive PowerPoint presentation should be prepared to convey the plan's value to a board of directors, highlighting critical aspects and gaining management approval. Group members must specify their contribution percentages, and supplemental materials such as brochures or newsletters are encouraged to enrich the project. The budget for marketing activities is set at CAD 90,000 for the first year and CAD 70,000 for the second year. The project will be evaluated based on data quality, analytical depth and creativity, application of course concepts, and practical implementation. Final submission includes the report, presentation, and group contribution details.

Paper For Above instruction

The case of Walmart’s failure in Brazil exemplifies the complexities multinational companies face when expanding into emerging markets. Walmart, a leading American retail giant, entered Brazil in 1995 through acquisitions, aiming to capitalize on the country's growing consumer base. However, numerous operational, cultural, and strategic challenges contributed to its decline, culminating in the company's decision to sell its outlets in 2018. Analyzing this failure provides valuable insights into international market entry strategies and the requisite adaptation to local consumer preferences and regulatory environments.

Current Global Marketing Situation

Walmart’s entry into Brazil was initially viewed as a promising expansion. However, by the mid-2000s, it faced significant hurdles. The local retail landscape was dominated by traditional hypermarkets and small convenience stores, with consumers valuing personalized service and local products. Walmart's standardized approach, emphasizing low prices and efficiency based on American retail formats, did not resonate fully with Brazilian consumers. Consequently, Walmart struggled to build a loyal customer base, often perceived as an outsider with a lack of understanding of local shopping behaviors.

Moreover, Walmart encountered intense competition from existing local players such as Carrefour and local supermarket chains, which had a more entrenched presence and better relationships with suppliers and consumers. Operational issues, including supply chain inefficiencies and difficulties in adapting to local regulatory standards (such as labor laws, taxation, and import tariffs), further hampered its growth prospects. These challenges underscored the importance of localized strategies and cultural intelligence in international business expansions.

Situational Analysis (PESTLE)

Political factors included Brazil's complex regulatory environment, high tariffs, and frequent policy changes affecting foreign investment. Economically, Brazil faced inflation and currency fluctuations that affected pricing strategies and profitability. Sociocultural factors revealed a preference for local products and shopping experiences emphasizing service and community engagement. Technological factors highlighted the increasing importance of digital retailing, which Walmart struggled to leverage effectively in Brazil. Legal aspects involved labor laws and compliance standards that Walmart had difficulty navigating. Environmental considerations included sustainability initiatives that local consumers increasingly valued, demanding more environmentally friendly practices.

SWOT Analysis

• Strengths: Strong global brand recognition, extensive supply chain network, economies of scale.
• Weaknesses: Lack of cultural adaptation, insufficient local market knowledge, operational inefficiencies.
• Opportunities: Growing middle class, online retail expansion, partnerships with local suppliers.
• Threats: Intense local competition, regulatory hurdles, economic volatility.

Objectives and Issues

The primary objective was to establish Walmart as a leading grocery and retail provider in Brazil, focusing on customer-centric strategies and supply chain improvements. Key issues identified were poor market fit, inadequate adaptation to consumer preferences, and regulatory challenges. Secondary data indicated an increasing trend towards online shopping, which Walmart needed to capitalize on to regain competitiveness. Supply chain limitations and inconsistent service quality were additional bottlenecks to its market penetration.

Global Marketing Strategy

Product

Develop a localized product mix emphasizing Brazilian preferences, including fresh produce from local farmers, culturally relevant packaged goods, and a mix of urban and rural offerings.

Pricing

Implement dynamic pricing strategies considering local purchasing power, with promotional discounts tailored to Brazilian shopping habits and festivals.

Distribution

Enhance distribution channels through investments in supply chain infrastructure and partnerships with local suppliers to ensure product freshness and availability.

Communication

Adopt culturally sensitive marketing campaigns utilizing local languages and media channels. Leverage digital platforms for targeted advertising and consumer engagement, emphasizing Walmart’s value propositions tailored to regional needs.

Budgets

The marketing budget is allocated at CAD 90,000 for the first year, focusing on digital marketing, local advertising, and supply chain enhancements. The second-year budget is CAD 70,000, emphasizing customer loyalty programs and online sales platform development.

Recommendations

Opportunities include expanding e-commerce capabilities, developing partnerships with local SMEs, and customizing store formats for different regions. Challenges involve navigating Brazil’s complex regulatory landscape and overcoming consumer trust issues. Implementing localized strategies and investing in community engagement will be essential in overcoming these challenges and revitalizing Walmart’s presence in Brazil.

Conclusion

Walmart’s failure in Brazil underscores the importance of cultural adaptation, local intelligence, and flexible strategies in international expansion. A renewed focus on localization, digital transformation, and stakeholder collaboration can turn around Walmart’s fortunes in Brazil, transforming it into a competitive regional player.

References

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