Walmart Analysis For Expansion Into The Philippines ✓ Solved

Walmart Analysis For Expansion Into The Philippines 1walmart Analysis

Walmart Analysis For Expansion Into The Philippines Jocelyn F. Brooks BUS 621: Leadership & Teamwork Professor Michael Powers December 2nd, 2019

The Philippines has become one of the world’s fastest growing economies in recent years, making it an attractive destination for international business expansion, including that of retail giants like Walmart. The country’s efforts to promote foreign investment include establishing organizations such as the Philippine Exporters Confederation and the Bureau of Export Trade Promotion, along with favorable trade agreements through its membership in the World Trade Organization (WTO). Recent governmental reforms are increasingly facilitating foreign ownership, with potential relaxation of sector limitations that previously restricted foreign business management to within the Philippines. These reforms, coupled with participation in ecozones—zones that allow importation without customs duties—present significant advantages for Walmart’s entry strategy. The government’s emphasis on private sector development under President Duterte further enhances the country's appeal for foreign investors, creating an environment conducive to Walmart's expansion plans.

Entering the Philippine market requires strategic leadership that can adapt to its unique cultural, economic, and regulatory environment. Strategic leadership involves creating a compelling vision for the organization, motivating stakeholders, and guiding the company through complexities associated with international expansion. Effective strategic leaders in this context must possess attributes such as cultural sensitivity, resilience, and visionary thinking. Additionally, transformational leadership—focused on empowering employees and fostering innovation—will be vital once Walmart establishes itself, promoting long-term growth and adaptation to local market needs.

Cultural insights are essential to understanding how Walmart can succeed in the Philippines. According to the GLOBE study, Filipino culture exhibits high uncertainty avoidance—indicating a preference for formal procedures and resistance to change. It also features high power distance, with societal hierarchies and resource inequalities strongly emphasized, and high in-group collectivism, underscoring loyalty and strong familial and community ties. In contrast, low institutional collectivism and gender egalitarianism suggest individualistic tendencies and gender role distinctions, respectively. Filipinos are highly assertive, value future planning (high future orientation), and prioritize performance and achievement while demonstrating high humane orientation—care and concern for others (Northouse, 2018). These cultural dimensions demand that Walmart adopts leadership styles that are respectful of hierarchies, community-oriented, and ethically driven.

To navigate these cultural nuances successfully, Walmart leadership must incorporate culturally aware practices, including effective communication, relationship building, and network development with local Filipino leaders. Building trust and networks will facilitate smoother market entry and help anticipate potential challenges. Leadership skills such as positivity, trustworthiness, creativity, and adaptability are critical. A positive outlook will help manage uncertainties, while trustworthiness will foster employee and stakeholder confidence. Creativity is necessary to develop marketing strategies suited to Filipino cultural preferences, which are shaped by high collectivism, high assertiveness, and high future orientation.

Understanding Philippines’ economic data reveals a large, young population with over 108 million residents and a median age of 24.4 years, providing a broad consumer base for Walmart. The country’s robust economic growth, driven by infrastructure development and trade, indicates increasing purchasing power and market opportunities. The high levels of uncertainty avoidance and high power distance require Walmart to implement meticulous planning, formal procedures, and respectful hierarchical structures. Conversely, high performance orientation and humane orientation underscore the importance of delivering quality, competitive products, and caring customer service, aligning well with Walmart’s operational strengths.

Applying the GLOBE cultural dimensions, Walmart must be adaptable to the high uncertainty avoidance and high power distance it will encounter. Emphasizing formal communication, respectful engagement with local authority figures, and community involvement will be instrumental. Moreover, leveraging the Filipino value of strong in-group loyalty could assist Walmart in establishing brand loyalty and community trust. By actively participating in local social initiatives, Walmart can foster goodwill and demonstrate genuine commitment to Philippine society.

Furthermore, Walmart’s expansion must address specific local challenges, such as navigating classification issues of gender roles and managing aggressive competitive strategies consistent with high assertiveness. Tailoring marketing campaigns to reflect Filipino cultural values and emphasizing ethical business practices will also be necessary. Investing in local workforce development, training, and culturally sensitive management practices will enhance operational effectiveness and employee retention.

In conclusion, Walmart’s successful expansion into the Philippines hinges on employing strategic and culturally sensitive leadership. Leaders must demonstrate adaptability, foster trust, and build networks while aligning business strategies with local cultural dimensions. Combining meticulous planning, community engagement, and innovative marketing strategies tailored to Filipino societal norms and preferences can position Walmart as a formidable retailer in the Philippines. By understanding and respecting cultural differences, Walmart not only ensures compliance but also builds a sustainable presence that contributes positively to the Filipino economy and community.

References

• Northouse, P. G. (2018). Leadership: Theory and Practice. Sage Publications.
• Veem, P. (2017). 5 Ways the Philippines is Attracting International Trade. Philippine Business Review.
• Heritage Foundation. (2019). Philippines Economic Data. The Heritage Foundation.
• Hofstede Insights. (2021). Country Comparison: The Philippines. Hofstede Insights.
• McCall, M., & Hollenbeck, G. (2002). Developing Global Executives: Lessons of International Experience. Harvard Business Review.
• Northouse, P. G. (2018). Leadership: Theory and Practice. Sage Publications.
• Virkus, S. (2009). Leadership Dimensions: Culture and Leadership. Journal of Cross-Cultural Management.
• Worstall, T. (2017). Walmart Expands into India: Opportunities and Challenges. Forbes.
• Worldometers. (2019). Philippines Population Data. Worldometers.
• GLOBE Project. (2016). GLOBE Results for the Philippines. University of Minnesota.