Walmarts Path To Philippines

Unlock access to all the studying documents.

View Full Document

Walmart’s Journey to the Philippines

Robin Park

BUS:621

Professor William Woods

Oct 14, 2019

Walmart’s Journey to the Philippines

With companies that expand outside of the United States market comes strategic

planning, cultural adaptation, and globalization. One company that boasts international economic

uncertainty is the retail giant Walmart. Expanding out to the global market has been a learning

experience for Walmart. With “over 11,300 retail units under 58 banners in 27 countries and

eCommerce websites in 10 countries,” [they] “employ approximately 2.2 million associates

around the world – 1.5 million in the U.S. alone.” (Walmart, 2019). But it was not always

rainbows and butterflies when expanding to the international markets. This became apparent

from the four countries Walmart pulled out from (India, Russia, Germany, and South Korea) all

for different reasons. In order for Walmart to expand to another country, they will have to learn

from their past in order to move forward. We will use the Philippines as the next stopping ground

for Walmart to expand its market. Walmart must adapt to their surroundings and be open to

change where it is needed for them to establish a presence in the Philippines.

When making decisions to expand, there must be excellent leadership decision making

involved. There are a few leadership styles that come to mind. The first style is the Adaptive

Leadership. “As the name of the approach implies, adaptive leadership is about how leaders

encourage people to adapt—to face and deal with problems, challenges, and changes. Adaptive

leadership focuses on the adaptations required of people in response to changing environments.

Simply stated, adaptive leaders prepare and encourage people to deal with change.” (Northouse,

2018). A way to learn about Adaptive Leadership is by analyzing the markets Walmart did not

succeed in. The four countries Walmart pulled out of were all due to different non-adaptive

reasons.

The other leadership style is Transformational Leadership. “As its name implies,

transformational leadership is a process that changes and transforms people. It is concerned with

Walmart’s Journey to the Philippines

emotions, values, ethics, standards, and long-term goals. It includes assessing followers’ motives,

satisfying their needs, and treating them as full human beings. Transformational leadership

involves an exceptional form of influence that moves followers to accomplish more than what is

usually expected of them. It is a process that often incorporates charismatic and visionary

leadership.” (Northouse, 2018). The tricky part to this when expanding into other countries is not

to transform the follower’s mindset to your beliefs, but to adapt to their mindset first. You really

create a connection to thoroughly understand the follower’s perspective, from behavior, culture,

values and surrounds. We cannot assume that the formula that built Walmart is going to have the

same level of success in a foreign territory but applying both these leadership styles will help

them move forward.

Analyzing the four countries that Walmart were not able to succeed in will gives us a

different perspective on how to move forward in the Philippines. India is the third-largest

economy in Asia, so how does a retail giant like Walmart pull out in this country? “Wal-Mart

faces several obstacles in India. This week, it cut ties with its Indian partner, Bharti Enterprises.

The country would also require 30% of products to be sourced from small and medium Indian

businesses, which the company called a “critical stumbling block,” Berfield reports. The Indian

government is also investigating Wal-Mart for allegedly violating foreign retail investment

rules.” (Lutz, Oct 11, 2013). In Russia, Walmart needed to acquire and adopt a local chain but

was not able to do so. This resulted in them staying in Russia for six years without a single store

opened. Germany was a great example of why Adaptive Leadership was needed. There were no

exact reasons why Walmart opted out of Germany, but there were cross-cultural idiosyncrasies.

“Walmart employees are required to start their shifts by engaging in group chants and stretching

exercises, a practice intended to build morale and instill loyalty. Fiendish as it sounds, Walmart

Walmart’s Journey to the Philippines

employees are required to stand information and chant, “WALMART! WALMART!

WALMART!” while performing synchronized group calisthenics.” (Macaray, 2017). The way

that South Korean’s traditionally marketed products were different as well. “Wal-Mart and

Carrefour sold products by the box, while E-Mart and Lotte built eye-catching displays and hired

clerks who hawked their goods with megaphones and hand-clapping.” (Choe, 2006). All of these

past experiences are a good learning lesson to create a culture that fits the Philippines. Culture is

created within a group or organization, so building a strong foundation allows growth.

Starting Walmart in the Philippines you have to learn to have a tremendous cultural

vision within the organization. A person without a set goal or vision is like guiding someone

through a race without a finish line. Once that foundation is built, you can involve your company

culture around it and create Cultural Leadership. “Like culture itself, it comes from many