Wal-Mart Acts Locally in Brazil

In light of Wal-Mart’s history in foreign countries, recent progress the retail giant has made in Brazil is an important model for multinational corporations looking to build relationships in countries that are culturally much different from their own (“After Early Errors, Wal-Mart Thinks Locally to Act Globally,” The Wall Street Journal, 14 August 2009). For example, Wal-Mart’s withdrawal from the German market was in part a consequence of cultural miscommunication. Anil K. Gupta, author of The Quest for Global Dominance and Maryland business professor has analyzed Wal-Mart’s international history.

“If I had to pick Wal-Mart’s No. 1 weakness, it is that they have not historically factored in the fundamentally local nature of retailing, and that is surprising,” says Gupta.

According to the article, Wal-Mart has not only adjusted its inventory to meet the demand of local consumption, but it has invested money into humanitarian and cultural organizations, proving that it’s in tune with Brazil’s relationship-oriented culture.

Miguel Bustillo/The Wall Street Journal

The regional differences in a country are also important considerations for large retailers, which are oftentimes taken for granted.

“Wal-Mart is taking the local approach further, now, by separately targeting the country’s three quite-different population areas: the northeast, the south near Argentina, and the cosmopolitan southeast where São Paulo, the country’s financial capital, is.”

It will be interesting to see over the next few years how Wal-Mart fares in Brazil and the wider global market.

Click here to read the article.