WAL-MART prepares for further overseas expansion

To support its international expansion, Wal-Mart has set up new systems over the past two years to assess and integrate new international businesses. The overhaul has been spearheaded by Mike Duke who took over as head of international operations in September 2005.

In a recent interview with the Financial Times, Duke said “As I came in, and maybe with a new perspective, I was aggressive in addressing certain opportunities that needed to be addressed.” Shortly after taking over the job, Mr Duke acted on the results of a global review of the company’s country units to pull out of South Korea and Germany, “Looking at our businesses as a portfolio caused me to really look at businesses where we could not produce shareholder return, and look at those objectively and say: ‘If we can’t reach the returns for our shareholders and we are not serving our customers in a unique way, we should exit that country.” Mr Duke insists that Wal-Mart is committed to Japan, which Wal-Mart executives compare with the early struggles faced by its now profitable business in Mexico. He says Japan is one of the countries in which Wal-Mart may not be “winning today” but has “a clear path to victory”. The retailer argues that taking full control of the Japanese company has made it easier to institute changes that have included creating a more streamlined distribution system and increasing Seiyu’s focus on low prices. The retailer is actively exploring a first move into Russia and neighbouring countries, while preparing to open its first cash & carry stores in India next year in a joint venture with Bharti Enterprises.

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