wal-martargentina.docVIP

Wal-Mart Argentina Teaching Note Prepared by: Luciene De Paulo Andrew Martin Esther Montiel Jennifer Pogue Gabriel Szulik Teaching Note Wal-Mart International Wal-Mart announced at its 1994 annual shareholders meeting that it would expand its operations into Brazil and Argentina during 1995. At the time, Latin America did not have a developed market for the middle class and the two countries were achieving more stable macroeconomic fundamentals and offered large promising markets. Although Wal-Mart announced it would enter Brazil through a joint venture with a local chain, Lojas Americanas, the Company announced it would enter Argentina independently. Many people speculated that the Company would be interested in a joint venture in Argentina with a local chain (NORTE, owned by Alberto Guil) or even in buying a local competitor. Wal-Mart International opened its first store in Argentina, a Sam’s Club membership warehouse, August 1, 1995. On November 1, 1995, the Company opened its second store, a Wal-Mart Supercenter, a 25,000 square meters store that was built at a cost of $18 million. The Supercenter had 50,000 different items and 36 different departments. During 1996, Wal-Mart announced its plans to open 75 new locations in the U.S. and 30-35 new stores in Argentina, Brazil, Canada, China and Puerto Rico. (Interestingly, the Company has only 13 stores in Argentina as of 1999). Despite its plans, Wal-Mart only expanded in Mexico, Argentina, and China during 1996. It also had a joint venture with a Thai firm to build stores in China and Hong Kong, but ended the venture and chose to open stores in China and Indonesia at a cautious pace instead. In Latin America, expansion plans were slowed down in Mexico due to the peso’s sharp decline in 1995 and supplier problems in Argentina. As of August of 1996, Wal-Mart had opened more than 230 stores in developing countries such as Colombia, Mexico, and Brazil as well as in Can