Business Concept Renovation
Despite the difficulty it had in Germany, 
Wal-mart continues to do well in many other overseas markets like Mexico and India. Two recent articles underscore the retailer's alterations to its US business model in those markets. Regarding Mexico, Wal-Mart plans to open over 200 stores and restaurants this year, an almost 13% increase:
The plans include developing the "Mi Bodega Express" format, chief executive Eduardo Solorzano said. The format will be more of a neighborhood store than a convenience market and said the results of two such existing stores have been encouraging. The 2008 expansion plan also includes 17 Wal-Mart Supercenters, 79 Bodega Aurrera stores and 30 VIPs restaurants. Currently Walmex has 1,023 stores and restaurants. Results in Mexico have been good, with the stock of Walmex up 40% the past two years and earnings have grown 32% over that same time period.
A second story from the Hindustan Times details plans for Wal-Mart's cash-and-carry model in the Punjab:
The Bentonville-based retail giant Wal-Mart has finalised the business model for its cash & carry (wholesale) business in India. The first warehouse (distribution centre), which will be up and running in Ludhiana, Punjab, by this June, will have a format similar to Wal-Mart models in the US. However, the product profile will be different from the US stores. Wal-Mart’s cash & carry business, which is a 50:50 joint venture with the New Delhi-based Bharti group, is meant for large institutional or wholesale buyers and is not for retail sales. German retailing major Metro was the first international giant to set up cash & carry stores in India. Ted P Huffman, director of supply chain and logistics for Bharti Wal-Mart, said, “The distribution centre will be similar to Wal-Mart centres in the US, but it will be smaller.” While centres in the US are spread over 1 million sq ft —two football fields put together—the Indian centre will have a size of 80,000 sq ft. He says high real estate costs are the reason for smaller distribution centres. “We will be stocking grocery items and will not have items like toys and medical supplies, which we do in the US,” Huffman said.
Thus, overseas we are seeing a variety of retail formats: in addition to the super-centers, there are also restaurants; in addition to it's traditional focus on retail sales, we see experimentation with a wholesaler model; instead of going it alone, as in the US, we see a willingess to take on 50-50 joint ventures; instead of football-field size footprints, we see smaller distribution centers; and instead of every SKU under the sun, we see a more targeted selection. Doubtless there are other dimensions along which Wal-Mart's overseas business models diverge from the highly successful one developed in the US. How long until some of the successful overseas experiments are adopted back home in Bentonville? Perhaps not very long.
