Established in Arkansas, United States, in 1962, over the last four decades Wal-Mart has grown rapidly to become the largest retailer in the world. During the 1970s and 1980s the focus was fully on the domestic US market. The aim was to build a competitive advantage domestically, based on the "everyday low prices" slogan. After building up its competitive advantage, in the early 1990s the management felt that the company was ready for international expansion. During the first five years of its internationalisation (1991 to 1995), Wal-Mart decided to concentrate heavily on establishing a presence in the Americas: Mexico, Brazil, Argentina, and Canada. Obviously, Canada had the business environment closest to the U.S. and appeared the easiest entry destination. Brazil (1994) and Argentina (1995) were chosen because of the cultural similarities with Mexico and because of their relatively large populations. So, Latin America (and Canada) was the first phase of international expansion. The second phase started in 1998 when Wal-Mart entered the European market through Germany by acquiring Wertkauf hypermarkets. The third major strategic step in Wal-Mart's global expansion was entering the Chinese market. Wal-Mart activities are relatively successful in China. In an interview with the Financial Times, Wal-Mart China CEO Wern-YuenTan summarized the main success factors on the Chinese market:

• Adjustments of our products cost a lot of money. Therefore, we are hesitating to adapt our products and services. However, we adjust our product offering when the consumer demands it. This is what we do in China, as well as in other Asian markets.
• This need for adaptation is a basic rule for all international expansion discussions within the company after 2005
• We must survive in an environment of heavy competition. This competition comes from Western competitors, and from (large) local players. Therefore, lowering costs is essential. This can be done through economies of scale as well as local sourcing
• We use our global brand, but in complement with local marketing campaigns and discount campaigns that fit the Chinese consumer.
• Our head office knows more and more about cultural differences and we put a lot of effort to understand the Chinese market and its preferences. For example, for many years we are organizing international training for our managers, in which emphasis is placed on the mission and vision of the corporation, in combination with emphasizing the local context.

This strategy is also visible when looking at the role of the head office.One decade ago, the global management team of Wal-Mart consisted of American managers with mostly (only) domestic experience. However, today, the management team also consist of European and Asian managers. Furthermore, having experience in different countries is a must to take high positions. Additionally, the main decisions are still made in head office but more and more collaboration with regional head offices can be seen. Looking at country managers at Wal-Mart, most are local hired managers that know the markets and buying habits. Obviously, decision-making processes take place from top to bottom related to core-elements, but at the same time we see that information comes bottom up and the head office is listening to foreign subsidiaries and even local offices.

A. Indicate which strategy within the Integration-responsiveness framework was being executed by Wal-Mart in China. Clearly motivate your answer.

B. is the chosen head office attitude by Walmart a logical choice when taking the China strategy into consideration? Explain your answer.

C. Looking at the Chinese business context, would you advice Western automotive companies such as Volkswagen, Ford or BMW, to implement the same strategy as Wal-Mart? Motivate clearly your answer.