If Wal-Mart Can't Impose a Global Standard, Can You?

Even as it faces new challenges to its business model, Wal-Mart remains an entity with considerable market power and global reach.  As chronicled elsewhere in this blog, at $315 billion in sales (or gross company product if you will), if Wal-Mart were its own country, it would be the 21st largest economy in the world ranked by GDP, ahead of countries such as Austria, Argentina and Indonesia.  And the company has global reach -- with $63 billion in revenues derived from foreign markets, Wal-Mart's foreign sales alone would be sufficient to make the company number 21 on the Fortune 500. 

But among Wal-Mart's challenges is its ability to impose its business model in international markets.  The company is struggling in Japan and recently folded up its tent in South Korea and in Germany, moves that the Wall Street Journal attributes to the retail giant's failure "to adapt to local tastes."

Certainly one would think that if any company has the ability to act as a global corporation imposing standardization wherever possible to achieve economies of scale, one would think that Wal-Mart would be such a force.  But apparently even Wal-Mart needs to adapt to local tastes, cultural preferences and parochial market forces to succeed in its international efforts.  I think this underscores the reality that a small to medium size company seeking to enter global markets needs to go into it with an eye toward flexibility and customization, using the agility of its size as a competitive advantage.  One great thing about foreign markets is that they provide an entirely new playing field in which beating the Wal-Mart's of the world is a very real possibility.