Walmart and Amazon.
Two highly successful businesses.
What you may be surprised to know: the strategies they used to achieve a high degree of success at home — those very strategies did not work so well in the international arena.
Its success formula included building stores in rural areas; and high investments in IT. The latter connected them seamlessly with its many vendors; that enabled them to keep product inventory at a minimal level.
What contributed to Walmart’s success in the domestic market — infrastructure, tax compliance, labor laws — turned out to be the very challenges they faced outside of U.S.
Rural areas often lack good roads. And small vendors were distrusting of the big guys; they wouldn’t share their data (because they suspected the information would be reported to the tax authorities.)
Walmart’s success formula didn’t work so well internationally.
Part of Amazon’s success strategy was to build distribution/fulfillment centers all across U.S.
And, just as Walmart did, Amazon heavily invested in IT.
The transition to the international market didn’t go as smoothly as they would have liked it.
The local customers were reluctant to place orders because they feared the product wouldn’t be delivered; or it wouldn’t be the quality they were promised
All business is local
Obviously many of the issues we talked about are connected to the culture of each country they are operating in. But even here in the U.S. these retail giants had to adjust for the regional market they operate in.
Walmart, for example, will sell hunting gear only in states where there is a demand for it. But it won’t carry these types of products in states where it won’t sell. (Or, worst, will create a havoc.)
Most of us will have far fewer challenges than these retail giants do.
Still, as an entrepreneur, you’ll do well to face this reality: business is local.
And adjust your operating strategy accordingly.
Wishing you much success in all you do.
Thanks for visiting.