Walmart Scenario
Walmart is the largest retailer in the world, with more than 4,000 stores located in 14 countries outside the United States. The corporation has learned, sometimes the hard way, that the Walmart business model cannot be transferred to every country it enters due to cultural differences. For example, the retailer ran into difficulties in many European countries because stores are not open 24 hours a day, seven days a week like Walmart Supercenters are in the United States. When negotiating the purchase of Trust-Mart stores in China, the company had to develop relationships with executives before even discussing business opportunities. Finally, Walmart varies marketing mixes based on local tastes, cultures, and economic conditions.
-Refer to Walmart Scenario. Walmart has not yet expanded into Russia, perhaps because the total size of the consumer market in terms of buying power is so much lower than other countries. Which term describes this situation?

Question

Quizplus · Accepted Answer

The situation described in the scenario is related to the purchasing power parity (PPP) of the Russian consumer market, which is lower compared to other countries where Walmart has expanded. PPP is a measure of how much a unit of currency can buy in different countries, and it is often used to compare the living standards and economic strengths of different nations. Therefore, Walmart may have decided not to enter the Russian market yet due to the lower buying power of its consumers. Foreign direct investment (FDI) refers to a company's investment in a foreign country to establish business operations, while cultural distance (CD) refers to the perceived difference in cultural norms, values, and practices between two countries. Gross domestic product (GDP) measures the total value of goods and services produced within a country's borders in a specific time period.

Walmart Scenario Walmart Is the Largest Retailer in the World, with More