Wal-Mart's international strategy has been shaky up to this point

So far, the news has not been all that great for Wal-Mart in terms of finding the right combination of variables in many international markets. It's had good-to-middling success in some markets like Mexico and some countries in South America, while it has bombed in Germany and South Korea, where it pulled out completely after years of trying to eek out consistent profit.

China and India, two markets that Wal-Mart execs had probably looked at for a few years, were finally entered into this year with partnerships with China's Trust-Mart and India's Bharti. China, by far, is the Holy Grail for Wal-Mart's international expansion, as the world's fastest-growing economy and growing middle class will need somewhere to spend all that money. But, make no mistake: Wal-Mart will not be immediately successful there. The road to Chinese riches will take a while, and many Wal-Mart investors may not have the patience after more than five years of a non-moving stock price. Patience, though, will have its day if Wal-Mart can stay the course in China.

And, Wal-Mart did it right in India and China by using partners that know the local markets, have relationships in place and know how to merchandise to their country's citizens. That was the problem in Germany and South Korea -- the right relationships were never in place and Wal-Mart's "bring in the big box" philosophy from its North American operations never really gelled in either country.

Making plans to fix all these issues

If you ask any retail expert, economist or industry analyst about how to "fix" Wal-Mart, the list of answers and subsequent detail would probably fill a few books. There are several things that need to be pushed up to the top at Wal-Mart headquarters in Bentonville:

• Making PR a voice of the company, not a defensive cul-de-sac
• Communicate with the public and press, confirm problems and highlight successes
• Bring customers into stores who are not only interested in low prices
  

So, let's attack public relations first. Wal-Mart sees daily attacks from every media corner of the U.S., but rarely do we see anything but mis-directed quotes and deflection from Wal-Mart brass. If the company has a PR department, you'd never know it looking at the poor job that occurs. If employee health insurance, labor lawsuits and other issues crop up, where is the proactiveness from the company on bringing these issues to light ahead of some media outlet looking to cash in on the Wal-Mart bash? It exists, but only wakes itself up and comes out to talk when Wal-Mart makes headline news. That has to change. Much of the harshness Wal-Mart receives is due to the lack of self-defense the company puts forth.

Secondly, communicate, communicate, communicate. Yes, Wal-Mart -- you have problems like every other company in the world. When they are brought to your attention, highlight your response to them in prioritized fashion and let the world know. There are many areas like packaging material reduction and electricity savings that Wal-Mart should be marketing under the umbrella of being a good corporate citizen. Don't use these communications to respond to dirty store accusations and lackluster same-store sales results.

Acknowledge those issues, provide communications on solutions and then highlight successes (because you have plenty of them). Yes, you're constantly derided by many for importing so much from China, but then your defense is "we're saving the customer money." The answer should include more than that, like "Wal-Mart customers demand the lowest prices always, and for that we must source from China, not the U.S." (if that is in fact true). Just because customers looking for the absolute lowest price got you to where you are does not mean that is a sustainable model going forward, even with housing market problems and rising gas prices. If that customer base is still the most important, say so and defend it. It's all about communications.

This last one is huge -- how does Wal-Mart 'grab' new customers and get them into stores. You know, those folks who spend billions a quarter at retailers like Target Corp. (NYSE: TGT) and Best Buy, Inc. (NYSE: BBY)? It's made progress recently, as I've seen many a store be re-vamped to make the customer in-store navigation work better to steer customers to higher-margin products. At the same time, many store renovations make Wal-Mart Supercenter locations in particular look a lot less like a discount retailer with no particular emphasis on any merchandising area and more like 'ministores' within the same big-box framework.

But, here's an example of what is not working: let's look at personal computer sales and digital music players. These items are generally under glass or plastic (not accessible by customers) and that's a huge problem that Wal-Mart does not seem to want to fix. Consumers buy electronics items (an area Wal-Mart has stated it wants to "step up") using the "touchy-feely" method. Hiding these items behind the prison doors of plastic and glass is not going to give any customer an incentive to buy them.

And PCs? Laptop computer displays in the many Wal-Mart Supercenters I've been in are under plexiglass (again, not accessible), are not turned on or functioning in any way and desktop computers are merchandised like they would be at a warehouse club. Who is going to buy that new Dell PC since it is so attractive inside that box on that dirty pallet -- not sitting on a shelf, unboxed and operational, for Pete's sake. Some of the merchandising managers for Wal-Mart need to have their collective heads examined. You'd never find this type of sloppy presentation inside a Best Buy or even a Target store from my experience. And yes, customers do notice, Wal-Mart.

Well, those are some of the highlights on how Wal-Mart could drastically improve itself in many ways. It's never too late to say never, and the days of returning double-digit growth could conceivable come back if Wal-Mart chooses to make these improvements among others and stop just dragging the dead legs of past growth around with it as time marches on.

See you next week, and until then, have a great weekend!