Walton: Building a Global Brand Through Internationalization: (Teaching Case)

On August 28, 2015, Ashraful Alam, Managing Director of Rizvi and Brothers (the RB Group, precursor to Walton HIL) was flying from Dhaka to Frankfurt to attend the International Trade Fair. In the plane, he began thinking about his veteran grandfather, who had sown the seed of entrepreneurship and internationalisation in the generations that had followed him. Alam has led the internationalisation of the Walton brand since the creation of Walton in 2007, and its recent strategic expansion – the establishment of a subsidiary in Stuttgart, Germany – left him poised to expand Walton’s reach to both EU and the United States. By 2014, the company was selling refrigerators, air conditioners, televisions, mobile phones and home appliances bearing the Walton brand name to over 20 countries in Asia, Africa and Australia, including in its home base in Bangladesh. Despite this rapid expansion, Alam worried about whether Walton could really compete with leading international brands, given its limited managerial talents and incremental innovation, and establish itself as a true global brand in near future. In early 2000, the management of RB group, comprising five brothers including Alam, realised that manufacturing locally could add more value than importing and assembling, which would enable them to wield more power over the value chain actors. Vast local market and the availability of cheap labour in Bangladesh, together with government incentives and a discounted income tax for local production facilities, boosted its cost competitiveness in the initial stage and provided a platform to establish the brand locally and globally. Understanding the nature of electronics and the electrical goods market, they realised that maintaining cost competitiveness alone would not be sufficient for future growth and market expansion. Thus, over time, the RB Group and Walton enhanced their upstream and downstream value chain activities by establishing R&D units, an IT firm, an equipment and accessories manufacturing unit, a printing and packaging unit, an advertising agency and many specialised sales outlets throughout the country and beyond. Walton was highly committed to achieving its ambitious business mission: “Walton in every home.”