I vividlyremember when was announced that Walmart would enter in the Brazilian market.In this year of 1995 Carrefour, my employer then, was commemorating 20 gloriousyears of Brazil. And Walmart did not come along but sided with Jorge PauloLemanns Lojas Americanas, owner of a 40% interest (sold in 1997 with a R$ 9million loss). The message was clear and public: Walmart would conquer Brazil runningover the competition like a steamroller!At that timeI was working at Carrefours Brazil HQ. And Carrefour Brasil management reactedcorrectly to this announce by been prepared to receive the largest retailer inthe planet. The decision was for an attack instead of simply playing defense. Theexpansion plan of the newcomer was mapped and the Carrefour stores located withinthe influence zone of the new competition were reinforced in terms of teams,merchandise (assortment and inventory) and promotional campaigns (pricing andads). Additionally, was decided to acquire land located side by side with theland where the first Walmart Supercenter would be built. To this store anexperienced management team was transferred and was defined that it should notbe worried about making money but instead guarantee a reception on a par of agreat company. The result was carnage. The stores, each one, would invoice,monthly, over US$ 20 million (in 1995!). Walmart due to a team not veryfamiliarized with the modus operandi (processes), lack of adapted systems, anon-adapted assortment, and to anon-anticipated traffic lost a lot of money. Theenvironment in which Walmart entered Brasil was experiencing transformation invarious fronts: i. Economy: the Real Plan had, after decades, obtainedsuccess in taming inflation; ii. Competition: Carrefour and Grupo Pao de Acucar, thetwo major retailers operating large surface stores were both in a good moment.Carrefour, the leader, very lucrative and cash generator and Grupo Pao deAcucar had been through a successful restructuring and had reinforced itsBalance Sheet via an IPO. Other players were regional operators, stronglyentrenched in their regions and that had absorbed the know how of the majorplayers via recruiting their key people or by simply copying. And, other sourcesof competition were arising: (a) the increment in the number of physical andonline stores specialized in non-food; (b) the neighborhood supermarket wasmore professional and competitive in terms of prices; and (c) the cash andcarry wholesalers were capturing part of the emerging medium class. iii. Consumption: important transformations were takingplace such as the reduction in the time availability to shop (due to the growthin quantity and importance of the feminine work); a reduction in the size ofthe families; and a worsening in the traffic increasing the time to makedisplacements. iv. Supply: growth and professionalization ofmanufacturers; a favorable to import exchange rate. v. Infrastructure: important price increase of land.Retail is,by definition, local. Nevertheless, the phenomenon of globalization is not off(retail). Reasons or motives for a retailer embarking on an internalizationexpansion are: saturation of the domestic market (expansion engine), opportunity(arbitrage) and international orientation (levered on brand, financialresources, management capabilities and replicable model). And internationalexpansion can take place through: acquisition of an existing business (es);organic (reproducing the existing model in the new country); or via cooperation(licensing brand and know-how). And why itdid not take place