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In 1991, Wal-Mart, the USA''s number 1 retailer since 1990, forayed into the international market for the first time by entering Mexico. By 1999, besides the USA, Wal-Mart had its presence in nine countries. Since 2000, Wal-Mart had been witnessing significant growth in its international sales against flattened domestic sales. As Wal-Mart looked for double-digit sales and profit gains, it decided to expand rapidly into international markets to avoid concentrating only in its home market. Japan, the second largest consumer market in the world after the USA, was its next natural destination. On 14 March, 2002, when Wal-Mart announced its decision to enter Japan, the country''s economy was mired in recession with spiralling deflation, shrinking consumer spending and cutthroat competition. Before Wal-Mart, many foreign retailers like sportswear company ''Footlocker'' and food giant ''Burger King'' had failed. The case discusses the challenges that Wal-Mart faced during its entry into the Japanese retail market and how it planned to overcome them. A structured assignment ''303-238-4'' is available to accompany this case.