Walmart case, Introduction to international business
Wal-Mart case
October 9, 2013
1. A few of Wal-Mart’s FSA’s are the ‘every day low price’ (ELPD) and the their so called ‘exceptional service’. Their very low price is reached by a very efficient distributing systems, innovative technology, low prices negotiated with the supplier and efficient processes with suppliers. And their ‘exceptional’ service means smiling at customers, assisting them and exceeding their expectations. If we look at this general strategy it would seem these are all international transferable FSA’s, you can implement the same efficient systems in the new host country, negotiate low prices and teach the Wal-Mart staff to give ‘exceptional’ service. Of course small adjustments have to be made to coop well with the local culture. But in general these FSA’s all seem internationally transferable.
2. American retailers faced distance components in Germany. Wal-Mart had only two warehouses, in west-Germany, nearly 500 kilometers away from their stores in east and south- Germany. The physical distance between the headquarters of the two former companies also forced Wal-Mart to consolidate and shut down one of the former headquarters.
3. Considering the statement: ‘Hey we are in Germany, isn’t that great?’ to be true. We do think Wal-Mart overestimated the transferability of its FSAs. However, Wal-Mart’s main reason for failing is the underestimation of the differences between the US-market and the German market. If Wal-Mart went to for example the Netherlands, the customers would be less parsimonious, and the American products might have been a lot more bought. Wal-Mart did overestimated the general transferability of its FSAs to an unspecified country. Germany doesn’t lend itself to a company with a foreign culture, where smaller countries would do so. Wal-Mart basically had to deal with laws that were against Wal-Mart. Some other countries have looser restrictions for supermarkets. Wal-Mart didn’t make a distinction between foreign
October 9, 2013
1. A few of Wal-Mart’s FSA’s are the ‘every day low price’ (ELPD) and the their so called ‘exceptional service’. Their very low price is reached by a very efficient distributing systems, innovative technology, low prices negotiated with the supplier and efficient processes with suppliers. And their ‘exceptional’ service means smiling at customers, assisting them and exceeding their expectations. If we look at this general strategy it would seem these are all international transferable FSA’s, you can implement the same efficient systems in the new host country, negotiate low prices and teach the Wal-Mart staff to give ‘exceptional’ service. Of course small adjustments have to be made to coop well with the local culture. But in general these FSA’s all seem internationally transferable.
2. American retailers faced distance components in Germany. Wal-Mart had only two warehouses, in west-Germany, nearly 500 kilometers away from their stores in east and south- Germany. The physical distance between the headquarters of the two former companies also forced Wal-Mart to consolidate and shut down one of the former headquarters.
3. Considering the statement: ‘Hey we are in Germany, isn’t that great?’ to be true. We do think Wal-Mart overestimated the transferability of its FSAs. However, Wal-Mart’s main reason for failing is the underestimation of the differences between the US-market and the German market. If Wal-Mart went to for example the Netherlands, the customers would be less parsimonious, and the American products might have been a lot more bought. Wal-Mart did overestimated the general transferability of its FSAs to an unspecified country. Germany doesn’t lend itself to a company with a foreign culture, where smaller countries would do so. Wal-Mart basically had to deal with laws that were against Wal-Mart. Some other countries have looser restrictions for supermarkets. Wal-Mart didn’t make a distinction between foreign