Walmart Case Study
1. Compare and contrast Wal-Mart’s efforts in Germany and South Korea with its operation in China?
After more than a decade, Wal-Mart left Germany failing to become the popular “Everyday Low Prices” all in one shopping spot as it is in the U.S. Walmart has also failed abroad in other countries such as South Korea. There were only 16 stores in South Korea and was eventually sold out to a Korean discount chain, Shinsegae, for $882 million dollars. Reasons why Wal-Mart fails in these countries occur from the lack of strategic plan, other than the duplication of the U.S. strategy. The strategy of low prices, keen inventory control, and a huge selection of goods was not a success in German and Korean markets. The culture was also a factor that Wal-Mart needed to consider and alter their strategy before entering Germany and South Korea. For example, in Germany the company had American managers that like in the U.S. offer to bag groceries while Germans like to bag their own groceries. Also, the customer service was translated into being overly friendly with customers where smiling and greeting is not a norm in Germany. In addition, Wal-Mart never established relations with labor unions. In Korea, the racks were taller than that of competitors which raised a problem for people having to use ladders to reach items and the infrastructure also turned customers off with ceilings that showed pipes while their competitor E-Mart had decorated ceilings. Having failed to the tastes of South Korean and German consumers, the business philosophy also failed even though it has always worked so well in America. There was inability to compete with already established discounters and Wal-Mart was not aggressive enough in expanding their networks in the countries. In Germany the smaller discount stores Aldi and Lidl dominate the grocery business with low prices and better quality food than Walmart. Their strategy to draw customers back is to have promotions that discount all their
After more than a decade, Wal-Mart left Germany failing to become the popular “Everyday Low Prices” all in one shopping spot as it is in the U.S. Walmart has also failed abroad in other countries such as South Korea. There were only 16 stores in South Korea and was eventually sold out to a Korean discount chain, Shinsegae, for $882 million dollars. Reasons why Wal-Mart fails in these countries occur from the lack of strategic plan, other than the duplication of the U.S. strategy. The strategy of low prices, keen inventory control, and a huge selection of goods was not a success in German and Korean markets. The culture was also a factor that Wal-Mart needed to consider and alter their strategy before entering Germany and South Korea. For example, in Germany the company had American managers that like in the U.S. offer to bag groceries while Germans like to bag their own groceries. Also, the customer service was translated into being overly friendly with customers where smiling and greeting is not a norm in Germany. In addition, Wal-Mart never established relations with labor unions. In Korea, the racks were taller than that of competitors which raised a problem for people having to use ladders to reach items and the infrastructure also turned customers off with ceilings that showed pipes while their competitor E-Mart had decorated ceilings. Having failed to the tastes of South Korean and German consumers, the business philosophy also failed even though it has always worked so well in America. There was inability to compete with already established discounters and Wal-Mart was not aggressive enough in expanding their networks in the countries. In Germany the smaller discount stores Aldi and Lidl dominate the grocery business with low prices and better quality food than Walmart. Their strategy to draw customers back is to have promotions that discount all their
Cited: BARBARO, MARK LANDLER and MICHAEL. The New York Times. 2 August 2006. 19 March 2013. < http://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart.html?pagewanted=all&_r=1&>. Landler, Mark. Wal-Mart gives up Germany - Business - International Herald Tribune. 28 July 2006. http://www.nytimes.com/2006/07/28/business/worldbusiness/28iht-walmart.2325266.html. 19 March 2013. Sang-Hun, Choe. Wal-Mart quitting South Korea. 2006. http://www.nytimes.com/2006/05/22/business/worldbusiness/22iht-won.html. 2013.