Why Wal-Mart failed in Germany?
a. Now based on what you have learned in this class to date answer - Why did Wal-Mart fail in Germany? Be specific and in you conclusion state which is the most important reason.
Wal-Mart is an American company created in 1962 by Sam and Bud Walton. Based on very low prices and an excellent customer service, it quickly became what it is today, the largest retailer in the world. Wal-Mart is also the dominant in clothing and textile as well as food retailers on the US market with around 100 million shoppers weekly. Its sales represented $244.5 billion in the year ending January 31st, 2003. But surprisingly, Wal-Mart still represents a small part of the international retailing, both as the number of countries occupied and the earnings of foreign sales; Wal-Mart does not appear in any of both top 10. In late 1997, Wal-Mart tried to entry the competitive German retail market, which is successful in Europe due to its hard discount stores such as Aldi or Lidl. This operation turned out to be a total fiasco. Overall the failure of Wal-Mart Germany is due to Wal-Mart’s hubris and a huge lack of acknowledge of the German retailing market, this includes the culture and the language, the buyer behavior, the competitors, the legal framework and the regulations, and also the way they entered the market.
The first mistake made by Wal-Mart in Germany was to not change his management techniques and to manage Wal-Mart in Germany like they did in The United States. Something that is commonly hated by most European people is to see American’s firms to come in Europe thinking that people will adopt themselves to the firm’s management and that they will react the same way as Americans did. Wal-Mart’s managers probably thought that by coming in Germany, they would not have to change the way things are in The United States. For example, the first CEO of Wal-Mart Germany would simply ignored the strategic advices from executives of the merger firms, which ones are surely
Wal-Mart is an American company created in 1962 by Sam and Bud Walton. Based on very low prices and an excellent customer service, it quickly became what it is today, the largest retailer in the world. Wal-Mart is also the dominant in clothing and textile as well as food retailers on the US market with around 100 million shoppers weekly. Its sales represented $244.5 billion in the year ending January 31st, 2003. But surprisingly, Wal-Mart still represents a small part of the international retailing, both as the number of countries occupied and the earnings of foreign sales; Wal-Mart does not appear in any of both top 10. In late 1997, Wal-Mart tried to entry the competitive German retail market, which is successful in Europe due to its hard discount stores such as Aldi or Lidl. This operation turned out to be a total fiasco. Overall the failure of Wal-Mart Germany is due to Wal-Mart’s hubris and a huge lack of acknowledge of the German retailing market, this includes the culture and the language, the buyer behavior, the competitors, the legal framework and the regulations, and also the way they entered the market.
The first mistake made by Wal-Mart in Germany was to not change his management techniques and to manage Wal-Mart in Germany like they did in The United States. Something that is commonly hated by most European people is to see American’s firms to come in Europe thinking that people will adopt themselves to the firm’s management and that they will react the same way as Americans did. Wal-Mart’s managers probably thought that by coming in Germany, they would not have to change the way things are in The United States. For example, the first CEO of Wal-Mart Germany would simply ignored the strategic advices from executives of the merger firms, which ones are surely