Walmart's Global Strategy

In: Business and Management

Submitted By Artpopgod
Words 3054
Pages 13
| 2013 | | |

[Case 6: Walmart's Global Strategy] | 604.800 International and Comparative Management |

1. Case summary
2006 was one of the years that marked the biggest retrenchment in Wal-Mart’s history. It was the year that Wal-Mart had decided to exit the German market after trying to penetrate it for about eight years. The company undertook its international expansion in the early 1990s to rejuvenate sales and growth. However, on July 30th, 2006, Wal-Mart had announced that it was selling its operations to German retailer Metro. In May of same year, Wal-Mart had also announced that it was selling its 16 stores in South Korea, admitting another internationalization failure.
What went wrong with Germany? Wal-Mart had underestimated its German competitors, the power of German shoppers, cultural differences and the power of labor unions in Europe. The company did not expect that these differences would impede its ability to apply in Germany what worked so well in the United States. German competitors offered very low prices, while German shoppers had shown how demanding they can be and that they buy products predominantly based on price; even if that meant going to a few different retail stores during their shopping trip. German shoppers were also not accustomed to workers putting their groceries in shopping bag. Moreover, German regulations limited Wal-Mart’s ability to offer extended weekend hours and sell merchandise below cost. Strong labor unions limited the ability to contain operation costs.
During its time in Germany, Wal-Mart had four presidents in eight years, which marked an organization disaster. But it is also not the only company that found German retail market challenging. Uniliever and Nestle also had to retrench from the German market. However, Wal-Mart today operates in 11 countries, comparing to Carrefour of France which…...

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