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Case Study: Wal-Mart’s Failure in Germany

Wal-Mart Stores, Inc. is the largest retailer in the world, the world’s second-largest company and the nation’s largest non-governmental employer. Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The Company’s mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam’s club segment includes the warehouse membership clubs in the United States. The Company’s subsidiary, McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States, but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China.

Wal-Mart’s Entry and Operation in Germany

Wal-Mart’s initial entry into German market was through the acquisitions of renowned 21 store Wertkauf chain for an estimated $1.04 billion in December 1997.It was followed one year later by the acquisition of In-terspar’s 74 hypermarkets from Spar Handels AG, the German unit of the French Intermarche Group , for ‚¬560 million. Thus Wal-Mart immediately became the country’s fourth biggest operator of hypermarkets. However, with a turnover of around ‚¬2.9 billion, and a stagnating market share of just 1.1 per cent, the US giant still was a negligible one in the German retail market. Even worse, with estimated accumulated losses of more than ‚¬ 1 billion, it is literally drowning in red ink although, according to Wal-Mart Germany’s CEO, Kay Hafner, its non food assortment, which accounts for around 50 per cent of its revenues, is profitable. Instead of expanding its network of stores by 50 units by early 2001, as originally planned, the company has been forced to close two big outlets, while at the same time it was only able to fully remodel three locations into its flagship Super center format. Due to its problems the company also had to lay off around 1.000 staff. On July 2006, Wal-Mart announced its official defeat in Germany and would sell its 85 German stores to the rival supermarket chain Metro and would book a pre-tax loss of about $1 billion ( £536 million) on the failed venture.

A Critical Analysis of Reasons for Wal-Mart’s Failure in Germany

There were several factors that contributed to Wal-Mart’s Failure in Germany. Amazing management blunders have plagued Wal-Mart’s German operation from the very start. Wal-Mart’s major mistakes on the German market may be summarized as follows.

Cultural Insensitivity was the major reason of failure.
Entry to German market by acquisition strategy.
Failure to deliver on its legendary “every-day low prices” and “excellent service” value proposition.
Bad Publicity about the company due to breaking of some prevailing German law and regulations.

In January 1997, Wal-Mart had first entry in Europe market with the acquisition of Wertkauf hypermarkets in Germany. Later in that year, Wal-Mart also acquired Interspar, another German hypermarket chain. While its first move — the 1997 takeover of the 21 Wertkaufstores was indeed a shrewd one, given that company’s excellent earnings, its competitive locations, and its very capable management. Wal-Mart’s 1998 follow-updeal with Spar for 74 hypermarkets was widely judged an ill-informed, ill-advised act, for several reasons. Spar is considered to be the weakest player on the German market due to its mostly run-down stores, very heterogeneous in size and format, with the majority of them located in less well-off inner-city residential areas.

Wal-Mart’s cultural insensitivity led to its failure in Germany.

Wal-Mart’s Failure in Germany – A Case of Cultural Insensitivity

Most of the Global mergers and acquisitions failed to produce any benefit for the shareholders or reduced value, which was mainly due to the lack of intercultural competence. Lack of sensitivity and understanding of language barriers, local traditions, consumer behavior, merchandising, and employment practices irreversibly damaged Wal-Mart’s image in Germany. One of the main reasons that failed Wal-Mart in Germany is when it attempted to transport the company’s unique culture and retailing concept to the new country. The top management refused to even acknowledge the differences in customer behavior and culture in Germany when compared to its US customers, and the top management failed to listen to the feedback from its employees. Not every new cross- border retailer can be a retail giant outer its home. The mistake of exporting its culture wholesale, rather than adapting to local market, leads Wal-Mart failed in Germany market.

Wal-Mart’s ambitions to position itself profitably in European markets through Germany have been hit badly by their inability to fully understand and to adapt to the specific conditions of doing business in other countries. This exposed their obvious lack of intercultural competence and management skills. The main challenge of post-merger integration is further complicated significantly if it is in a Cross-border Merger or acquisition, with all issues frequently being compounded by a lack of language and culture bridging skills. Failure to accomplish this task satisfactorily, results in mutual distrust, de-motivation and negatively impacts the merged companies’ competitiveness, profits and shareholder value. This is exactly what happened to Wal-Mart Germany.

Following are the main two factors that contributed to the Wal-Mart’s Failure in Germany;

1) Specific Difference in German Consumer behavior and Culture in comparison with US consumers:

The biggest mistake of Wal-Mart was to ignore the local culture, local buying habits and impose an American boss on its German operations. Wal-Mart stores are designed for customers who are willing to spend lot of time shopping. But in Germany, the shopping hours are shorter: Shops close by 5 PM on weekdays, and no shopping on Sundays. This meant that customers don’t have the habit of spending lots of time in a store – wandering around for the things they need. Coupled with this problem, German customers do not like to be assisted by Wal-Mart’s friendly store assistants. Germans prefer to do their own search for bargains. Instead of understanding and adjusting to the culture of its clients, Wal-Mart tried to impose their Culture on to the Customers, which never worked out.

Germans like to see the advertised discount products upfront without having to ask the store assistant. This implies that the discount products must be placed at the eye level. Instead Wal-Mart chose to use its US style merchandise display strategy – where premium priced products are kept at eye level and discount products are kept at higher shelf or in the bottom racks. This irritated the German shoppers. Wal-Mart also got its store inventory wrong, Wal-Mart stocked its store with clothes, hardware, electronics and other non-food products were given much bigger floor space than food products, as a result more than 50% of the revenue was from non-food products. But other German retailers stock more of food products. For example for Metro, food products constitute more than 75% of the revenue. Germans prefer to bag groceries themselves into reusable carriers, or at least to pay a small fee for the avoidable sin of needing a plastic bag.

German’s are introvert in nature and doesn’t like display of emotion in public, as they always care for their private personal space. Employees, like the reserved customers, didn’t care for Wal-Mart’s public displays of corporate moral such as the morning cheer. The German Customer’s even didn’t liked to be accompanied by the Cheerful employees either, as they would like to make choices by themselves. These are cultural misunderstandings as well, but one could say the cultural philosophy of Wal-Mart could not survive in the context of a German culture with a Happy Planet Index significantly higher than America’s.

2) Inefficient Top Management which ignored the relevance of local Culture:

It was clear that the cultural insensitivity of Wal-Mart started right at the top management. To begin with, it appointed four CEOs during its first four years of operation. The first head of German operations was Rob Tiarks, an expat from the USA – who did not understand Germany or its culture. He had previously supervised around 200 Supercenters in America. Not only did he not speak any German. Due to his unwillingness to learn the language, English was soon decreed as the official company language at the management level. He also ignores the complexities and the legal framework of the German retail market, ignoring any strategic advice presented to him by former Wertkauf executives. This has resulted in the resignation of top three management executives from Wertkauf. His successors were also unsuccessful in integrating German Outlets with the Wal-Mart’s Business model and culture.

Other Reasons of Failure

A number of factors that resulted Wal-Mart’s failure in Germany are such as different corporate culture, political influence, stiff competition and inefficient management and marketing strategies . Firstly, David Wild, Wal-Mart’s CEO in 2004, believed that cultural differences between American and German consumers were considerable challenges to Wal-Mart. Debby, CEO in 2006, concluded that German shoppers are accustomed to shop at small scale discount stores such as Aldi and Netto that provides a limited range of products with special offers each week and no customer service, unlike US customers. In addition to different corporate culture, the competition has become gradually more intense between Wal-Mart and domestic retailers. The price difference has so lessened that sometimes even Wal-Mart had a higher price than their competitors. Consequently, consumers had little incentive to visit Wal-Mart Germany because of no obvious price advantage.

Some other factors that lead to Wal-Mart’s failure in Germany were, their strategy of acquiring the top competitor did not work, as the German government did its best to ensure the welfare of the domestic players. Also, due to wage restrictions, Wal-Mart could not practice wage bargaining, as it did back in U.S, this was a huge, uncommon expenditure for the company. Its American strategy of restricting employee freedom and forcing them to work extra hours, brought up problems of high labour turnover and a negative image as an employer. Wal-Mart failed to have an effective management at the top level. It’s CEO’s changed every year, this in an obvious way effected the company’s performance. Wal-Mart constantly ignored the strictness of German laws, and was charged heavy penalties for doing so. One of the most challenging thing for Wal-Mart was capturing the market- share. As per German legislation it was illegal to sell products below cost,because of which Wal-Mart could never achieve the ‘Low price leader’ tag.

It is impossible to smoothly run any organization, until there is co-operation between the employees and the employer. Wal-Mart faced a severe labour unrest,which hampered its brand-image. Kay Hafner,CEO of Wal-Mart reduced the wages to cut cost, this negatively influenced individual behaviour , as an anti-union decision. As suggested by Arndt and Knorr, a firm needs to understand the specifications when indulging in global expansion.Out of all the CEO’s, only David Wild has been sensitive to cultural difference.He did bring about changes based on this understanding,which had some positive results,yet not profitable enough to impress investors for future investments.

Moreover,as per German legislation their were some specific retail related laws, such as, limited legal working hours (80 hours/week) which were way less than the other European countries and had strict rules governing closure on Sunday’s and holidays. Wal-Mart repeatedly infringement German laws but were able to do away with it mainly because of global presence and influence on the government of US which played a major role in global politics. Some of incidences where the company broke few laws and was able to get away are summed up below:

‘Unfair trade’ practices such as selling goods below the cost price was prohibited in Germany but Wal-Mart was found violating these laws as it randomly sold some product below cost.
German law required a company to disclose it financial statements annually, Wal-Mart seldom did that and was spared without any fine or legal proceedings at number of occasions.
Obligatory Deposit Regulation’s law stipulated the retailer to provide deposit-refund-system on few products like metal beverages, cans etc. But Wal-Mart never followed this law.

Thus from the above incidences it can be concluded that Wal-Mart used its global influence to refrain from some of the German laws.

However, because German culture is quite different from American culture and because of unfamiliarity with the legislation, it would be difficult for Wal-Mart to make marketing and promotion right. And in fact these difficulties had been proved in Wal-Mart Germany. Consequently, rather than choosing Germany as the gateway to Europe, virtually after two years of operating in Germany it had entered in U.K. Even though U.K is not in the Euro zone and its geographic location is less favorable than Germany, it has a similar culture and legal environment as U.S. which makes it easier to operate the company’s business and strategies. It has considerable success in the UK market which is called by as a ‘Wal-Mart-ready’ market. Therefore, the lessons learned from from Wal-Mart’s failure in Germany has proven useful for U.K.

Suggestions and Recommendations

Cross-border, Cross-cultural business is a challenge even for the biggest companies. Companies have to be sensitive to the local cultures and tailor their offerings to local market. To localize their offerings, Wal-Mart and other Companies that are going global companies must carry out cultural assessment of the Citizens of the Country before acquisitions. All their Corporate Business and Communication strategies should be based on this cultural assessment. This will help companies measure the effectiveness of its localization efforts and make adequate changes in local strategy & tactics as and when required. Considering the following steps would help Wal-Mart or any other Company while they are on lookout of Global alliance or business.

1. Political, Social, Economic and Cultural Analysis of the Country

Before expanding its business operations to a new country, the Company should understand the Political, Social, Economic and cultural aspects of the Country in depth. Wal-Mart’s case, Germany was selected primarily because of a central European location and economic attractiveness of the Wertkauf acquisition. But a serious research would have shown that Germany had strong national values resistant to change ; possibly the most deeply rooted retail traditions in Western Europe. This could have avoided either Wal-Mart’s selection of the Country or the strategies it has adopted in Germany.

2. Go global and think they are local

After conducting an in depth research about the prevailing trends in the customer’s Country, the Company should be ready to modify its own identity to suit itself to the cultural differences without compromising much on its Corporate Mission . This step will also force organizations to clearly define globalization goals. Wal-Mart put the company name on many German stores before being fully established. Immediately, the run down stores left an impression on consumers who formed a negative image of the Wal-Mart name.

3. Employment of Cross-Cultural Management approaches

Employment of Hofsted’s Culture Dimensions or HT&T Analysis will help Companies in understanding the minute cultural differences between the countries. For example , Communitarianism over Individualism

Germans degree of communitarianism is on the higher side mainly because Germans prefer participating on a team. Most Germans see business as a group of related persons working together. But, most of Americans see their company as a set of functions, tasks, people, machines and payments in which individuals compete.

This difference in Cultural dimensions between the 2 countries has resulted in inside management conflict among the employees, which also resulted in resignation of efficient German executives from Wal-Mart post integration.

Understanding the cultural dimensions of a Country through proven Cross-Culture models will always help a company to formulate a specific approach that will encourage team spirit and joy among the Global Team.

4. Continuous Updation of Strategies to successfully withstand the local competition

It is very important for a Global firm to continuously analyse the impact of their various strategies on the local market. Understand the shortfalls, and modify it in such a way as to cater the local market in a much better way than the competitors. It is always better to scrutinize the strategies adopted by them with a panel of local experts, as they will be having a better picture about the local consuming behavior and culture. Perceptions do matter a lot, So a surveys to find the customer’s perception about the company will also help them to change their strategies accordingly.

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9 Reasons Why Walmart Failed in Germany (Full Guide)

Walmart‘s attempt to expand into Germany from 1997 to 2006 stands as one of the company‘s biggest international failures. This retail giant found itself struggling to gain a foothold in the large German market. Walmart was forced to fully withdraw from Germany in 2006 after accumulating over $1 billion in losses.

So why couldn‘t this retail juggernaut find success in Germany? Let‘s closely examine the 9 major factors that led to Walmart‘s failure in Germany:

Legal restrictions on undercutting competitor prices
Clash with German labor laws and trade unions
Underestimating entrenched local retail chains
Overall struggles in the mature German retail sector
Rejection of Walmart‘s corporate culture by employees
Failure to understand German shopping habits
Lack of focus in Walmart‘s broad product offerings
Refusal to adapt the business model to the German economy
Insufficient research prior to entry into the German market

By exploring each of these reasons in depth, we can gain insight into why Walmart was unable to replicate its American success on German soil. Understanding Walmart‘s German challenges also provides valuable lessons for international retailers seeking to expand into new markets.

Overview of German Retail Landscape Prior to Walmart‘s Arrival

Before diving into the specifics of why Walmart failed, it is helpful to understand the German retail landscape leading up to Walmart‘s market entry in 1997. This provides useful context for many of the challenges Walmart later faced.

Germany had a well-established retail industry dominated by small- to mid-size local and regional chains. The country‘s retail scene was characterized by the spread of discount grocers like Aldi and Lidl, which had captured the loyalty of German consumers seeking value. Germany also had a number of mid-size chains like Spar, Edeka, and Reewe serving various retail segments.

Unlike the American retail landscape filled with massive national big-box retailers, even the largest German chains had only captured single digit market share. Retail consolidation was happening at a much slower pace compared to the rapid rise of national chains in the US.

The German grocery sector in particular was known for being a challenging market with razor thin margins. Growth was slow across the entire German retail industry leading up to Walmart‘s arrival, averaging just 0.3% annual growth between 1996 and 2001.

With mature retailers entrenched across the country, limited prime retail locations, and discount chains capitalizing on the value-focused German shopper, the competitve conditions were far from ideal for a foreign newcomer like Walmart.

Reason 1: Legal Restrictions on Price Undercutting

Walmart built its American retail empire on aggressively low prices enabled by an efficient supply chain and economies of scale. A key part of Walmart‘s playbook has been undercutting competitors‘ prices to rapidly steal market share upon entry into new markets.

However, in Germany, Walmart‘s strategy of pricing below competitors ran afoul of strict German regulations. Germany prohibits companies from engaging in predatory pricing or selling goods below cost in order to protect small businesses from unfair competition.

In 2004, after years of complaints from German retailers, Germany‘s Federal Cartel Office ordered Walmart to raise its prices after proving the retailer was violating these laws. This legal restriction prevented Walmart from using its pricing advantage to achieve the same rapid success it enjoyed in the United States and other international markets.

Jürgen Weber, president of Germany’s Federal Cartel Office in 2004, stated Walmart’s obsession with low prices “was hurting retailers in Germany.” This dealt a major blow to Walmart’s core retail strategy.

Reason 2: Clash With German Labor Laws and Trade Unions

Walmart also encountered major obstacles trying to replicate its labor model in Germany. The company adamantly opposed German labor laws and clashes with trade unions created severe public relations challenges.

In the US, Walmart has taken a staunch anti-union stance, even closing down stores that voted to unionize. Walmart also pays low wages without benefits which enables its discount pricing.

Attempting to import this labor model into Germany brought Walmart into direct conflict with the country‘s strong labor laws and retail sector trade unions. German retail employees represented by unions were accustomed to higher wages due to collective bargaining.

When Walmart refused to join collective wage negotiations, the workers‘ unions staged protests and strikes in 2000 to demand higher pay. This conflict resonated strongly in labor-friendly Germany and gave Walmart a reputation for mistreating workers.

In 2006, Walmart again faced union protests over plans to cut hundreds of jobs and slash wages by over 25% for some workers after taking over a German retail chain.

Walmart failed to realize the political strength of German retail unions and importance of collective wage negotiations. Their resistance to adhering to local labor laws created backlash that hurt market share and amplified the challenges they already faced competing with established German chains.

Reason 3: Underestimating the Power of Established Local Retailers

Industry experts noted that Walmart failed to recognize how difficult it would be to compete with smaller German discount grocers like Aldi and Lidl. While Walmart anticipated big success based on its size and scale, the market realities in Germany differed greatly.

Aldi and Lidl had fine tuned efficient lean operations that allowed them to remain price competitive with Walmart, despite Walmart‘s greater size. These discount chains had cultivated decades of brand loyalty among German consumers seeking reliable value.

Local retailers knew the regional German markets intricately which gave them advantages in managing supply chains and store locations compared to Walmart‘s US-style operations.

Walmart incorrectly assumed that German shoppers would flock to its stores based on the reputation of its American success. But German shoppers remained loyal to their local discount brands, which had national market share of 40% combined by the mid-2000s.

Deep Dive into German Shopping Habits and Values

To fully understand the competitive challenges Walmart faced, it is essential to highlight key differences between American and German shopping habits and cultural values.

Surveys showed German customers cared more about consistent quality and brand loyalty over getting the absolute lowest price. As one retail analyst described it: "Germans will rarely go more than 100 meters out of their way to save 5% on their groceries."

Additionally, German shoppers preferred small, specialized local stores they could walk to rather than driving to distant retail warehouses offering one-stop shopping convenience. Environmental consciousness was also stronger among German consumers.

Beyond shopping habits, Walmart‘s overly friendly and enthusiastic American corporate culture clashed with German cultural norms. Service with a constant smile was seen as strange compared to the more muted service style in German stores.

Mandatory morning stretches and company chants failed to resonate with German employees who preferred a clear separation between their personal and work lives.

This extended to dating policies which restricted employees from having romantic relationships. While common in the US, in Germany this was seen as an intrusion into workers‘ privacy rather than an acceptable corporate guideline.

In these areas, Walmart misjudged the market by relying on false assumptions from its American success that German shoppers would prioritize ultra-low prices over factors like quality, brand relationships and corporate values.

Profile of Major German Retail Competitors

To highlight the competitive challenges Walmart faced in Germany, it is worth profiling a few of the major incumbent players that fought to maintain market share against the American retail giant:

Aldi – With roots dating back to 1913, Aldi had established itself as the dominant discount grocery chain in Germany with over 2,200 stores by the 1990s. Aldi had mastered no-frills efficiency which enabled it to compete aggressively on price against larger new entrants. Its brand reputation for value kept German shoppers loyal even when big retailers tried to undercut prices.

Edeka – As the largest supermarket corporation in Germany, Edeka posed a formidable competitor to Walmart in the grocery segment. With over 13,000 stores under a cooperative model, Edeka already had scale and substantial buying power on par with Walmart. Edeka focused on high quality produce and goods to differentiate itself.

KarstadtQuelle – This department store and mail order company was created via a merger in 1999, forming one of Germany‘s largest diversified retailers. Its department store channel generated over $15 billion in sales, creating a massive incumbent retailer for Walmart to try to compete against.

These established retail giants, along with other strong local and regional chains, made the German market inhospitable for Walmart from the start.

Reason 4: Germany‘s Mature and Stagnant Retail Sector

As highlighted earlier, beyond the challenges of local competitors, Walmart entered Germany during a period of stagnation for the entire retail sector.

From 1996 to 2001, food retail chains in Germany were only growing revenues by 0.3% per year on average. Non-food retail was similarly stagnant with minimal growth annually over that period.

Germany‘s dense population and developed economy meant that opportunities for retail expansion were far more limited compared to growing international markets. For example, Walmart saw 14.5% annual sales growth when it entered China in 1996 compared to the 0.3% sluggishness in German retail.

The mature nature of German retail meant a tortoise-like battle for each percentage point of market share rather than rapid growth potential. Facing this reality, the viability of achieving a reasonable return on Walmart‘s investments in Germany was dubious from the outset.

Reason 5: Rejection of Walmart‘s Corporate Culture

As highlighted earlier when contrasting American and German cultural values, significant aspects of Walmart‘s corporate culture failed to resonate in Germany.

From requiring hourly cheers to banning relationships between coworkers, Walmart‘s attempts to impose its own values were rejected by German employees. Worker morale and productivity at Walmart locations suffered as a result.

German workers were accustomed to a separation between professional and private lives. Walmart‘s corporate culture blurred this line substantially compared to German retail norms.

For example, when a female Walmart employee was demoted due to a relationship with a lower level male employee, she sued the company in Germany. Courts ruled in her favor, stating that Walmart had violated German constitutional rights to make personal life choices. This exemplified Walmart‘s friction with German cultural values.

Reason 6: Failure to Understand German Shopping Habits

Earlier we touched on a few aspects of how German shopper motivations differed from the American consumers Walmart built its business around. Here are some additional statistics that highlight key habit differences:

91% of Germans lived within a 10 minute walk of the nearest grocer, compared to 36% of Americans, making convenience less important.

The number one factor for Germans choosing a grocery store was quality of products (43%), followed by proximity (29%), then price (18%).

Germans made grocery trips 3.5 times per week on average compared to 1.5 times for Americans, with smaller daily purchases.

Car ownership rates were lower in Germany‘s urban areas. Walking and public transport were more common.

The average size of a German grocery store was 5,000 square feet whereas Walmart stores averaged 180,000 square feet.

Walmart attempted to replicate its American big-box suburbs and convenience-focused shopping experience despite clear data showing significant differences in how Germans shopped.

Reason 7: Unfocused Retail Strategy in Germany

Rather than home in on a particular segment where it may have stood a chance, Walmart attempted a broad retail expansion in Germany across grocery, general merchandise, restaurants, and clothing.

Critics pointed out Walmart may have fared better by acquiring a single discount chain and focusing on improving operations in that one brand.

But Walmart‘s ambitions were far grander, envisioning replacing Germany‘s many leading retailers with one new national big box chain. This strategy clearly did not resonate with German shoppers who were familiar and comfortable shopping at their existing local specialty businesses.

With so many different retail categories to compete in with entrenched incumbents, Walmart spread itself too thin in Germany and lacked focus.

Reason 8: Refusal to Adapt to the German Retail Ecosystem

At its core, Walmart failed in Germany because the company was unwilling to adapt in fundamental ways to accommodate significant differences from its successful US model.

As we‘ve explored, there were major contrasts between America and Germany in regulations, labor laws, incumbent competitors, and shopping culture. Rather than acknowledge these barriers, Walmart rigidly clung to what had worked well in America.

From corporate structures to supply chains to pricing, Walmart made half-hearted German concessions only when forced. In the eyes of German shoppers and employees, Walmart refused to become a genuine German company.

As one retail consultant noted: “You can’t just transplant a foreign system into a country and not adapt it to local conditions." Walmart took the opposite approach.

Reason 9: Lack of Research Prior to Entry

Many industry experts noted that Walmart did not do its homework prior to entering Germany. Its misguided strategy indicates a lack of research into German regulations, competitors, and shopper preferences.

Had Walmart invested time studying German retail and cultural norms, some of the brewing challenges would have become apparent before sinking billions into its doomed expansion.

Instead, Walmart relied on assumptions of easy market domination due to its scale and clout. But major international expansions require due diligence to understand subtle but crucial differences in local markets.

Rather than data-driven strategic planning, Walmart‘s confidence led to blindness that made failure in Germany nearly inevitable.

Conclusion and Lessons Learned

Walmart‘s failure in Germany stands as a classic business school case study in how cultural arrogance can blind a successful company from seeing dangers in a new market.

Walmart failed to deeply research the German retail landscape, regulations, and culture. They projected false assumptions based on their American model rather than gathering data. When problems surfaced, Walmart remained inflexible instead of adapting.

For international retailers, Walmart‘s German cautionary tale reinforces the need to think globally but act locally. What works in one market may fail in another. Companies must be willing to adapt practices, policies, and even corporate values to accommodate local conditions and differences.

Without flexibility and humility, international expansion attempts can suffer the same costly fate Walmart endured in Germany.

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Why Walmart Failed in Germany and Europe: The Main Reasons

Walmart is a multinational american company that runs chains of large discount department stores, supermarkets, and warehouse stores. it sells a variety of products, but they are most well-known for its low prices on groceries and household items. walmart operates retail stores in various retailing formats in all 50 states in the united states. also, it serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. as one of the most successful retailers, it might come as a surprise that walmart has not been successful when expanding in europe. throughout this content, we will demonstrate what went wrong in germany that led walmart to fail in the eu to sustain there..

Why did Walmart Fail in Germany?

Walmart’s story in the EU has begun with its attempt to expand its business in Germany. In 1997, Walmart entered the German market with the acquisition of the Wertkauf and Interspar hypermarket chains. But Walmart’s global fame and aggressive entry into foreign markets didn’t work out well in Germany. Walmart’s German stores struggled because its business model wasn’t working there. It tried hard, but after 9-years, Walmart sold its 85 outlets in Germany in 2006 resulting in a $3 billion loss.

There were several factors that contributed to Walmart’s Failure in Germany. From the very start, amazing management oversights have affected Walmart’s German operations. We have figured out some of the important reasons behind their failure.

1. Below-Cost Strategy: Walmart wanted to follow the below-cost strategy, But the German business owners didn’t like Walmart’s low-cost pricing tactic as well as the German government. As a result, the American giant was ordered to raise its prices by the German high court which became an obstacle for it to having a customer base.

2. Walmart and German Unions Were Incompatible: In the United States, Walmart is notorious for playing low wages and suppressing unions. In Germany, unlike in the US, unions are very much a part of the culture and have broad support amongst the government, the community, and even businesses. Walmart didn’t understand that in Germany, companies and unions are closely connected. Also, The German workforce is accustomed to negotiating their pay with their union. This caused friction between the workers and the company.

When Walmart refused to join Germany’s regional wage bargaining system, the worker’s union went on strike. Walmart was taken aback for this reason. This also gave them a bad reputation in the community and likely affected their sales.

3. Walmart Underestimated Their Competition: In the USA, Walmart has primarily been considered a low-cost, one-stop shop for just about anything a person could need.

In Germany, however, the people value the quality of products as much as they value the price. They weren’t about to abandon the small grocery chains they had always shopped at. Walmart did not expect such resilience from the 14 hypermarket chains that were popular across Germany, and they failed to adapt even after they found out.

4. Retail Chains Were Already Doing Poorly in Germany: Part of the problem with Walmart’s transition into Germany is that retail chains were growing at an alarmingly low rate at the time. In fact, when Walmart came into Germany, the average growth rate for a retail chain was just 0.3% per year. This acted as an immediate disadvantage in Walmart’s journey towards sustainable growth in the country.

5. Employees Felt Uncomfortable With Walmart’s Practices: It wasn’t just the pay and lack of worker rights that upset Walmart employees. It was also some “team-building” practices that many Germans didn’t feel comfortable doing.

At Walmart, workdays started with light exercises and motivational chants. While in US culture, these activities can sometimes bring a team closer together, in Germany, they are entirely unexpected and only served to make the employees uncomfortable.

6. Employees Felt That Walmart Overreached Into Their Personal Lives: In the United States and in many countries, it is taken as a given that employees that work in the same department cannot engage in romantic relationships. In Germany, however, this is not the standard. In fact, it is considered a huge overstep in a person’s life.

7. Walmart Failed to Take Into Account Cultural Differences Surrounding Shopping: In the United States, it is considered commonplace or almost by default that people like to drive out to one store and buy everything they need there at a reduced price. This is part of why Walmart has been so successful in the US.

In Germany, on the other hand, shoppers have different habits, and the way the economy is structured lends more significance to smaller discount chains. Below are just a few differences in culture, which caused fewer Germans to go to Walmart and more to go to smaller chains.

Many Germans like to shop at places that are within walking distance. The idea of “service with a smile” is not as emphasized in Germany and came across as odd and uncomfortable. Smaller discount chains in Germany can sell goods at lower prices than big retail chains by law.

Walmart enforced a corporate culture that ran counter to the values of many Germans. On the other hand, the small chains were in line with their beliefs.

8. Walmart Didn’t Focus Their Services Enough: Walmart sells just about anything a person would need; food, clothes, entertainment, car parts, gardening supplies, and more. Given the German population’s tendency to shop at smaller, more focused stores, this didn’t work on a cultural level.

It also didn’t work on an economic level. Part of the reason Walmart can sell so many goods at such a low price in the US is that they receive tax subsidies and pay workers a lower wage.

As we’ve seen previously, they were challenged on all of these issues. Still, they tried a more focused approach, perhaps on groceries or home goods, they could have carved out a corner of the market.

9. Walmart Failed to Adapt to Germany’s Economy: You put all this together, you get the primary reason why Walmart failed to gain any steam in Germany. They could not, and would not, adapt to the different economic systems.

To conclude, Walmart failed in Germany and eventually in the EU due to a variety of factors including the inability to adapt to german retail market conditions, lack of competitive prices against Garman stores, underestimated local competition, environmental cultural differences, and different organizational rules, and corporate culture for Walmart employees. If the folks at Walmart had been more proactive in studying Germany’s economic system and consumer habits, their stores might not have failed. We hope that you understand why Walmart failed in Europe. If you have found our conversation helpful, please leave a comment, share our post, and subscribe to our blog.

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Article Contents

1. Wal-Mart's strategic advantage
2. A resource-based conception of firm strategies in global markets
3. The US lean retailing model
4. The case: Wal-Mart confronts Germany
5. Lean retailing in the German context
6. What does Wal-Mart's failure in Germany imply for the ‘globalization’ project?
Acknowledgement
< Previous

Barriers to ‘US style’ lean retailing: the case of Wal-Mart's failure in Germany

Article contents
Figures & tables
Supplementary Data

Susan Christopherson, Barriers to ‘US style’ lean retailing: the case of Wal-Mart's failure in Germany, Journal of Economic Geography , Volume 7, Issue 4, July 2007, Pages 451–469, https://doi.org/10.1093/jeg/lbm010

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Wal-Mart's exit from the German market in 2006 after 10 years of attempting to achieve sustainable competitive advantage contributes an interesting case to the small but expanding literature on ‘failure’ in international investment. The work on the disinvest decision in all its forms has been critical to a re-conceptualization of the international investment process as dynamic rather than static, linear and inexorable. An important segment of the work on investment and disinvestment as dynamic processes focuses on the environment in which investment and disinvestment decisions evolve. While the environment of the host country market has begun to be examined, the market environment of the country in which the retail transnational corporation (TNC) originates also affects the international disinvestment process. To explore this ‘home country effect’, I examine the resources Wal-Mart brought into the German market and their ability to use those resources in the German context. Wal-Mart's resources were shaped by the market governance regime in which the firm evolved, and not insignificantly, over which it had and has influence. Within this theoretical frame, Wal-Mart's reliance on the resources of network dominance and autonomous action that made for its success in the USA contributed to unsuccessful strategies in the German retailing market.

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Case, example of product failure: Wal-Mart in Germany, 1997 to 2006

Wal-Mart is the biggest food retailer in the world and has a presence in several nations. In some nations (e.g. the US, Canada, China), Wal-Mart is a great success. However, Wal-Mart has failed in some countries (e.g. Germany, South Korea). First, we describe Wal-Mart’s failure in Europe’s largest economy. Second, we use Wal-Mart’s experiences in Germany to illustrate some key principles related to product failure and product deletion (see Table 13.4 ). Wal-Mart’s experiences are also an example of the importance to adapt to culture when starting a business in a new country.

The German grocery industry

There is fierce competition in the German grocery industry, due to the increasing number of discount supermarket chains (KPMG 2006). As a result, there is low profitability in the food retail sector; profit margins range from 0.5 per cent to 1 per cent which is one of the lowest profit margins in Europe (Frankfurter Rundschau 2007). By contrast, profit margins in Great Britain are 5 per cent, in this same sector. In particular, Metro is a tough competitor, and it already applies some of Wal-Mart’s successful strategies (e.g. related to economics of scale and low prices). Of course, Wal-Mart is interested in other metrics beyond profit (e.g. shareholder wealth, market share), but, as indicated above, profitability and margins are of key concern to retailers.

Wal-Mart: strategic concept

Wal-Mart is the world’s largest retailer with approximately 6,500 stores worldwide (Business 2006). The main feature of Wal-Mart’s business model is to cut costs (continuously) and therefore offer lower prices than their competitors. For instance, Wal-Mart has introduced new logistical technologies such as radio-frequency identification (RFID) to optimize its logistic processes. RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. Wal-Mart tries to minimize labor costs by offering minimal health care plans. Wal-Mart pressures its suppliers to cut costs, on a continuous basis. In brief, Wal-Mart’s managers are constantly seeking out ways to cut costs, and some of their successes are passed on to shoppers, in terms of lower prices.

Wal-Mart’s entry into the german market

In 1997, Wal-Mart acquired over 21 stores from the supermarket chain “Wertkauf.” One year later, Wal-Mart bought an additional 74 stores from the supermarket chain “Interspar”. As a result, Wal-Mart became the fourth biggest operator of supermarkets in Germany (Lebensmittelzeitung 2006). The objective was to expand to 500 stores in Germany. However, the number of stores never exceeded the 95 stores that were originally purchased in the first two years. Wal-Mart’s position in the marketplace deteriorated over the years. In 2002, Wal-Mart had some financial difficulties due to a low turnover which resulted in the dismissal of some employees. At the end of 2006, Wal-Mart was bought out by “Metro”, one of Germany’s largest retail groups. Finally, Wal-Mart left the German market with a loss of one billion dollars before tax (Manager-Magazin 2006).

Mis-steps in the german market

In general, there are five key issues related to Wal-Mart’s ultimate withdrawal from Germany: ( a) market structure; (b) business model (these first two are discussed together here); c) cultural and communication; (d) politics and regulation; and (e) product/service failure. Each of these issues is discussed in turn. Note also that these five issues are highlighted in Table 13.4 .

Market structure and business model

A retailer that wants to follow Wal-Mart’s strategy of low prices needs to expand rapidly. In Germany, there not enough appropriate locations to support such expansion (see Table 13.4 ). As previously mentioned, Wal-Mart did not build their own stores but took over 21 existing “Wertkauf” supermarkets that had a totally different business model. The stores themselves were very small and had a limited range of goods. A related problem is that these stores were located far apart, which resulted in high logistical costs.

When entering a new market, it is important to anticipate competitors’ reactions. In Germany, Wal-Mart’s biggest competitor, Metro, wanted to expand their stores; at the same time, Metro wanted to prevent Wal-Mart from executing their expansion plans (Senge 2004). Many times, a product has to be deleted because the competition is too strong.

With the strategy of “Every day low prices,” Wal-Mart is very successful in the United States and also in many other countries. In Germany, there is extreme competition in the retail food sector. Therefore, the German customer is quite accustomed to the low prices that are offered by numerous discount supermarket chains. For this reason, Wal-Mart’s strategy of offering low prices did not create sufficient competitive advantage (see Table 13.4 ).

Culture and communication

When products are introduced, it is important to consider cultural factors. In this case, corporate culture played a key role. Wal-Mart’s top executives decided to operate the German locations from their offices in the United Kingdom. Thus, Wal-Mart’s “corporate language” was English. However, many of the older Wal-Mart managers in Germany do not speak English. As a result, there were often breakdowns in communication. Some managers of the acquired stores did not stay on after the Wal-Mart acquisition. Key business connections were lost. As a result, several key suppliers (e.g. Adidas, Samsonite, Nike) declined to work as suppliers for Wal-Mart. Wal-Mart did not just lose important suppliers; they also lost an important part of their range of goods (Senge 2004). The situation could have been improved by retaining and communicating effectively with the German managers who had know-how about the local market (see Table 13.4 ).

Politics and regulation

The managers of Wal-Mart were not sufficiently familiar with the laws and regulations in Germany, as they violated them several times. One of Wal-Mart’s fundamental principles is to stay union free. However, in Germany, unions have a powerful position. Through collective bargaining and related tactics, they can have a strong influence on political decision making. Ver.di is a German union in the service sector. With 2.4 million members, it is one of the largest independent, trade unions in the world (Ver.di 2008).

According to the German Commercial Code, all incorporated companies are obligated to publish a financial statement, including a profit and loss statement. Due to the fact that Wal-Mart refused to publish their financial statements for the years 1999 and 2000, Ver.di sued in a court of law. Wal-Mart was sentenced to pay a fine. The coverage of this law suit in the German press led to a negative public image for Wal-Mart.

After the expansion strategy failed due to the lack of suitable store locations, Wal-Mart began a price war to drive small competitors out of business. The intention was to take over the stores of the insolvent supermarket chains and convert them into Wal-Mart stores. One part of the price war was to introduce a private label called “Smart Brand” and sell most of these products below manufacturing costs. The reaction of many competitors was to decrease their prices, which led to a profit setback for the entire industry. However, the Federal Cartel Office interceded and stopped the price war because there is a law in Germany that enjoins companies from selling goods below manufacturing costs on a continuing basis (Knorr and Arndt 2003).

Product/ service failure

Wal-Mart planned to introduce a sophisticated customer service program which threatened many of its competitors because German discount supermarket chains often do not provide good customer service. Therefore, good customer service, combined with low prices, could have been a new market niche in Germany. One part of Wal-Mart’s customer service program was called the “ten foot rule”. Every ten feet, a service employee offered some help to the customer (Knorr and Arndt 2003). However, the customer reaction was rather negative, because customers who normally do their grocery shopping in discount supermarket chains are used to self-service. They do not necessarily expect to talk with employees.

Therefore, the “ten foot rule” was perceived as rather annoying and did not result in a reputation for providing good customer service.

Wal-Mart also imported the idea of placing a “greeter” at the entrance to the store. Again, German customers were not used to this custom, and they did not adopt this “service” with any enthusiasm.

Conclusion of Wal-Mart Mini-case

Wal-Mart tried to apply its US success formula in an unmodified manner to the German market. As a result, they didn’t have sufficient knowledge about the market structure and key cultural / political issues. In addition, structural factors prevented Wal-Mart from fully implementing its successful business model. Also, there were some instances of product or service failure. The final outcome was that Wal-Mart had to abandon its offerings in Germany.

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Wal-Mart in Europe

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About The Author

Gunnar Trumbull

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Wal-Mart in Europe By: J. Gunnar Trumbull and Louisa Neissa

Why Walmart Failed In Germany

It's a place where you can buy your weekly grocery order and get your prescriptions refilled in one visit. It's a place where you catch up on the local gossip with your neighbor in the cereal aisle or watch a fellow shopper in ill-fitting pajama pants buy a single rotisserie chicken. For all its ups and downs, Walmart is no doubt a genuine American institution. Originally a simple five-and-dime general store in Bentonville, Arkansas — a place that still exists as the official Walmart Museum – Sam Walton's store has a long history. While you can find a Walmart superstore just about anywhere in the United States, you're probably not going to hear the name if you head over to Europe.

That doesn't mean Walmart didn't try to expand over in Europe, however. In the final years of the '90s, Walmart attempted to bring old-fashioned American productivity, low prices, and efficiency to the German public (via New York Times ). Unfortunately, Walmart had to say auf wiedersehen to its grand plans in the country by 2006. Just what exactly happened that made Walmart abandon its plans?

Germans simply didn't understand Walmart culture

While we are not vastly different than our neighbors over in Germany, it's safe to say that our customs and culture are not totally alike. Germans are stoic, friendly people who strive for the best in their lives (via LiveScience ), so one would expect that Walmart could thrive as a company that aims to meet all their customer's needs in one store. The reality is that Walmart, with all of its American values, simply didn't fit into German culture. As reported by The New York Times , the worker unions typical in the country were not embraced by the company.

The Global Millennial detailed three more reasons for the failure of Walmart in Germany. The first reason was that Walmart's "employee motivation training" like team-building exercises outside of the store may have come across as too regimented or too silly. Another issue was that German people were uncomfortable with Walmart employees smiling at them so much. Smiling awkwardly at the cashier in line may have been strange for people who typically reserved smiles for close friends and family. The third reason was due to conflicts with Walmart's ethic codes, which required employees to monitor each other in case of misconduct.

Whatever the reasons, it was clear that the corporation's American customs did not align with the culture in Germany. Perhaps one day, Germans and Americans can bond over what foods you should never buy at Walmart .

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Walmart's Downfall in Germany: A Case Study

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A Detailed Case Study on Largest Retail Giant Walmart

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Walmart is one of the largest retail companies in the world. It was founded in 1962 by Sam Walton. The headquarter of this company is situated in the United States. The main aim of the company is to provide consistent discounts, loyal customer service, and fast friendly service.

Walmart’s targets to expand its business in large cities as well as spread retail stores throughout the world. The retail stores of Walmart are divided into four divisions Walmart Supercenters , Discount Stores, Neighborhood Markets, and Sam’s Clubs warehouses. More than 100 million customers are visiting these Walmart Stores.

It is very uncomfortable for small merchants and communities in America. Walmart reaches their town and provides low-cost offers and the best customer service. It is a very bad condition for small merchants and businessmen in America. To downtown merchants, Walmart just comes and takes over all the small stores.

The purchasing power, aggressive marketing and provide low prices to the customer by Walmart, tend to pull out the business by the small merchants. Gradually the dream of Walmart company to become the largest retailer in the world is full filing day-by-day. But, they increase their business by the wrong actions and do not respect the culture or language of the communities.

Timeline Events Of Walmart company Business Model Of Walmart How Walmart Generates Revenue? Walmart’s Marketing Strategy Walmart’s - Flipkart Acquisition

Timeline Events Of Walmart company

The Timeline of events for Walmart company since its inception.

1960: Sam Walton opened his first discount store in Rogers, Arkansas.
1981: Walmart become the largest company in America .
1981: After becoming the largest company in America, they opened their stores in a small Louisiana town.
1983: Walmart opened its stores in Pawhuska and Oklahoma.
1986: Walmart claims that it can restore more than 4000 jobs to American Communities.
1989: They drive a campaign about Environmental awareness that Walmart is aware of land, water, and air.
1990: There are some activist groups against the expansion of Walmart’s store.
31st December 1990: Walmart’s closed its stores in Louisiana.
5th November 1991: Walmart opened up its store in Lowa City.
6th October 1998: Walmart’s founder Sam Walton created a family charity named Walton Family Charitable Support Foundation.
June 1999: Walmart takes over the ASDA Chain (a British supermarket chain), now they have stores and depots across the United States.
2001: Walmart becomes the world’s largest retailer, got huge sales of $191 billion.
July 2003: Walmart opened its stores in Beijing and till now they have 22 stores in China and counting.
2006: Walmart closed its stores in Germany.
July 2007: Walmart is operating more than 2500 retail units in Walmart International and more than 500,000 employers in some countries.
2007: By the ending of this year, they got a net $45 billion sales.
2008: Walmart’s opened its wholesale facility in India. This is the first step of Walmart's to sell products through its retail outlets in India.
2018: Walmart acquired Flipkart for $16 billion and owned 77% stake in India’s largest online retailer brand.

Business Model Of Walmart

There are different business models that are followed by successful companies which vary from time to time. The business model of Walmart is based to eliminate the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs. The main motive of Walmart's business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

The main marketing strategy of the company is based on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price.

Walmart has three important segments.

Walmart U.S

Walmart U.S is operated in the U.S. They provide customers with products and services that are not present physically in stores. They provide their services via the website and mobile application . The website of Walmart company has a special feature that provides a third party to sell products. The company operates its business on various platforms like supermarkets, discount stores, neighborhood markets, and e-commerce websites .

Walmart International

Walmart International is also divided into three sections which are retailers, wholesalers, and other small projects. These sections are also divided into various sections such as supermarkets, warehouses, electronics, apparel stores , drug stores, digital retailers, and many more.

It is the online platform of Walmart’s company i.e., “ samsclub.com ”. This club is consists of memberships of the only warehouse retailer operations. This section includes warehouse clubs in the U.S, as well as samsclub.com.

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How Walmart Generates Revenue?

The Revenue Model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.

Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business. The two main sources of revenue are Product revenue and Service revenue .

Walmart's revenue in the fiscal year ending January, 2020 was $524 Billion.

Product Revenue

Walmart has a wide range of products in various categories:-

In the grocery category, they have products like Daily needs products, dairy products, frozen foods, bakery, baby products, beauty aids, and many more.
Health and wellness category have products like Pharmacy products and clinical services .
The entertainment category has products like electronics products, toys, cameras, movies, music, videos, and books.
Stationary, paints, and hardware, Automotive, sporting goods, crafts, and seasonal merchandise.
Apparel categories include apparel for men, women, boys, girls, shoes, jewelry, and accessories.
Home appliances include home furnishing services, home decor, livings, and horticulture.

Service Revenue

Walmart also provide services to generate revenue in various fields:-

They provide financial services like prepaid cards , money orders, wire transfer, money transfers, bill payments, and so on.
VUDU movie streaming services: This is a subscription-based OTT platform for buying and renting movies, watching TV shows on demand.
Clinical Services include primary health care, Physical and Wellness checks, Clinical lab tests.
Health Insurance services

Walmart’s Marketing Strategy

Walmart's Business Strategy Analysis is one of the most important parts of any business whether it is small or large. It is very important to make an effective marketing plan to survive in the market . Walmart uses the principle of business marketing penetration method which is used to capture the market by offering lower prices and competitive prices to the consumers.

The company follows cost leadership which makes a huge profit for the company. The company provide low prices to the consumer and treated all the customers as king of the market to maintain the relationship between Walmart and the customer.

According to Walmart, there are four factors that drive the customer’s choice of retailer:

Assortment.

One more reason for the success of Walmart is purchasing products from local manufacturers in a bulk in one go and selling in small quantities. Buying from local manufacturers is the benefit for both. Buying more products from local manufacturers means they are creating more jobs and they reduce the unemployment rate. They should provide good quality products at a lower price to maintain a good relationship with customers and continue to get profits in business.

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Walmart’s - Flipkart Acquisition

Flipkart is one of the leading Indian e-commerce brands. In 2018, Walmart takes 77% stakes in India’s largest e-commerce company Flipkart and makes the world’s biggest purchase of an e-commerce company.

After this acquisition the future of eCommerce industry in India has become more competitive than ever.

The three main reasons for the acquisition of Flipkart are Flipkart’s leadership in some lucrative sections, its payment platform and the company’s talent pool.

Walmart’s world’s largest company is to continue to expand its business by improving its strategies day-by-day. The main reason for the success of Walmart is the EDLP system i.e., Everyday Low Price. They are working aggressively to maintain profits, market shares, and provide low prices to consumers. There are many business ideas to gain profit from a market. All depends on how you play the cards for a profitable business.

Walmart has made acquisitions of 28 organizations and has 16 sub-organization.

Feel free to reach us and share your understanding and views on the case study of Walmart. We would love to hear from you.

What is the business model of Walmart?

The business model of Walmart is based on eliminating the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs.

What is the motive behind Walmart's Business Strategy?

The main motive of the Walmart business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

What is Walmart's Market Strategy?

How does walmart generate revenue.

The earning model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business.

What are the main sources of revenue for Walmart?

The two main sources of revenue are:

Product revenue
Service revenue

Is Walmart owned by China?

The Walmart branch in China is majority Chinese-owned. But predominantly it is owned by Sam Walton's many children.

Why is Walmart so cheap?

They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning. Hence, by selling in high volume they can sell it at a cheap price and still gain profit.

What are the sub-organisations under Walmart?

There are 16 sub-organisations of Walmart. Some of them are:

Walmart Labs
Seiyu Group
Walmart Canada

What are the top acquisitions of Walmart?

Walmart has acquired 28 companies. Some top acquisitions are:

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Germany rejects allegations that it's facilitating acts of genocide in gaza at un court.

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Patrick Post

A pro-Palestinian activist works on a protest poster near the International Court of Justice, or World Court, in The Hague, Netherlands, Monday, April 8, 2024, prior to the start of a two days hearing in a case brought by Nicaragua accusing Germany of breaching the genocide convention by providing arms and support to Israel. (AP Photo/Patrick Post)

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"The minute we look closely, Nicaragua’s accusations fall apart,” Christian Tams, a member of Germany's legal team, told the 16-judge panel at the International Court of Justice.

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Case Study: Wal-Mart in Germany:
walmart closes up their shops in germany
Why Walmart Failed in Germany
Case Study Wal-Mart Failure in Germany
(PDF) A Case Study of Wal-Mart.
Walmart Case Study

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The Strange Reason Why Walmart Failed In Germany😱
What store in Germany is like Walmart?
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Walmart Case Study MGT 3020 Business Ethics
He has to study and work at Walmart 24/7
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COMMENTS

Why Walmart Failed in Germany? An Analysis in the Perspective of Organizational Behaviour
Abstract. This case study is a critical analy sis of the failure of Wal-Mart stores in Germany under the. context of organizational behavior. For achieving the purpose, relevant theoretical ...
Case Study: Wal-Mart's Failure in Germany
Wal-Mart's Entry and Operation in Germany. Wal-Mart's initial entry into German market was through the acquisitions of renowned 21 store Wertkauf chain for an estimated $1.04 billion in December 1997.It was followed one year later by the acquisition of In-terspar's 74 hypermarkets from Spar Handels AG, the German unit of the French Intermarche Group , for ‚¬560 million.
9 Reasons Why Walmart Failed in Germany (Full Guide)
Walmart's failure in Germany stands as a classic business school case study in how cultural arrogance can blind a successful company from seeing dangers in a new market. Walmart failed to deeply research the German retail landscape, regulations, and culture. They projected false assumptions based on their American model rather than gathering ...
Walmart in Gemany: 5 Reasons They Failed
In 1997, Walmart decided to head for Germany and bought two German retail chains — Wertkauf, for €750 million — and Interspar, for a whopping (Deutsche Mark) DM 1.3 billion. But Walmart's global fame and aggressive entry into foreign markets didn't work out well in Deutschland.
Why Walmart Failed in Germany and Europe: The Main Reasons
5. Employees Felt Uncomfortable With Walmart's Practices: It wasn't just the pay and lack of worker rights that upset Walmart employees. It was also some "team-building" practices that many Germans didn't feel comfortable doing. At Walmart, workdays started with light exercises and motivational chants.
Walmart's Downfall in Germany: A Case Study
The leading German retailer was Metro Group followed by Rewe Group. Germany's top ten retailers captured 30% of the total retail sales in 2001. Retail market growth rates had averaged at 0.3% per year in the 1990s. Pro t margins in Germany were also low for retailers compared to retailers' margins in other European countries.
Barriers to 'US style' lean retailing: the case of Wal-Mart's failure
O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence; O5 - Economywide Country Studies ... Susan Christopherson, Barriers to 'US style' lean retailing: the case of Wal-Mart's failure in Germany, Journal of Economic Geography, Volume 7, Issue 4, July 2007, ...
Case, example of product failure: Wal-Mart in Germany, 1997 to 2006
Wal-Mart is the biggest food retailer in the world and has a presence in several nations. In some nations (e.g. the US, Canada, China), Wal-Mart is a great success. However, Wal-Mart has failed in some countries (e.g. Germany, South Korea). First, we describe Wal-Mart's failure in Europe's largest economy. Second, we use Wal-Mart's ...
Wal-Mart in Europe
Presents challenges facing Wal-Mart during its move into Germany. Explores the dynamics of the German retail market. Keywords. Globalized Markets and Industries; ... Trumbull, J. Gunnar, and Louisa Neissa. "Wal-Mart in Europe." Harvard Business School Case 704-027, April 2004. (Revised July 2019.) Educators; Purchase; About The Author. Gunnar ...
Why Walmart Failed In Germany
The third reason was due to conflicts with Walmart's ethic codes, which required employees to monitor each other in case of misconduct. Whatever the reasons, it was clear that the corporation's American customs did not align with the culture in Germany. Perhaps one day, Germans and Americans can bond over what foods you should never buy at Walmart.
Why Walmart Fails in Germany? An Analysis in the Perspective of
This case study is a critical analysis of the failure of Wal-Mart stores in Germany under the context of organizational behavior. For achieving the purpose, relevant theoretical approaches of Organizational Behavior will be engaged and used as an analysis tool for evaluating the real factors of significant failure of Wal-Mart stores in the lively economy of Germany.
Why Walmart Failed in German Market: A Critical Analysis
Jui, P (2011) Walmart's Downfall in Germany: A Case Study. Journal of International Management, 12 (3), pp7-8. Kotler, P (2012) Marketing Management. UK: Pearson Education. Landler, M., and Barbaro, M (2006) Wal-Mart Finds That Its Formula Doesn't Fit Every Culture, New York, August 2, 2006
Walmart's Downfall in Germany: A Case Study
Walmart's Downfall in Germany: A Case Study By: Phoebe Jui In 1997, Wal-Mart had entered in the German retail market through acquiring the failing German retail chain Wertkauf but quickly encountered problems. Wal-Mart had demonstrated phenomenal success in the US by providing an Every Day Low Prices guarantee, inventory control, and ...
Lessons from Walmart's Failure in Germany.
When Walmart announced the end of its German business effort in 2006 and transferred its stores to a local rival, it was the culmination of an enormous corporate undertaking. To sum up, Walmart's misadventure in Germany is a collection of cultural blunders and strategic errors that provides a priceless case study for future corporate executives.
PDF Case Study: Wal-Mart's failure in Germany
Wal-Mart's failure in Germany- A Case of cultural insensitivity: Most of the Global mergers and acquisitions failed to produce any benefit for the shareholders or reduced value, which was mainly due to the lack of intercultural competence. Lack of sensitivity and understanding of language barriers, local traditions, consumer behavior ...
Case Study
Case Study - Wal-Mart Failure in Germany - Free download as PDF File (.pdf), Text File (.txt) or read online for free. Scribd is the world's largest social reading and publishing site.
Walmart Case Study
Read the case study of Walmart. Walmart targets to expand its business in large cities as well as spread retail stores throughout the world. Read the case study of Walmart. ... 2006: Walmart closed its stores in Germany. July 2007: Walmart is operating more than 2500 retail units in Walmart International and more than 500,000 employers in some ...
Germany rejects allegations that it's facilitating acts of genocide in
Germany is strongly rejecting a case brought by Nicaragua at the United Nations' top court accusing Berlin of facilitating breaches of the Geneva Convention and international humanitarian law by ...
Why is Nicaragua taking Germany to court for 'facilitating ...
Nicaragua has brought an international legal case against Germany accusing the country of "facilitating the commission of genocide" against Palestinians in Gaza via its arms exports to Israel.