Professional Documents
Culture Documents
More
Next Blog
Create Blog
Sign In
about me
Arun Kottolli MBA from University of Texas; M.S.E.E from Texas A&M University; View my complete profile
blog archive
2013 (19) 2012 (53) 2011 (36) 2010 (1) 2009 (12) 2008 (19) 2007 (42) 2006 (101) December (12) November (9) October (11) September (11) August (13) Improving communication with Indian Engineers Nature of Virtual Teams Motivating Employees when business is down Power of C hoice Five Steps to Build a Strong Brand Managing Virtual Project Teams Distinguish Yourself As a C ulturally Diverse C andi... Trans-cultural Business Failure: Wal-Mart Exits Ge... Encourage Diversity to attract top talent Successful Marketing for a Midsized Organization
1/5
20/11/2013
behavior in Germany when compared to its US customers, and the top management failed to listen to the feedback from its employees. 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 dont have the habit of spending lots of time in a store - wandering around for the things they need. C oupled with this problem, German customers do not like to be assisted by Wal-Marts friendly store assistants. Germans prefer to do their own search for bargains. Wal-Mart got its store merchandising wrong: 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. Wal-Mart also failed to achieve the required economies of scale. To implement its US style hypermarkets, Wal-Mart invested in a robust distribution system with three warehouses and logistics centers - this implied higher cost. To be efficient Wal-Mart needed about 400+ stores, but it had only 85 stores. The biggest mistake of Wal-Mart was to ignore the local culture, local buying habits and impose an American boss on its German operations. The first head of German operations was an expat from the USA - who did not understand Germany or its culture and insisted that all business operations be carried out in English language. I have not met him in person or even interacted with him - but from what I hear and understand, it is clear to me that the cultural insensitivity started right at the top. Closing Thoughts C ross-border, C ross-cultural business is a challenge even for the biggest companies. C ompanies have to be sensitive to the local cultures and tailor their offerings to local market. To localize their offerings, companies must carry out cultural assessment before acquisitions, maintain an ongoing cultural assessment of its foreign operations. This will help companies measure the effectiveness of its localization efforts and make adequate changes in local strategy & tactics. The Wal-Mart example tells us that even the biggest of the companies are not immune to failures. C ompanies need to understand the local culture in order to capitalize on the local market. The lessons learned from Wal-Marts experience in Germany, Korea and Japan can be applied by other retailers who are planning on expanding in India & C hina. Large retail chains such as Tesco, Metro, C arrefour, Home
arunkottolli.blogspot.co.uk/2006/08/trans-cultural-business-failure-wal.html
Keep Overseas Staff Focused on the Right Goals Marketing - Avoid Revenue Roller coaster Trap Who is a successful Marketer? July (10) June (6) May (9) April (5) March (8) February (3) January (4) 2005 (52)
share it
Share this on Facebook Tweet this
View stats
(NEW) Appointment gadget >>
Submit
whirlpool of colors
2/5
20/11/2013
Depot, etc., have to be very careful when they plan to invest in countries outside their home markets. Indian market offers tremendous opportunities for these organized retailers - but it also comes with tremendous challenges. Indian consumers have deep rooted cultural biases which must be understood and overcome in order to succeed in India. Also See: Keep Overseas Staff Focused on the Right Goals C ultural Assessment - Prerequisite for successful Mergers Promoting Organizational C hange Through C ommunication posted by arun kottolli at 10:55 am labels: marketing, working across cultures
16 comments:
pradeep said...
excellent article. very insightful. you inspire me to start blogging. 12:33 PM
pradeep said...
forgot to mention.. ur blog goes into my favourites.. 12:34 PM
subscribe now!
Subscribe in a reader
ayesha said...
Good stuff, topics are wide and well written, thanks for your help! albeit received indirectly... 8:30 PM
bookmark me!
books i recommend
Product lines for digital information products by Victor Pankratius Software Product Lines in Action: The Best Industrial Practice in Product Line Engineering Fundamentals of Product Design by Richard Morris Innovation on Demand - New product development from TRIZ Think Strategically Stay Hungry Stay Foolish C onnecting the Dots by Rashmi Bansal Walter Isaacson - Steve Jobs Biography Entrepreneurship and Small Business Breakthrough Business Development C atch 22 Guerrilla Marketing: Secrets for Making Big Profits from Your Small Business Making Innovation Work: How to Manage It, Measure It, and Profit from It
3/5
chobitz_news said...
Good article, but stores in Germany do noct close at 5 p.m., it's between 7 and 10 p.m. depending on the store... 10:32 AM
rohit said...
hey arun i tired contacting you on orkut but could not, your work is really nice I am doin my dissertation on indian retail sector in food an opportunity for foreign investment. 3:31 AM
rohit said...
hi this is really good can u please give me your contact number I really need to speak to you, or your email id, my id is RC 548@mdx.ac.uk 3:32 AM
20/11/2013
C ross-C ultural aspects into consideration. This will be a great help for all students and those who have any interest on International Business. 8:06 AM
The Essentials of the New Workplace: A Guide to the Human Impact of Modern Working Practices Mastering the Hype C ycle: How to choose the right innovation at the right time Business Process Outsourcing: Process, Strategies, and C ontracts The Heart of C hange: Real-Life Stories of How People C hange Their Organizations Leading C hange by John P. Kotter Blink: The Power of Thinking Without Thinking C rossing the C hasm The Innovator's Dilemma The Ten Faces of Innovation The World Is Flat New Product Development Seeing What's Next: Using Theories of Innovation to Predict Industry C hange The Killer Innovation History of Tippu Sultan by Mohibbul Hasan The C ase of the Bonsai Manager Business the Richard Branson Way The New Age of Innovation: Driving C ocreated Value Through Global Networks Marketing Management Algorithms for VLSI Physical Design Automation Programming Perl A Verilog HDL Primer Kanthapura Influence: Science and Practice New Product Management Open Innovation: The New Imperative for C reating And Profiting from Technology Shantaram
vishal said...
This comment has been removed by the author. 6:40 AM
vidaguevra said...
Earning money online never been this easy and transparent. You would find great tips on how to make that dream amount every month. So go ahead and click here for more details and open floodgates to your online income. All the best. 11:05 AM
kellybrook said...
Earning money online never been this easy and transparent. You would find great tips on how to make that dream amount every month. So go ahead and click here for more details and open floodgates to your online income. All the best. 12:07 PM
mahipal said...
This comment has been removed by the author. 2:29 AM
mahipal said...
Dude i am about to write a long ass paper on Wal-Mart and its failures in germany.You made my job easier bro.. 2:31 AM
radhakrishna said...
excellent friend 4:41 AM
mariam said...
Has anything ever bothered you in life? Do you have any problem you need to solve? A pending court case you want to resolve in your favor? Health, relationship and finance. Welcome to the world of miracles and wonders, there are supernatural treasure and power to liberate mankind from all afflictions. Why cant you live a life of your dream? Why must you work so hard and yet earn so little? Why cant you be happy with the one you love and desire or why cant the one you love reciprocate and appreciate that love? Why would the doctor tell you there is no solution or cure to your problems? Why would your lawyer say you stand no chance, that your case is hopeless? Have you been cheated by anyone or those owing you money refuse to pay back? Do you need a rapid job promotion in your place of work? You want to venture into politics? Now I understand certain things are hard to believe and comprehend, but all I ask from you is only 3 days and if you will follow my instructions and use the items you will receive, I promise your life will never be the same again.If you find no relevance in the help I offer
arunkottolli.blogspot.co.uk/2006/08/trans-cultural-business-failure-wal.html
my blog list
Anuradha Goyal
W arangal Fort in C hanne l6 Magazine 21 hours ago
Innovate on Purpose
The Five Source s of Innovation C onsultants 2 days ago
IDEAFEST
Got m y conne ction to Sachin, Thank s to BC C I!! W e will m iss you Sachin!! 4 days ago
4/5
20/11/2013
I solemnly appeals do not be vindictive and go in peace. And if your intentions are to take advantage of the powerful nature of our items for the purpose of evil, I will not have any business with you please be advised. May angels guide you. All inquiries should be directed to the Priest Abija email below Email: spirituallighthealing101@live.com or you can sent a text message to this number:(518) 303-6207! 10:24 PM Post a C omment
My Life, My Rules!
About a 3D Print Party: In O pe n m agazine this we e k 6 days ago
On Product Management
How m uch can one he ad hold? 1 week ago
SPOTLIGHT IDEAS
W hat is Virtual Private Se rve r or VPS? 4 months ago
Karthik's talk
PAR AMAC HAR YA Photo Karaik udi...... 1 year ago
shwetha-kottolli
O n De e pawali 2011 1 year ago
The Forrester Blog For Technology Product Management & Marketing Professionals
Forre ste r buys Jupite rR e se arch 5 years ago
Pragmatic Marketing Pragmatic Marketing Welcome to Nine Dots Creative Think Juice MarketingProfs - Marketing Resources for Marketing Professionals
arunkottolli.blogspot.co.uk/2006/08/trans-cultural-business-failure-wal.html
5/5