Professional Documents
Culture Documents
Analysis
Course Name International Business [INB 372]
Section 13
Industry: Retail
Business
Report ON
Wal-Mart Standard Case
Assigned BY:
Mahmud H. Zaman [Mhz]
Faculty Member
Department of Marketing & INB
School of Business and Economics
North South University
Prepared BY:
No Name: ID:
01 Syed Atabur Rahman Tuhin 142 0296 030
02 Md. Saiful Islam 142 1724 030
03 Nabila Hafiz 141 0545 030
04 Rifat Hossain Khan 141 1038 030
Answer To the Question-1
Following are the attributes to cultural differences that Wal-Mart lacked in
entering the German market:
Wal-Marts central value plan every- day low prices was a hollow assurance
to the consumers.
German shoppers are tough to please. They are used to bagging their own
groceries and did not accept the idea of clerks doing that which is common is
USA.
In USA Wal-Mart provides 24/7 shopping facilities but Germany has restrictive
shopping hours regulation which was not in their favor.
They are thinking that their USA success was giving them an edge to
create market hype among the German people. But it is not strategically fit
in Germany because of the cultural, political, social difference between two
countries. There is a lot of loopholes was seen in the Wal-Mart strategies that
they are not fit with the German tradition and internal politics they are not
much aware about the rules and regulation in Germany(like-Labor Union)
Making strategy based on Competitor: they are not much aware about
their competitor and substitutes.
Wal-Mart German Failure Story is just Express their lack of Experience by that
time. Their Entry strategy in Germany was just immature in look which is
about to a source of learning for them for the future expansion.
Then Wal-Mart started centric approach which has created a problem in the
management level. Moreover, Wal-Mart has faced enormous problem in
political sphere. Also ethical caused much trouble in the germen market
economy. Wal-Mart has experienced four presidents in eight years business.
So, Wal-Mart has internal problems. That's way, people consider this
company as a weakest company in the Germany industry environment. The
national trade union also warned Wal-Mart to comply with law. This fact is
threat for Wal-Mart. In 2006, at the Berlin Film Festival, a movie was released
about Wal-Mart makes the high cost of low prices. Those facts backfired
the Wal-Mart marketing strategy.
So, the industry environment was critical in Germany for Wal-Mart to perform
better in this scenario with their poor strategy and flawed entry-by-
acquisition strategy, unable to cope up with cultural differences, ignoring the
customers purchasing power strategy and the arrogance of their top
management team are the specific aspects of the industry environment
which played key roles.
These effects have been anticipated prior to market entry because Wal-Mart
didn't started its first business on Germany. It should aware the facts that
this situation can be created. So, it can easily said that if they started their
business after analyzing the market segmentation and the nature of market
and how to dominate in the German market economy, they didn't fall this
problems.
They should have to do a proper home study and comes up with the
new and innovative strategy compared to its competitors. They have to find
what has done in the industry by their competitors and question them about,
how many the competitors are already entered into this market before? What
obstacles they face? How did they cope up with the new market? And most
importantly, what would we go to do business there in different way than our
competitor?
If they want to go for acquisition they have to consider how much they
get benefit from this acquisition and have to consider its alternatives and
comparing the alternatives and choose which is fit in terms of companys
value delivery Chain and its theme.
It also faced bad publicity during its operation. Wal-Mart failed to comply with
the law and the national trade union organization issued warnings to all
union members about it.
A film named Wal-Mart the high cost of low price exposed Wal-Mart for
behaving unethically towards employees and suppliers and for its corrupt
dealings with local politicians.