Wal-Mart
Heidi Gallegos
ETH/316
May 26, 2014
Carmela Levy-David
Sam Walton opened the first Wal-Mart 52 years ago in Rogers, Arkansas. His goal was to open a store that would allow its customers to save money while receiving great customer service. Five years after the first Wal-Mart opened their doors there were twenty four stores open, bringing in more than $12.7 million in sales. In 1969, Wal-Mart became a corporation, Wal-Mart Stores, Inc. By 1980, there were 276 stores and employed 21, 000 associates (“Wal-Mart”, 2014). In 1991, Wal-Mart went global with opening its first international store in Mexico City, Mexico. By 1999 they had store in Mexico, China, Canada, and the United Kingdom. Today, there are Wal-Mart stores in Africa, India, Japan, China, Mexico, United Kingdom, Canada, Puerto Rico, and South America. “Walmart operates more than 10,000 retail units under 71 banners in 27 counties. We employ 2.2 million associates around the world – 1.3 million in the U.S. alone” (“Wal-Mart”, 2014) Even with all of Wal-marts success there are still three countries not hoping on the Wal-mart ban wagon; Germany, South Korea, and Russia. For nearly six years Wal-Mart tried to find a promising partnership in Russia with no success. With its headquarters set up in Moscow, Russia Wal-Mart tried to work out a deal to partner up with or buy out one of Russia’s largest discount chains, Kopeika. Unfortunately for the multi-billion dollar company, Wal-mart was beat out by a larger discount company in Russia. Wal-mart than decided to give up their efforts to open up shop in Russia and closed their Moscow, Russia headquarters. As for Germany and South Korea, Wal-mart had their foot in the door by opening stores in each country but failed to adapt their American policies to fit in with their local markets and in 2006 stores in both countries decided to close the doors. “Its German venture ended disastrously, with the retreat costing the company $1 billion” (Schultz, 2006). Wal-marts problem was that it tried to use its American sales strategy and did not pay attention to local idiosyncrasies. The problems in Germany did not end with that but it also gave a head position to an American, whom did not speak the local language, German. This in turn did not help the company learn about the Germans local shopping habits. Wal-mart also received bad press because their shoppers were unhappy with door greeters and how cashiers bagged their groceries. German’s find the practice of having your bags filled to be an unusual practice. Male consumers were also uncomfortable with smiling cashiers because they felt as if it were a form of flirting. “…Wal-Mart operated what the newspaper Handelsblatt described as “bizarre company culture” (Schultz, 2006). Germany is also a country that thrives on stability and the way that Wal-mart manages its company and its associates, Germany did not find its turnover rate to be very stable, this also assisted in the ending of Wal-Mart in Germany. “Wal-Mart's German failure could be summed up by a German proverb - translated, it means: "A nightmarish end is better than a nightmare that doesn't end."” (Schultz, 2006). As for South Korea Walmart seemed to follow in their same pattern of not learning the customs of their locals. As stated by “Sebastian Marshall”, Korean’s work a lot of hours and when they are not working “…they want the best. Not the best price. The best.” (Walmart failed in Korea because of a lack of walking around). Like in Germany Wal-mart failed to learn their market place and the local shopping habits; and focused on their American strategy. The big box retailer failed to appreciate South Korea’s largest products; food and beverages. All global organizations have a lot to consider when opening up shop in the different countries. In order to be successful companies need to know their desired locations shopping habits and customs. The problem
