Retail giant from U.S Walmart failed to get a foothold on the Garman market a large number of reasons. Few ones are as below:
Cultural reasons:
Analysts still argue what are the reasons why Walmart failed in Garmany. Among them are a number of cultural-related reasons:
One of the important reason why Walmart unsuccessful in Garmany because management didn't take into account Garman consumer habits. Management's mistake was to implement a successful U.S formula into Germany without paying any attention to local market. The problem was the company's business philosophy-”It people centred” but company didn't take account these people are not American. (kwintessential.co.uk)
Problem was increasing when company gave the job masterminding Walmart
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They reported that shoppers were turned off by Walmart staff hire to greet them at the door and bag their shopping. These sort of thing was then and still now unusual practice in Germany. The company also scraped the staff warm sessions scheduled at the start of every day which Garman staffs found them ridiculous. Walmart's ethical codes caused much frustration as well. Spying co-workers and repot them to management might acceptable in U.S.A but in Germany it is not the case. Enormous amount of frustration among the employees caused by such a situation.( …show more content…
Like Germany Walmart didn't buy stores in Mexico which are second class operators. The acquisition of domestic retail chain Grupo Cifa already dominated Mexican retail industry before took over.
As a discounted brand name Walmart wasn't popular in Germany and South Korea. Aldi chain in Germany and E-mart in Korea already established as a discounters. But things were different in Mexico-Mexican customers are bargain hunter, as long as they buying items cheap they do not have any problem where these items are coming from. In Germany and South Korea Walmart find difficulties to compete other competitors like Aldi and E-mart but in Mexico when Walmart published their price comparisons other retailers were out ranged. (asainconsumerinsights.blogspot.co.uk)
Moving to Asia, Wal-Mart break with the Indian giant Bharti Group made them in charge of the wholesale business where foreign retailers may invest freely and left them with around 30 small operating stores in the country. Moreover, Wal-Mart is also targeting China with 400 stores, in an opportunity to increase their growth in sale. Trefis Team (2015)
Some people raise a concern about employment practices with Wal-Mart. There are definitely two sides to this argument. Wal-Mart has been sued recently for allegedly making employees work overtime, off the clock, in order save money in payroll expenses. There has also been concern of the amount of money that Wal-Mart pays employees. Many employees have complained of being paid only minimum wage for extended periods of time. On the other hand, Wal-Mart has created thousands of jobs in small communities when stores open up. This has helped many communities that struggle with high unemployment rates. Another thing that Wal-Mart has done is allow anyone displaced by hurricane Katrina to be placed in a job at any other Wal-Mart in the country. One other questionable employment practice that has been brought up by employees is discrimination. Wal-Mart has been the plaintiff in many discrimination law suits in recent years, claiming that Wal-Mart discriminates in many ways against women and minorities. I guess the employment practices of Wal-Mart could be looked at as favorable or unfavorable depending on how you look at it. However, one has to wonder if Wal-Mart creates programs like the hurricane Katrina program just in order to create positive publicity.
These conditions are brought about by the enormous pressure Wal-Mart has put on their suppliers. Their sheer size enables them to negotiate whatever they want. Suppliers rarely dare to request a price increase, and they are very conservative when giving price quotes to Wal-Mart. To lose Wal-Mart as a customer can mean the end of business for many suppliers. It’s hard to combat this downfall when Wal-Mart has so much buying power-- countries send government officials to Bentonville, Arkansas to lobby for production in their country.
Wal-Mart has been found guilty of discrimination against women employees, minorities, demeaning workers with disabilities and inequality based on sexual orientation. Wal-Mart was found guilty of gender bias in 2004. Customers have sued Wal-Mart claiming racial profiling as have a group of bla...
The success of Wal-Mart is so great, that many people believe that Wal-Mart is becoming a monopsony . Suppliers are forced to deal with Wal-Mart because of the large percentage of sales at Wal-Mart cash registers. As such, Wal-Mart also has the ability to dictate prices of the goods it receives from the suppliers. Every day, more and more retail stores close their doors for good because Wal-Mart controls such a huge margin of the retail sector.
Thirdly, there are areas both domestic and abroad relatively untouched by Wal*Mart: large cities. Though it may seem like untapped potential in these markets, it is not recommended to expand in these highly populated areas. The axiom, “If it ain’t broke, don’t fix it,” applies: If Wal*Mart were to do an about-face and start expanding in this form, it would send mixed signals about not only changes in the corporate strategy, but also about the future of this conglomeration of stores. This is especially poignant at this volatile time in the price of their stocks. They should also be extremely cautious in the acquisition of existing discount retailing companies. As the industry becomes more concentrated, Wal*Mart’s selectivity in large acquisitions extends beyond just profits. Many times, Wal*Mart could better spend their resources by improving existing stores or building new ones because they can build them around their ideologies at a much lower cost than through purchasing other companies. Again, this is not to say they should not expand in this manner, just that they need to be extremely selective when doing so.
First, Wal-Mart mistreats their employees. Wal-Mart is known to have the lowest prices out of any other store. A consumer never realizes how Wal-Mart manages to have such low prices. One may think that Wal-Mart goes into a loss for the sake of their customers, but I beg to differ. Wal-Mart buys all of their products from other countries. They have warehouses and production plants in other poor countries such as China. These warehouses are often referred to as "sweatshops", often due to the terrible conditions that the workers have to bare. This saves a lot of money when it comes to wages, since countries like China have no minimum wage laws. The workers range from every age possible. It would be hard making a living when a person only gets paid a dime a day. Also, Wal-Mart does not have to provide benefits or insurance to any of these out-of-country workers. If Wal-Mart was such a great company as people think it was, they should instead make production plants over in the United States. Havin...
The top two reasons for such success in ranking first in retail store market, is because Wal-Mart is convenient globally and so are there prices in the competitive market . Wal-Mart has three segments which are superstores, discount stores, and Sam's Club stores, all of these are scattered in the United States, Canada, Mexico, Europe, Brazil, and Asia. One downfall was from Sam's club because too many were opening all over internationally it decreased the number of customers per location. Overall despite the company's decline on Sam's club sales, the Corporations did well over all with the figures brought in and conditions.
A past spokesperson for the company has gone on record as stating that Walmart stores are visited by almost 100 million people per week, and with billions of yearly revenue and the significant amount of publicity the company gets, it is almost as if the company has a bullseye on its back (Willing, 2001). Is it possible that Sam Walton was mistaken when he thought that large discount stores could be as successful as smaller ones? From a marketing standpoint the tarnished reputation of Walmart is making the company appear to be more of a curse to the local area in which the store inhabits, than a
"We know from our experience and international relations that even in the U.S. workers are not allowed to join unions within Walmart," says Mike Abrahams, a spokesperson for South African Commercial, Catering and Allied Workers Union. "We know from our experience internationally that where they have moved, they systematically eroded workers’ rights and things like that. We don 't want them here." He added that unions are opposed to the merger. Unfortunately for the unions, in 2011 Walmart did purchase the majority stake in Massmart Holdings Limited, the leading African retailer of general merchandise, home improvement equipment, and supplies. Since Walmart is willing to work with unions to expand into foreign countries, why would they be so adamantly opposed to unions
The opportunities to acquire other companies in Europe, Asia, and South America are virtually unlimited, and Wal-Mart always has the option to build its own stores there as well. Wal-Mart has also created additional opportunities for itself by designing several formats for its stores. The superstore concept which is such a success in the U.S. can be used in foreign countries where indicated, but Wal-Mart has also developed other store concepts that it can use where conditions seem to favor them: discount stores, neighborhood markets, and Sam 's Club warehouses, in addition to Internet web sites in the native language of the country ("Wal-Mart Fact Sheets"). Wal-Mart can exploit its opportunities by developing distinctive branding such as the Sam 's Club for every segment of its
Wal-Mart and Target are two similar global corporations. If one asks each of these store’s customers why they shop there, somewhere in their answer one will find them saying that they can find everything. The difference between these two corporations is their mission, marketing, and quality. Each of these stores are looking to offer a different experience despite selling similar goods. So, when profits are not changing in the United States, they’ve opted for an expansion into other countries. They have opened stores and provided services outside of the United States.
Walmart has had a long-standing presence in America society since the middle of the 20th century, seen as a place to get everything done, Walmart has become a fixation in our society. From grocery shopping, to changing your oil and even filing your annual tax returns, Walmart is always there, everyday. Started by Sam Walton in 1962, it began as a small operation catering to a small Arkansas community. It was started on principles very similar to small local businesses in small towns. Today Walmart has gotten a different, darker reputation. On the surface, Walmart may seem like the solution to everyday issues. Low-income families are attracted to the low prices, and people who work odd hours benefit greatly from the 24 hours a day that many Walmarts are open. Lately, Walmart has also managed to be publicly recognized as a store that sells many of today’s green products, including organic food, environmental conscious cleaning products, as well as, paper products made from recycled paper. However, underneath all this, Walmart has a different side. Exploitation of its workers is widespread amongst Walmarts who do not belong to a union, especially in the United States. Wal...
At the first, Wal-Mart only operates its business in home country. However, Wal-Mart became more integrated and independent by expanding internationally. In 1991, Wal-Mart start expands the business at international level which includes 26 countries outside of the United State such as Mexico, China and Canada. Now, Wal-Mart totally has more than 6100 stores in foreign country. The step taken by Wal-Mart is to improve and maintain their achievement outside of the home country. Wal-Mart’s strategy which expands their market at international level gains a lot of benefit to their business.