Walmart Debacle of Germany - 2078 Words

Wal-Mart in Europe Table of Contents Executive Summary 2 Wal-Mart Background 2 Wal-Mart’s Culture 2 Wal-Mart’s Strategy 3 Problems/Criticism faced by Wal-Mart 3 Wal-Mart in Germany 4 Key Issue: Wal-Mart’s Failure in Germany 4 Situation Analysis 5 Porter’s 5 Forces Model 5 Wal-Mart: Germany vs. Britain 6 Challenges in Germany 7 Evaluation of Alternatives 10 Recommendations 10 Executive Summary The world economy has undergone a drastic revolution in the last three decades through globalization. This has made the world economy more efficient and competitive, by enhancing product quality, increasing the product variety and lowering price. With successful expansion in locations like Mexico and Canada, in†¦show more content†¦Key Issue: Wal-Mart’s Failure in Germany Wal-Mart’s strategy to replicate the successful U.S. formula of Everyday Low Price (EDLP) guarantee, efficient inventory control and distribution system resulted in significant cross-cultural issues with Germans consumers and suppliers. Moreover, the top management failed to anticipate the cultural differences between the German culture and the Wal-Mart culture. The key issues faced by Wal-Mart were: * Unable to recognize the German consumer behaviour and culture in comparison with US * Entry to German market by acquisition strategy * Laws and regulations – zoning and limited stores hours * Failure to deliver on its legendary â€Å"every-day low prices† and â€Å"excellent service† value proposition. * Underdeveloped supply chain relationship * Absence of local brand name * Poor relationship with suppliers Situation Analysis Porter’s 5 Forces Model Bargaining Power of Customers – Very High * German customers not accustomed to friendly atmosphere * Presence of strong German competitors * Low cost from competitors Bargaining Power of Suppliers – Very High * Poor suppliers network * Centralized distribution system not accepted by German suppliers * Suppliers with strong connection to local players * Low switching cost due to abundance of retail companies Competitive Rivalry – High * Huge competition from local players like Metro, Aldi etc. *Show MoreRelatedCase Study on Walmart681 Words   |  3 PagesUnited States, WalMart pulled the plug on its German operations and left that market with its business tail stuck between its legs. Headlined in the Times was the fact that WalMart, the worlds largest retailer, abruptly pulled out of Germany yesterday (Times, 2006). WalMart sold the 85 stores it owned and operated to a competitor writing off approximately $1 billion. This is an interesting case study in that there are a variety of reasons behind WalMarts failure in Germany; not least amongRead MoreBest Buy S Turn Around Strategy13959 Words   |  56 Pagesas the best buy.7 As Joly saw it, Best Buy had a lot of strengths on which to build, in spite of its disappointing financials. It sold far more consumer electronics than either of its largest competitors ($50 billion compared to ~$30 billion for Walmart and $14 billion for Amazon), and dominated the PC, camera, and tablet categories in terms of market share. It had state-of-the-art logistics, inventory, and support systems that enabled it to make same-day deliveries for online orders. Meanwhile,Read MoreWalmart Case Study4489 Words   |  18 PagesSeptember 30, 2005, the Company had 1,253 Wal-Mart stores, 1,876 Supercenters, 555 Sam’s Clubs and 95 Neighborhood Markets in the United States. Internationally, the Company operated units in Argentina (11), Brazil (151), Canada (261), China (49), Germany (88), South Korea (16), Mexico (730), Puerto Rico (54) and the United Kingdom (295). Executive Summary Wal-Mart has grown into one of the largest discount retail stores in the world and has proven that the type of operation that they have isRead MoreMonsanto: Better Living Through Genetic Engineering96204 Words   |  385 Pagesof a link between cochlear implants and bacterial meningitis (a potentially fatal infection of the lining of the surface of the brain). There were 43 such cases and 11 people died. There were reports that implants had been withdrawn from sale in Germany, France and Spain. On 25 July the FDA updated its warning and said it had now learned of 118 cases.12 Cochlear responded to the crisis quickly. Graeme Clark claimed that the infection was related to a design change by their competitor, Advanced BionicsRead MoreManaging Information Technology (7th Edition)239873 Words   |  960 PagesCity CASE STUDY I-5 Data Governance at InsuraCorp CASE STUDY I-6 H.H. Gregg’s Appliances, Inc.: Deciding on a New Information Technology Platform CASE STUDY I-7 Midsouth Chamber of Commerce (B): Cleaning Up an Information Systems Debacle CASE STUDY II-1 Vendor-Managed Inventory at NIBCO CASE STUDY II-2 Real-Time Business Intelligence at Continental Airlines CASE STUDY II-3 Norfolk Southern Railway: The Business Intelligence Journey CASE STUDY II-4 Mining Data