WHY WALMART FAILED IN GERMANY

1、case 4.1 : walmarts misadventure in germany course:msc in strategic marketing module:international marketing (bst 248) lecturer: dr. stephanie slater date:monday, 23rd november 2009 group t1 members aneeq ahmed ya-han chen tsz-sin leung wei liu pussarin phalitnonkiat dandan ren kerstin walter 1 2 ag

2、enda 1. milestones in the walmart history 2. walmarts strategy 3. why did walmart fail in germany? 4. strategic options milestones in the walmart history 3 1962sam walton opens the first store in rogers / arkansas (usa) 1967sales reach $12.6 million with 24 stores 1980walmart sales cross over 1 bill

3、ion dollars $1.4 billion from 276 stores 1991walmart goes global joint venture in mexico with cifra 1993walmart opens international division 1997walmart entered the german market 2002walmart records the highest single-day sales in history $1.43 billion on thanksgiving 2003walmart becomes the largest

4、 retailer in the world sales of $244.5 billion with 4688 stores worldwide 4 walmarts strategy 1. strategy based on four pillars: entry mode price customer orientation supplier relation 2. swot analysis 1正确的步骤； 2认识新员工的优点，针对其特长安 排工作； 3协助新员工养成随时汇报工作、与 上级联络、与同事商量的习惯； 4不仅注重结果，还要注意工作过程、 方式方法，先求质量后求数量； 5使员

5、工了解工作的严格性，不走样 地执行上级意图； 6培养员工的时间观念，尽量不给别 人增添麻烦。 如何进行实际操作训练如何进行实际操作训练 学会思考，少闹情绪 情绪是一种能够在数小时、数日、甚至数周内控 制和影响人的心境和感受的心理状态。 赶紧在心里默数数字，或者做深呼吸，这些方法 能有效地使你平静下来。 要控制你的情感，这是你社交成功的必要心理基 础。 工作一段时间的跟踪训练工作一段时间的跟踪训练 这种跟踪训练可分为两种： 1、将员工进公司时因某种条件不具 备而没有施行的教育训练重新施 行，以帮助员工弥补欠缺的知识 和能力； 2、从员工工作中反馈的情况、出现 的问题人手，对过去的训练计 划 再作

6、修正，调整训练内容。 去谈论他感兴趣的吧 谈论别人感兴趣的话题。 惟一能影响别人的方法，是谈论他所要的，教他 怎样去得到。 与人谈话时最佳反馈方式不是评论，而是作描述 性的回答，或是以简短的语言复述对方的谈话。 把朋友的秘密锁在心里，钥匙扔向 大海 朋友间必须是患难共济，那才说得上真正的友谊。 信用不是一朝一夕所能建立起来的，是平日累积 而成，由事实表现出来。 为朋友保守秘密，尊重个人隐私，就是尊重他人。 10 walmarts strategy 1.strategy : entry mode walmart expands their international operations thr

7、ough operating income from international operations grows rapidly entry mode no. of storescountries joint ventures619mexico, brazil acquisitions580 canada, germany, south korea, united kingdom owned subsidiaries52puerto rico greenfield operations37argentina, china total (in 2003)1288 in billion $ 11

8、 walmarts strategy 2. strategy : price every-day-low-price (edlp) always price some offers lower than other local retailers low costs 3. strategy : customer orientation ten-foot rule greeter loyalty cards 4. strategy : supplier relation efficient supply chain and vendor relations 12 walmarts strateg

9、y strengths opportunities weaknesses threats powerful global brand name inexpensive offers to customers high degree of customer orientation very strong in the us market strong vendor relations efficient supply chain huge bargaining power big financial resources globalisation and liberalisation open

10、up new markets and give an opportunity to expand k-mart and target take local market share in the us no big growth potential in the home market (us) rely on their suppliers (product assortment) enter new markets without considering adaptation 13 why did walmart fail in germany? influencing factors w

11、hy walmart failed in germany macroenvironmental factors microenvironmental factors internal factors why did walmart fail in germany ? “wal-mart germany: a problem of size“, (deutsche lebensmittelzeitung, 2002) 14 the macroenvironment in germany political sociocultural economic german shopping habits

12、 different working culture germany - the biggest retail market in europe tough phase for german economy affected the retail industry high labour costs high real estate prices 15 limited choice of entry modes german governments tax reform limitation of the store opening hours restraints of competitio

13、n to protect small and medium-sized retailers requirement of disclosing basic financial information strong protection of german workers from german unions the microenvironment in germany highly competitive, fully saturated retail market different operating system and store specifications of the acqu

14、ired chains conflict re. distribution system with suppliers vendor relations 16 internal factors vendor relations inventory problems shortage of workers struggled with difficult labour relations inflexibility of operation management language skills of management 17 alternative responses to failure t

15、wo scenarios for future growth 1.scenario 1:stay in germany repositioning and rebranding adaptation differentiation and creation of new values “lean concept“ 2.scenario 2:withdrawal from the german market - entering new markets four step approach check learn adapt go! 18 stay in germany but adapt 1.

16、repositioning and rebranding walmart could not fulfill their perceived image (“every-day-low-price“ and high level of service) necessity to create a new brand name and image in the market 2.adaptation adapt working culture and service culture to german “needs“ eliminate activities that do not add va

17、lue to customers (e.g. greeters, packers, shopping assistance) and, by doing so, reduce costs comply with german legislation 19 stay in germany but differentiate 3. differentiation and creation of new values convince customers to shop at walmart rather than go to established competitors show innovat

18、ive concepts that competitors do not offer offer free home delivery service for elderly customers who shop in store offer online shopping service offer free shuttle bus service to get to the shop 20 stay in germany but focus 4. lean store concept focus on only one size for stores keep medium-sized s

19、tores sell stores that do not fit into the concept buy stores that complement concept in new regions unify layout of stores possibility to optimize supply chain (similar demand of goods in every store = similar orders) 21 withdraw from germany and enter new markets but check 1.check which market is

20、attractive + open to key strengths of the company where is the biggest match? matching points with a country (e.g.): - appreciation for service designed by walmart - similar working and business culture - supplier networks that match walmarts vendor strategy country attractiveness depends on (e.g.):

21、 - labour costs (in order to keep low prices) - market environment - number / size of competitors enough growth potential in the country - legal restrictions for entrygo for it but lower risk cooperation first? stay out and develop into more promising markets only go in, if you did enough research a

22、nd be very sure that you can adapt only go in, if you did enough research and be very sure that you can adapt country attractiveness go for it but lower risk cooperation first? go for it but lower risk cooperation first? only go in, if you did enough research and be very sure that you can adapt only

23、 go in, if you did enough research and be very sure that you can adapt walmart s compatibility with a country country attractiveness go for it but lower risk cooperation first? go for it ! stay out stay out stay out 22 withdraw from germany and enter new markets but learn 2.learn what is the new mar

24、ket environment (typical behaviours, likes/dislike of consumers)? market research on behavioural aspects send trend scouts to markets where market research is difficult what can we learn from competition? is the market already saturated? which position in the market could a company take? which scope

25、 of competitive advantage is possible at market entry? 23 withdraw from germany and enter new markets but adapt 3.adapt “as much as necessary, as little as possible“ develop advantageous resources locally allow the subsidiary to create its own strategy adaptation to. . culture of customers . organizational and working culture . supplier systems . distribution systems 24 withdraw from germany and enter new markets then go ! 4.go ! “think global, act local“ 25 recommendation withdrawal from ge