Wal-Mart's Failure in Germany

Paper Summary:

The paper relates that Wal-Mart failed to realize that the approach German consumers take when it comes to buying on price would not support a "Big Box" retailer. The paper explains the issue of not being able to create as efficient of a virtual network of suppliers as had been the case in the U.S. and the high degree of regulation over grocery chains. Finally, the paper dwells on the lack of integration between the companies purchased that made the greatest strength of Wal-Mart in the U.S. a major weakness in Germany.

Outline:
Executive Summary
The Wrong Value Proposition in the Wrong Market
Wal-Mart Strays Away from Key Organizational Resources
Purchasing Process Differences Not Taken Into Account
Mergers Gone Wrong
Summary

From the Paper:

"At its most fundamental level, Wal-Mart failed to define a unique value proposition that would resonate with German customers. Automatically reverting to the LPED value proposition, assuming that German customers paid high prices and had higher incomes than most Europeans, proved false. The biggest disconnect was that German shoppers liked to price shop throughout their neighborhood stores, not choosing to visit large shopping locations to search for their products and groceries. This was compounded by a common concern throughout many of the European Union (EU) countries, specifically the protection of the entire agricultural and food retailing supply chains."

Sample of Sources Used:

• "Business: Heading for the exit; Retailing" The Economist 5 Aug. 2006: 54.ABI/INFORM Global. ProQuest. 13 Apr. 2008 www.proquest.com

More papers on Wal-Mart's Failure in Germany:

• Case Study # 110284 : "Wal-Mart's Failure in Germany"
• Case Study # 148452 : "A History of Walmart's Globalization Strategy: Strategic Wins in China, Major Struggles in Germany"
• Analytical Essay # 149789 : "Wal-Mart's Strategic Challenges"

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