WAL-MART'S STRATEGIES IN GERMANY *

Abstract:

The case focuses on the retailing giant Wal-Mart and its experience in Germany. The case explains in detail the reasons for Wal-Mart's decision to go global in the early 1990s, and its decision to enter the European market through Germany – the most difficult market in Europe. The case discusses the problems faced by the company in Germany due to its lack of understanding of the German retailing and regulatory environment. The case discusses in detail the various problems faced by Wal-Mart in Germany– entry strategy problems, problems in the operational environment, regulatory problems and cultural problems.

Issues: » Understand the nature and structure of German retailing industry including its size, scope, spread and unique characteristics. » Highlight the implications of entry through acquisition in an overseas market.

Questions for Discussion:

1. Wal-Mart started its global operations in the early 1990s when it opened its first international store in Mexico. Analyze the reasons for Wal-Mart's decision to go global.
2. When Wal-Mart announced that it would be entering the German markets, analysts were surprised. Usually, the cultural affinity between the US and the UK led American companies to target the UK first, before launching onto the European continent. Do you think Wal-Mart's decision to enter the German market was correct? Justify your stand.
3. Even after fives years of doing business in Germany, Wal-Mart had failed to make an impact on the German market and had been incurring losses year after year. Analyze the reasons for Wal-Mart's problems in the German market. Do you think the company would be able to improve its performance in Germany?

Key words:
Retailing giant, Wal-Mart, Germany, global, 1990, European, Germany, retailing, regulatory environment, rational environment, regulatory problems, cultural problems

*Note : This case is a simplified version of a longer case study, and is intended for learners for whom English is a foreign language. The longer version of this case study (BSTR082) is available at: http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy2/BSTR082.htm