Media Markt's Exit from China
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Case Code: BSTR434 Case Length: 11 Pages Period: 2010-2013 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.300 Organization: Media Market Industry: Electronic Retailer Countries: Germany, China Themes: International Business, Globalization |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
Media Markt was established in 1979 by Leopold Stiefel (Stiefel) and his partners Walter Gunz (Walter), Erich Kellerhals and Helga Kellerhals as an electronic store in Munich, Germany. At that time, electronic stores in Germany were small and sold a limited assortment of products. Media Markt was started with the idea of offering consumers "a broad selection of branded products at permanently low prices, professional customer advice, competent repair service and, moreover, every customer was entitled to return his purchase if he found a better offer with a competitor."
Media Markt stocked a wide range of products including televisions, refrigerators, and washing machines, photographic equipment, etc. The stores were located close to the city center, yet at locations where the consumers would not experience any parking related problems.
By 1987, ten stores were established across the country. Sensing the potential, Media Markt aspired to expand the stores further in Germany. To gain funds for expansion, Media Markt sold 54% of its stake to Kaufhof Holding AG in 1988. By then, it had 20 stores in Germany. In 1989, its first international store was opened in France.
In 1990, the Media Markt-Kaufhof was acquired by Saturn Hansa Handels GmbH (Saturn), a chain of retail electronic stores, and the Media-Saturn-Holding GmbH (Media-Saturn-Holding) came into existence. It was headquartered in Ingolstadt, Germany. Even after the acquisition, Media Markt and Saturn continued to function as independent units. There were customers who thought that both were separate and rival entities with different price polices, marketing policies, etc. The philosophy behind functioning as separate entities was “March separately, strike jointly”, taught and followed by Stiefel...
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