2. Wall-Mart Failure In JapanWall-Mart Failure In Japan
Reasons:Reasons:
1.1. Mass firing:Mass firing:
It fired 25 percent of headquarters staff,It fired 25 percent of headquarters staff,
including 1,500 employees and managers,including 1,500 employees and managers,
when it took over Seiyu. This is not a normalwhen it took over Seiyu. This is not a normal
occurrences in Japan.occurrences in Japan.
2.2. American values:American values:
Japanese believe Wal-Mart is trying to forceJapanese believe Wal-Mart is trying to force
American values on them, such as mandatingAmerican values on them, such as mandating
that stores stay open 24 hours per day.that stores stay open 24 hours per day.
3. Contd.Contd.
3.3. Low-price model:Low-price model:
Japanese consumers who want high-qualityJapanese consumers who want high-quality
goods are willing to pay high prices for them.goods are willing to pay high prices for them.
Thus, Wal-Mart’s low-price model may not beThus, Wal-Mart’s low-price model may not be
the best fit for the Japanese market.the best fit for the Japanese market.
4. Wall- Mart Failure In KoreaWall- Mart Failure In Korea
Reasons:Reasons:
1.1. Timing and the lTiming and the locationocation selection:selection:
Korean consumers’ prefer shopping inKorean consumers’ prefer shopping in storesstores
with close proximity. Local rivalswith close proximity. Local rivals hadhad managedmanaged
to build stores in the early 1990sto build stores in the early 1990s thatthat hadhad
much higher store traffic compared to Wal-much higher store traffic compared to Wal-
MartMart..
2.2. Mismatched merchandising, assortmentMismatched merchandising, assortment
and marketing:and marketing:
It missed local needs that contributedIt missed local needs that contributed
to Wal-Mart’s failure in Korea.to Wal-Mart’s failure in Korea.
5. Contd.Contd.
3.3. Effective channel mix organization:Effective channel mix organization:
Wal-Mart failed to build a strong alliance withWal-Mart failed to build a strong alliance with
local suppliers.local suppliers.
Failed to control allFailed to control all logisticlogistic phases, fromphases, from
sourcing to deliverysourcing to delivery, which dampened, which dampened Wal-Wal-
MartMart’s’s price competitiveness, whichprice competitiveness, which was itswas its
core competitive advantage in the US market.core competitive advantage in the US market.
6. Wall- Mart Failure In GermanyWall- Mart Failure In Germany
Reasons: Ignorance of competitive GermanReasons: Ignorance of competitive German
retail market.retail market.
1.1. Flawed entry-by-acquisition strategyFlawed entry-by-acquisition strategy
2.2. Management by “hubris and clash of cultures”Management by “hubris and clash of cultures”
3.3. Neither “everyday low prices” nor “excellentNeither “everyday low prices” nor “excellent
service”service”
4.4. Repeated Infringements of German Laws andRepeated Infringements of German Laws and
Regulations.Regulations.
7. Wall-Mart Problems In BrazilWall-Mart Problems In Brazil
Failure to understand the needs of the localFailure to understand the needs of the local
markets:markets:
1.1. Encountered operational problemsEncountered operational problems
2.2. Replicating the basic store format prevalent inReplicating the basic store format prevalent in
the US in Brazil and its failure to understand thethe US in Brazil and its failure to understand the
needs of the local markets.needs of the local markets.
3.3. Due to adverse economic conditions in Brazil.Due to adverse economic conditions in Brazil.
Solution:Solution: Wal-Mart planned and implementedWal-Mart planned and implemented
new strategies that included acquisitions, newnew strategies that included acquisitions, new
store formats, bringing in experienced storestore formats, bringing in experienced store
personnel, etc.personnel, etc.
8. Wall-Mart Problems In ChinaWall-Mart Problems In China
Reasons:Reasons:
1.1. China's distribution sector pose challenges forChina's distribution sector pose challenges for
Wal-Mart and its suppliers.Wal-Mart and its suppliers.
2.2. Businesses in China still depend heavily on aBusinesses in China still depend heavily on a
hard-copy paper flow of documentation,hard-copy paper flow of documentation,
which adds cost, requires excess manpower,which adds cost, requires excess manpower,
and creates opportunities for human errorand creates opportunities for human error
9. Contd.Contd.
Solution:Solution:
Overcoming these challenges through innovativeOvercoming these challenges through innovative
and flexible supply chain management andand flexible supply chain management and
logistics strategies are vital to Wal-Mart'slogistics strategies are vital to Wal-Mart's
success in China.success in China.
10. Contd.Contd.
Solution:Solution:
Overcoming these challenges through innovativeOvercoming these challenges through innovative
and flexible supply chain management andand flexible supply chain management and
logistics strategies are vital to Wal-Mart'slogistics strategies are vital to Wal-Mart's
success in China.success in China.
