Wal-Mart failed in their investment in South Korea due to a failure to understand Korean consumer demand and culture. Specifically, Wal-Mart did not adjust its business model of low prices and American products to match Korean preferences for shopping locally, fresh products, and domestic goods. Additionally, Wal-Mart's strategy of everyday low prices did not resonate with Korean consumers who do not distinguish normal prices from discounts. This failure to adapt led to Wal-Mart exiting the Korean market in 2006 after nearly a decade of operations.

1. ‘‘everyday low price’’‘‘everyday low price’’
WAL-MART’S FAILURE IN SOUTH KOREAWAL-MART’S FAILURE IN SOUTH KOREA
Sandra Akoli
Irma Hyseni
Robert Antipas
Enock Johannes
Sandra Akoli
Irma Hyseni
Robert Antipas
Enock Johannes
Names of participantsNames of participants

2. Why did Wal-Mart fail in their investment
in South Korea?
Why did Wal-Mart fail in their investment
in South Korea?
IntroductionIntroduction

3. BackgroundBackground
•Largest department store in the world
•Time of entry 1997 and time of exit 2006
•Largest department store in the world
•Time of entry 1997 and time of exit 2006
Franco Gandolfi and pavel Stranch, 2009

4. The Major Cause of Wal-Mart’s FailureThe Major Cause of Wal-Mart’s Failure
•“Wal-Mart South Korea failed because
of failure to understand the demand
culture of the local consumers and
adjust its business model to the
prevailing domestic culture.”
•“Wal-Mart South Korea failed because
of failure to understand the demand
culture of the local consumers and
adjust its business model to the
prevailing domestic culture.”
•“Wal-Mart views their failure as simply South Koreans preferred
their own domestic shopping centers.”
•“Wal-Mart views their failure as simply South Koreans preferred
their own domestic shopping centers.”
AlthoughAlthough
Franco Gandolfi and pavel Stranch, 2009

5. Korean’s Demand CultureKorean’s Demand Culture
•Like shopping within the city.
•Like fresh products.
•Prefer domestic products.
•Like fancy displays.
•Do not distinguish between normal prices
and discounts.
•Like shopping within the city.
•Like fresh products.
•Prefer domestic products.
•Like fancy displays.
•Do not distinguish between normal prices
and discounts.
Franco Gandolfi and pavel Stranch, 2009

6. •Low price strategy.
•Like selling dry foods.
•Prefer selling American products.
•Warm friendly reception to customers.
•Low price strategy.
•Like selling dry foods.
•Prefer selling American products.
•Warm friendly reception to customers.
Wal-Mart’s Business CultureWal-Mart’s Business Culture
Franco Gandolfi and pavel Stranch, 2009

7. ilure to Understand South Korean Culture Ledlure to Understand South Korean Culture Led t
Misstep in Distribution
•Location
•South Korean culture is tied to markets
•They are visual oriented_ pleasing displays
Misstep in Distribution
•Location
•South Korean culture is tied to markets
•They are visual oriented_ pleasing displays
Misstep in Product Mix
•South Koreans have different consumer
preference than North Americans
Misstep in Product Mix
•South Koreans have different consumer
preference than North Americans
Franco Gandolfi and pavel Stranch, 2009

8. Promotion Strategy
•Wal-Mart’s promotion strategy may have been
successful in US but failed in south Korea because
different Cultures have different peculiar
characteristics.
Promotion Strategy
•Wal-Mart’s promotion strategy may have been
successful in US but failed in south Korea because
different Cultures have different peculiar
characteristics.
Pricing Strategy
•Wal-Mart’s reliance on low price strategy.
•South Koreans don’t distinguish between
normal prices and discounts.
Pricing Strategy
•Wal-Mart’s reliance on low price strategy.
•South Koreans don’t distinguish between
normal prices and discounts.
Franco Gandolfi and pavel Stranch, 2009

9. Discussion/RemarksDiscussion/Remarks
Wal-Mart should have got in depth study of south Korean demand culture.
They should have been able to adjust their business culture;
•Flexible
•Adaptable
Wal-mart failed to adjust its marketing approach to its consumers.
“Retailers need to understand their own core competencies and values,
as well as whether those values will resonate with consumers in various
cultures.”
“Transplanting retail concept means retaining its core feature while
skillfully focusing on local Consumers.”
Wal-Mart should have got in depth study of south Korean demand culture.
They should have been able to adjust their business culture;
•Flexible
•Adaptable
Wal-mart failed to adjust its marketing approach to its consumers.
“Retailers need to understand their own core competencies and values,
as well as whether those values will resonate with consumers in various
cultures.”
“Transplanting retail concept means retaining its core feature while
skillfully focusing on local Consumers.”
Franco Gandolfi and Pavel Stranch, 2009 and wwwacademia.edu

10. ConclusionConclusion
•Wal-Mart should have studied in depth the South Korean demand
culture. Consumer preference, desire and need.
•They should have joint ventures in order to survive and
thrive the market there (this is something that needs further research
to find out more how it is going to work).
•Wal-Mart should have studied in depth the South Korean demand
culture. Consumer preference, desire and need.
•They should have joint ventures in order to survive and
thrive the market there (this is something that needs further research
to find out more how it is going to work).
•Wal-mart should not have operated on low discount prices. Why?
•Relocation of its outlets to the cities.
•Wal-mart should not have operated on low discount prices. Why?
•Relocation of its outlets to the cities.

11. ReferenceReference
Gandolfi, Franco and Strach, Pavel (2009). “Retail Internationalization:
Gaining insights from the Wal-Mart Experience in South Korea,” Review of
International Comparative Management. Volume 10, Issue 1, March, pp 187-199
Gandolfi, Franco and Strach, Pavel (2009). “Retail Internationalization:
Gaining insights from the Wal-Mart Experience in South Korea,” Review of
International Comparative Management. Volume 10, Issue 1, March, pp 187-199
M.Naufal, A AL Masri, NA, Stafordshire Univedrsity, APU Asia Pacific University
of Technology and Innovation, Wal-Mart Failure in Gemany, japan, and South
Korea, then, TESCO Failure in Japan, and Success in south Korea,
wwwacademia.edu
M.Naufal, A AL Masri, NA, Stafordshire Univedrsity, APU Asia Pacific University
of Technology and Innovation, Wal-Mart Failure in Gemany, japan, and South
Korea, then, TESCO Failure in Japan, and Success in south Korea,
wwwacademia.edu

12. Thank you allThank you all