Essay on Walmart Failure in Germany

1675 Words 7 Pages
Many companies’ ambitions to position themselves (profitably) in foreign markets or to establish themselves as “global players” have been thwarted by their inability to fully understand and to adapt to the specific conditions of doing business in other countries, exposing their profound lack of intercultural competence and management skills.

This is exactly what happened to Wal-Mart Germany. To begin with, it appointed four
CEOs during its first four years of operation. The first was Rob Tiarks, a US citizen and a Wal-Mart, Inc. senior vice president who had previously supervised around 200 US
Supercenters from the company headquarters in Bentonville, Arkansas. Not only did he not speak any German. Due to his unwillingness to
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Although it voluntarily paid its staff 0.5 per cent on top of the general raise, to the company’s management complete surprise, ver.di retaliated by organizing walkouts at 30 stores throughout the country – resulting not only in lost sales but in bad publicity for “union-bashing” Wal-Mart.63 As will be discussed in more detail below, the ver.di–Wal-Mart controversy is escalating after the union sued the company for breaching Germany’s financial information disclosure regulations.
Neither "everyday low prices" nor "excellent service"
Traditionally, Wal-Mart has inflicted a full-scale price war on incumbents on every single market it has so far entered in order to credibly communicate its legendary “every day low price”-pledge to local consumers. While extremely successful almost everywhere else, this strategy badly backfired in Germany – largely due to the afore-mentioned ignorance, lack of experience, and hubris of Wal-Mart Germany’s original top management team led by Rob Tiarks:
• To his complete surprise, all affected German competitors, first and foremost
Aldi – which throughout its existence successfully defended its position as Germany’s undisputed cost and price leader – Lidl, Rewe and Edeka, not only matched all of Wal-Mart’s price cuts. Even worse, the results of several independent surveys, commissioned by

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