Wal-Mart in Germany Essay

1321 WordsJun 14, 20146 Pages
2) Lack of sensitivity and understanding of language barriers, local traditions, consumer behavior, merchandising, and employment practices irreversibly damaged Wal-Mart’s image in Germany. The main problem why Wal-Mart failed on Germany is that the US transport its culture in managing Wal-Mart as it is to Germany without take into consideration that the culture of Germans is different also the top management refused to even compared to its US customers, and the top management failed to listen to the feedback from its employees. The main challenge that faced Wal-Mart in Germany was a lack of language and culture bridging skills, failure to accomplish this task satisfactorily, and the results were de-motivation and negatively impact the merged companies competitiveness, profits and shareholder value. The main two factors that contributed to the Wal-Mart’s unsuccessful efforts in Germany are: 1. Specific difference in German consumer behavior and culture in comparison with the US consumers. 2. Inefficient top management which ignored the relevance of local culture. For the first factor: ignoring the local culture, local buying habits and hiring an American boss on Germans operations were the biggest mistake of Wal-Mart. In America the stores open approximately 24/24 per week they spend (Americans) a lot of time on shopping instead Germans stores close by 5 PM on weekdays and no shopping on Sundays. This shows that Germans customers don’t have the habit of spending lots of time in a store. Germans like to see the advertised discount products upfront without having to ask the store assistant. But Wal-Mart chose to use its US style merchandise display strategy which is opposite to what is mentioned before. Wal-Mart stocked its store with clothes, hardware electronics and other non-food products; as a result more than 50% of the revenue was from non-food products.

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