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Caso Wal Mart In Germany

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Caso Wal Mart In Germany
ICMR Case Collection
ICFAI Center for Management Research

Wal-Mart 's German Misadventure
BSTR082

This case was written by K. Subhadra, under the direction of Sanjib Dutta, ICFAI Center for Management
Research (ICMR). It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.

Erez Almogi,
Blanchard Israel LTD.
The Ken Blanchard Companies.
Israel.
Licensed to print 60 copies.
Transaction ID.: 53M49106SD529992P, March 17th 2008.
License valid upto June 17th 2008.

 2004, ICFAI Center for Management Research. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means- electronic or mechanical, without permission.
To order copies, call +91-40-2343-0462/63 or write to ICFAI Center for Management Research, Plot # 49,
Nagarjuna Hills, Hyderabad 500 082, India or email icmr@icfai.org. Website: www.icmrindia.org

BSTR/082

Wal-Mart’s German Misadventure
“I don 't think that Wal-Mart did their homework as well as they should have. Germany is Europe 's most price-sensitive market. Wal-Mart underestimated the competition, the culture, the legislative environment.” - Steve Gotham, Retail Analyst – Verdict Retail Consulting, in October 20021
“We screwed up in Germany. Our biggest mistake was putting our name up before we had the service and low prices. People were disappointed.”
- John Menzer, Head – Wal-Mart International, in December 20012

GERMAN BLUES
For the world’s largest retailing company – Wal-Mart Inc (Wal-Mart), the German market was proving difficult to crack. By 2003, even after 5 years of entering Germany, Wal-Mart was making losses. Though Wal-Mart did not reveal these figures, analysts estimated losses of around $200300 million per annum in Germany, over the five-year period.
According to analysts, the main reason for


References: 1. Zellener, Wendy, Wal-Mart 's Newest Accent is German, BusinessWeek, December 18, 1997. 2. Troy, Mike, Wal-Mart Germany 's New President Faces Culture, Customer Challenges, Discount Store News, February 9, 1998. 3. Schmid, John, In Europe, Wal-Mart Pursues a Big Dream, International Herald Tribune, October 2, 1998. 4. Wal-Mart Acquires Interspar Hypermarkets, www.prnewswire.com, December 9, 1998. 5. Troy, Mike, Wal-Mart Germany Beefs Up, Discount Store News, January 4, 1999. 6. Kahn, Jeremy, Wal-Mart Goes Shopping in Europe, Fortune, June 7, 1999. 7. Dawley, Heidi, Watch out Europe: Here Comes Wal-Mart, BusinessWeek, June 28, 1999. 8. Wal-Mart in Germany is Not Doing Well, www.union-network.org, March 7, 2000. 9. Wal-Mart Makes Bigger than Expected Losses in Germany, www.union-network.org, March 10, 2000. 10. The Wal-Mart Effect, Business Europe, May 17, 2000. 11. Wal-Mart 's Low Prices too Low for Germany 's Retail Regulators, www.enquirer.com, September 9, 2000. 12. Germany: Stop Bullying Wal-Mart, BusinessWeek, September 25, 2000. 13. Marino David, Wal-Mart Steps up German Invasion, www.fool.com, March 26, 2001. 14. Wal-Mart Continues to Lose Money in Germany - Responds through Escalating Price War, www.union-network.org, March 29, 2001. 15. Operations Evolve to Offset Doldrums in Deutschland, DSN Retailing Today, June 5, 2001. 16. Zellner, Wendy; Schmidt Katharine A; Ihlwan, Moon; Dawley Heidi, How Well Does WalMart Travel? BusinessWeek, September 3, 2001. 17. Rubin, Daniel, Grumpy German Shoppers Distrust the Wal-Mart Style, www.gaccwa.org, September 30, 2001. 18. The first 'real ' Wal-Mart is a flop? www.union-network.org, February 12, 2002. 19. Pommereau, Isabelle de, Wal-Mart lesson: Smiling service won 't win Germans, www.csmonitor.com, October 17, 2002.
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