CROSS CULTURAL ISSUES WALMART IN SOUTH KOREA
Wal-Marts venture into South Korea is yet another example of a company attempting to duplicate its strategies and business model unsuccessfully. Wal-Mart didn’t consider how the vast differences in culture could affect their survival and ultimately let their complacency, conservatism and conceit get in the way. Their continued losses forced them to withdraw their investment after failing to adapt to the environment, the culture and customer needs. Wal-Mart should have adjusted their leadership style to be able to transcend context as well as engage in cultural sensitivity by localising their business to suit consumer preferences. More knowledge of the environment and competition could have provided Wal-Mart with a greater understanding of the culture and their different needs, and engaging in more thorough strategic planning could have seen this detrimental venture be a great opportunity for the company. Wal-Mart failed to take into account the different customer preferences attributed to the vast difference in cultures and stuck to western marketing strategies that focused on dry goods, electronics and clothing, rather than food and beverages which is what draws locals to these hypermarkets (Sang Hun 2006). Wal-Mart believed that their way of doing business was the best way, even though there were major differences in the US and South Korean market, and therefore were blinded by their ethnocentrism. In order to be successful they needed to adapt their business model to suit the South Korean market; however they were subject to tunnel vision, and didn’t take into account many necessary external factors and this proved costly. Wal-Mart should have engaged in localising, which includes modification of the subsidiary’s name, management style etc. in order to suit the local tastes (Derskey & Christopher 2008). As they did not attempt this, they were unable to establish what South Korean consumers wanted. Wal-Mart...
References: Sang Hun, C. (2006), Wal-Mart Selling Stores and Leaving South Korea, The New York Times, date accessed 25/4/2010
Hofstede, G. (2009), Geert Hofstede Cultural Dimensions, Itim International, Date accessed: 1/5/2010
Christopher, E., Deresky, H. (2008), International Management: Managing Across Borders, Pearson Education, 1st edn., Frenchs Forest NSW
Please join StudyMode to read the full document