walmart
9-704-027
REV: J U L Y 2 0 , 2 0 0 4
G U N N A R TRUMBULL
LOUISA GAY
Wal-Mart in Europe
"Never resist change.. . We have to be able to place a store or club side-by-side with the competition and beat them every time. "
-David Glass, Director and Chairman of the Board, Wal-Mart1
"In Germany, we know how retail is spelled."
- Holger Wenzel, Director, German Retail Federation
Introduction
"What are the 10 worst things we can do to fail?"2 This was how Lee Scott, CEO of Wal-Mart, summarized Wal-Mart's approach to working in Germany. Wal-Mart had entered the German retail market in 1997, with the acquisition of the failing German retail chain Wertkauf, and had quickly encountered problems. Wal-Mart's EveryDay Low Price (EDLP) guarantee, inventory control, and efficient distribution strategy, so strong in the United States, had each been a source of headaches.
Wal-Mart went through protracted struggles with labor unions, with suppliers, and with local zoning boards. It also weathered a major pricing scandal, had been fined for failing to return used bottles to producers, and, in a case that was on appeal at Germany's constitutional court, faced a 330,000 euro fine for failing to release financial data for Wal-Mart Germany.
This was not the first time that Wal-Mart International had run into problems with overseas expansion. It had quickly pulled out of Indonesia after a disappointing 'test project' in the early
1990s. Yet in most cases, time had worked in its favor. In Mexico, where it was now recognized as the country's leading retailer, Wal-Mart had needed five years to post profits. In the United Kingdom, which Wal-Mart had entered by acquiring ASDA in 1999, it was already enjoying double-digit sales growth. Could this success be duplicated in Germany?
Wal-Mart: Brief Background
Founded by Sam Walton in 1962 in Bentonville, Arkansas, Wal-Mart stores offered customers a broad range of goods, including lawn and garden, jewelry,
REV: J U L Y 2 0 , 2 0 0 4
G U N N A R TRUMBULL
LOUISA GAY
Wal-Mart in Europe
"Never resist change.. . We have to be able to place a store or club side-by-side with the competition and beat them every time. "
-David Glass, Director and Chairman of the Board, Wal-Mart1
"In Germany, we know how retail is spelled."
- Holger Wenzel, Director, German Retail Federation
Introduction
"What are the 10 worst things we can do to fail?"2 This was how Lee Scott, CEO of Wal-Mart, summarized Wal-Mart's approach to working in Germany. Wal-Mart had entered the German retail market in 1997, with the acquisition of the failing German retail chain Wertkauf, and had quickly encountered problems. Wal-Mart's EveryDay Low Price (EDLP) guarantee, inventory control, and efficient distribution strategy, so strong in the United States, had each been a source of headaches.
Wal-Mart went through protracted struggles with labor unions, with suppliers, and with local zoning boards. It also weathered a major pricing scandal, had been fined for failing to return used bottles to producers, and, in a case that was on appeal at Germany's constitutional court, faced a 330,000 euro fine for failing to release financial data for Wal-Mart Germany.
This was not the first time that Wal-Mart International had run into problems with overseas expansion. It had quickly pulled out of Indonesia after a disappointing 'test project' in the early
1990s. Yet in most cases, time had worked in its favor. In Mexico, where it was now recognized as the country's leading retailer, Wal-Mart had needed five years to post profits. In the United Kingdom, which Wal-Mart had entered by acquiring ASDA in 1999, it was already enjoying double-digit sales growth. Could this success be duplicated in Germany?
Wal-Mart: Brief Background
Founded by Sam Walton in 1962 in Bentonville, Arkansas, Wal-Mart stores offered customers a broad range of goods, including lawn and garden, jewelry,