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Why did Wal-Mart fail in Germany ?

Why did Wal-Mart fail in Germany ?. TOP 15 LARGEST RETAILERS in the WORLD. Type : Discount Department store/ Public Founded : Sam Walton (1918-1992), Founder Key People : H.Lee Scott, CEO S. Robson Walton, Chairman Industry : Retail

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Why did Wal-Mart fail in Germany ?

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  1. Why did Wal-Mart fail in Germany ?

  2. TOP 15 LARGEST RETAILERS in the WORLD

  3. Type :Discount Department store/ Public Founded : Sam Walton (1918-1992), Founder Key People :H.Lee Scott, CEO S. Robson Walton, Chairman Industry : Retail Products : Discount stores, Grocery stores, Hypermarkets Revenue :315.654 billion USD (2006) Net Income :11.231 billion USD (2006) Employee :1.8 Million (2006)

  4. GERMANY TOP 15 RETAILERS

  5. Retail Competition Manufacturers End user Retailer Act • Small • Immobile • Uniformed

  6. Retailer’s Competitive Advantages • Lower Prices (Everyday low prices) • More Favorable (Near or easily accessible) • Better Product Selection and Category • Management • Superior Customer Service

  7. Impediments of Retailer • Legal Barrier (Law and some forms of behavioral Regulation) • Stringent Planning Regimes and Zoning Regulations) • Restrictive Shopping Hour Regulations • Antitrust and (un)fair Trading Regulations that may restrict price competition or prohibit some forms of advertising and sales promotion)

  8. Internationalization in Retailing • Status Quo - A Handful of Players of International Retailer such as Carrefour and Aldi - Most of these companies are based in Western Europe rather than in the US or North America • Prevailing Strategies such as organic growth, joint ventures, Strategic alliances, Franchising, Mergers and Acquisitions 3. Impediments to Retail Internationalization - Mixed bag, Barrier to entry, Aggressive, Reaction by the incumbent Oligopoly

  9. The German Retail Market • General Background Information • - The biggest national retail market in the old World • Oligopolistic Market Structure- The Key Player • Ultra-Low Profitability – Probably the least profitable • all over the industrialized world • Retail –Specific Legislation such as Planning Law • and Zoning Regulation

  10. Store Opening Hours in Select EU Countries Source : KPMG

  11. Wal-Mart’s Strategy in Germany – Why It Failed • Flawed entry-by-acquisition Strategy • Management by “hubris and Clash of Cultures” • Neither “ Everyday low prices” nor” Excellent Service” • Repeated Infringement of German Laws and Regulation

  12. Thank you for your attention

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