Cultural Disadvantages Of Walmart

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Sam Walton envisioned a company where the staff would play a key role to provide brilliant customer service while giving the workers excellent working conditions to achieve a level of efficiency that no one else has achieved in the industry. Each week, approximately 260 million customers visit more than 11,500 stores in 11 different nations. The retail giant is operational in 28 countries in both physical stores and e-commerce sites and proudly employs over 2.2 million associates worldwide. Many factors played a part in their need for global expansion and Germany was their destination because of its powerful economy, spending habits of consumers and attractive location in Europe. In December of the same year, Walmart took over the renowned…show more content…
When Walmart entered the German market, they hoped to do very good business in Germany, it being the world’s third largest economy. However, it did not go like Walmart had hoped, in fact, their business there was a huge loss. The main reason for that was the cultural difference between USA and Germany. The first problem was their choice of acquisition. The company they chose to acquire, Spar, was already a weak link and Walmart failed to create the brand equity through these stores. Their size and format were not homogeneous, which is one the USPs of Walmart and they were also not located in convenient places for their target market. Walmart says ‘Everyday low price’ but before they entered the market, they did not research to what extent the German retailers are offering reduced prices. German shoppers are known to be quite demanding and they are willing to go to different places if they can find lower prices so the whole concept of superstores was not welcomed by them. Also, the promise that Walmart made did not seem lucrative to the German market as they are already accustomed to very low prices by their local…show more content…
There were many big retail market industry, and Walmart was only able to capture 1.1% of the market. All of Walmart’s competitors were able to cut the price from the regular price, especially Aldi, which was their biggest rival. This reduced their value proposition of “everyday low pricing” to nothing but an empty promise. Thus given their market position and the presence of already popular and established competitors, the rate of survival had been low from the very beginning. Second, Walmart unable to understand consumer behavior and the spending habit of German shoppers. Retailer of German already offered the low price to their consumer but when Walmart comes they didn’t research what their rival offering price they were offering regular price. So that consumer of Germany didn’t find any special from Walmart market. Also meanwhile these customers were mainly driven by price, they were willing to even shop from different retailers in search of competitive lower prices, which reduce the effectiveness of superstore also Walmart as being a superstore itself they couldn’t stand

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