More Lessons for Wal-Mart
The growing pains of many businesses are highly documented by the media as they go from domestic to foreign markets. Because of the company’s enormous monetary value, which is frequently compared to Gross Domestic Products of entire nations, Wal-Mart’s missteps in many countries have been critically commented on by writers and journalists around the world. Cultural challenges have oftentimes been the hallmark of Wal-Mart’s experience around the world, as a recent Business Week article points out. Here are a few examples.
In Japan, there was cultural resistance to Wal-Mart’s discount model because Japanese consumers tend to see low prices as a sign of low-quality goods. Selling its products in bulk is also not cohesive with the Japanese lifestyle, where most people live in densely populated urban centers.
India’s retail industry is comprised of small businesses with only a small fraction owned by chain stores. Convincing Indian consumers to shop at wholesale hypermarkets like Wal-Mart will take some time while they find the framework to approach and accommodate the Indian lifestyle.
A picture from 2006 of a Wal-Mart in South Korea. Chung Sung-Jun/Getty Images
“While [Wal-Mart's] strategy worked in North America, the results were so bad in Germany and Korea that Walmart withdrew from those countries in 2006,” according to Business Week. Past experience bore costly results, and a New York Times article from 2006 details these failures.
Have you worked for a company that has a successful model for entering foreign and emerging markets? What do you think it takes?
Read the Business Week article here.
Charlene
