...Cross Cultural Perspectives ETH /316 l Abstract In this essay I will identify a corporation located in the United States of America that has faced ethical issues operating internationally. I will also include in some detail, the results of my research. I will research a company that all Americans know and love- and over the last few years… this company has become one of the most popular retailers in the world- Wal-Mart. Yes, I know the retailer has been; reported on, complained about, sued, protested, and argued in city and town halls across America for decades. But one cannot question the success of the retail giant, ever since opening its first international store in Mexico City, Mexico some twenty-four years ago, Wal-Mart has taken over the global market (V. Govindarajan, 2002). I will start with identifying the ethical perspectives of Wal-Mart, then I will then show the results of the comparison between the different lands’ culture. I will then describe a viable solution for any issues that may occur culturally with the transition of Wal-Mart going global. Today's economy is far more global as it used to be… In the 1960’s for example, the United States of America did not have any sibilance of a relationship of any kind with nations like The People’s Republic of China, and The Soviet Union. In fact, most of the governments that are now superpowers were either developing counties, or involved in an arms race to be the most dangerous nation in the...
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...Cross-Cultural Perspectives Wayne Hawley ETH/316 August 18th, 2014 Tana Romero Cross-Cultural Perspectives Wal-Mart is a global organization with a multinational presence. Wal-Mart started in the United States of America and after obtaining huge success in the U.S., they went global with their brand of marketing and selling products at a lower price than their competitors, in order to help lower income families. Wal-Mart is considered the world’s largest retailer, but this title has not come without issues. Wal-Mart Cultural issues Wal-Mart is a massive retail store chain in the United States, this goes without saying. I would find it hard to believe you could find a single person in the United States that has not heard of or been to a Wal-Mart. Because of their great success in the U.S., it only makes sense they would travel abroad and attempt to bring their services to other countries. Wal-Mart devised and produced a 36 page, global policy for ethics, which states the following: According to "Walmart Statement of Ethics" (n.d.), “Each business organization Walmart operates is expected to have a complete set of policies providing guidance to associates for whatever country they are working in”. “Walmart also publishes several “global policies,” which are designed to give associates a set of rules that are the same for all locations.” “This Statement of Ethics is an example of a global policy.” “If any part of this Statement of Ethics goes against local...
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...Case Study: Wal-Mart’s failure in Germany Wal-Mart Stores, Inc. is the largest retailer in the world, the world’s second-largest company and the nation’s largest nongovernmental employer. Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The Company’s mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam’s club segment includes the warehouse membership clubs in the United States. The Company’s subsidiary, McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States (“Wal-Mart International Operations”, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China Wal-Mart’s entry and operation in Germany Wal-Mart’s initial entry into German market was through the acquisitions...
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...Cross Cultural Perspectives M Viens ETH/316 November 24, 2014 Aubrey Weekes Cross Cultural Perspectives The Walmart Corporation is a large, major, and successful retailer in the United States. Walmart’s attempt at branching out in countries such as China, Mexico, Brazil, and Germany has failed. Globally Walmart is not performing well; they have had difficulties in these countries. Their global revenues, “grew by a mere 1% in 2013, and its revenue per square feet declined by 4.2%” (Team, 2014). The China market does not add much to Walmart’s profits, but it is important to Walmart in regards to enduring perspective. Mexico is a principle global site, but there are many problems there also. In Germany, Walmart failed basically because they thought they could implement American standards in the stores. Walmart is handling these issues, and solving them would be their main concern (Team, 2014). Walmart Culture Issues Hong Kong, Indonesia, and South Korea are failures for Walmart, mainly due to not adhering to the cultures of these countries, and abiding a code of ethics. A couple of obstacles are food and products were placed on shelves, not in line with the country, and stores were constructed a long distance from the cities making it difficult for people to reach them. Foreign people many of them walk to stores or take public transportation. American people will travel to buy food stocking up for a month or more. Buying in bulk is a major issue...
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...Analysis Section A1 – Group 12 Peter De Boeck Alejandra Duran Ilan Hadass June Tan Christian Zapf 1 1. Define Wal-Mart’s strategy Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. • Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. • High Volume: Industry analysts watch Wal-Mart’s growth of sales figure very closely. WalMart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). • Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, “Wal-Mart’s aims at creating a loyal customer base by lowering their cost of living through offering quality and other products...
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...reasons why Wal-Mart‟s business model failed in South Korea, such as Consumer preferences and culture, Location, and Marketing arrogance all contributed to what one economist referred to as a failure. But under these basic economic decisions were a host of basic cross-cultural mistakes that fuelled the company’s poor strategic planning. 1. Consumer preferences and culture Most individuals believe that Wal-Mart failed to understand South Korean’s consumer preferences. Wal-Mart had relied on its proven business model and its strategy in offering low prices for products. However, low prices alone were insufficient to make a successful business case in South Korea. South Koreans have different consumer preferences than Americans do; they are not necessarily interested in the same products. For instance, South Koreans like fresh vegetables and fresh food rather than dry products and the type of clothing that Wal-Mart sells. The South Korean culture is also very tied into its markets; they are one of the largest countries that are deeply involved in local markets. 2. Location Most Wal-Mart outlets in South Korea were placed outside instead of in the cities. South Koreans expect easy accessibility to shopping facilities within the larger cities without the need to travel. Also, South Korean consumers shop more frequently than most Americans do. They may not purchase many things at once, but they will usually get at least one item. Some individuals felt that Wal-Mart should have...
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...Analysis Section A1 – Group 12 Peter De Boeck Alejandra Duran Ilan Hadass June Tan Christian Zapf 1 1. Define Wal-Mart’s strategy Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. • Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. • High Volume: Industry analysts watch Wal-Mart’s growth of sales figure very closely. WalMart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). • Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, “Wal-Mart’s aims at creating a loyal customer base by lowering their cost of living through offering quality and other products...
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...Analysis Section A1 – Group 12 Peter De Boeck Alejandra Duran Ilan Hadass June Tan Christian Zapf 1 1. Define Wal-Mart’s strategy Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. • Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. • High Volume: Industry analysts watch Wal-Mart’s growth of sales figure very closely. WalMart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). • Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, “Wal-Mart’s aims at creating a loyal customer base by lowering their cost of living through offering quality and other products...
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...Differences in Culture Chapter Outline OPENING CASE: McDonald’s in India INTRODUCTION WHAT IS CULTURE? Values and Norms Culture, Society, and the Nation-State The Determinants of Culture SOCIAL STRUCTURE Individuals and Groups Social Stratification Country Focus: Breaking India’s Caste System RELIGIOUS AND ETHICAL SYSTEMS Christianity Islam Country Focus: Islamic Capitalism in Turkey Hinduism Buddhism Confucianism Management Focus: DMG-Shanghai LANGUAGE Spoken Language Unspoken Language EDUCATION CULTURE AND THE WORKPLACE CULTURAL CHANGE FOCUS ON MANAGERIAL IMPLICATIONS Cross-Cultural Literacy Culture and Competitive Advantage SUMMARY CRITICAL THINKING AND DISCUSSION QUESTIONS CLOSING CASE: Wal-Mart’s Foreign Expansion Learning Objectives 1. Know what is meant by the culture of a society. 2. Identify the forces that lead to differences in social culture. 4. Identify the business and economic implications of differences in culture. 5. Understand how differences in social culture influence values in the workplace. 6. Develop an appreciation for the economic and business implications of cultural change. Chapter Summary This chapter begins by introducing the concept of culture. The determinants of culture are identified, which include religion, political philosophy, economic philosophy, education...
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...chapter 10 the international context There never were, since the creation of the world, two cases exactly parallel. Philip Dormer Stanhope (1694–1773); English Secretary of State INTRODUCTION firms move out of their domestic market on to the Aswith differinglanguage, arenas.system, technologicalinternational stage, they aretofaced business The nations they expand to can vary with regard consumer behavior, legal infrastructure, business culture, educational system, labor relations, political ideology, distribution structures and fiscal regime, to name just a few. At face value, the plurality of the international context can seem daunting. Yet, the question is how important the international differences are for firms operating across borders. Do firms need to adapt to the international diversity encountered, or can they find ways of overcoming the constraints imposed by distinct national systems, structures and behaviors? This matter of understanding and dealing with international variety is one of the key topics for managers operating across borders. A second question with regard to the international context is that of international linkages – to what extent do events in one country have an impact on what happens in other countries? When a number of nations are tightly linked to one another in a particular area, this is referred to as a case of international integration. If, on the other hand, there are very weak links between developments in one country and developments...
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...INB400 – International Organization and Management Term paper Wal-Mart’s culturally and institutionally flawed entry into the German retail market Joakim Holsten Leren s105710 Julianne Øien s106222 Mirko Wichmann s145433 Lara-Caterina Buggert s145400 Eloise De Bont s145611 22 pages Table of Contents Introduction 2 Case presentation 2 The Wal-Mart concept 3 Institutional challenges [to be deleted] 4 Cultural challenges [to be deleted] 4 German market 5 Theoretical Background 5 The cultural perspective 6 The institutional perspective 9 Case Analysis 12 The cultural perspective 12 The institutional perspective 15 Recommendations 19 Cultural 19 Institutional 20 Limitations 22 Cultural 22 Institutional 22 Conclusion 23 References: 25 Introduction The purpose of this paper is to address and analyze the challenges Wal-Mart faced during its entrance into the German market in the late 1990s. We have analyzed this with the following problem in mind: “Which aspects, both cultural and institutional, led to Wal-Mart’s failure in Germany and what should they have done instead?” We will approach this problem by outlining theoretical frameworks for analyzing cultural and institutional aspects of a company. We will then employ said theories in order to analyze the case of Wal-Mart’s failure in Germany. Finally, we will come to a conclusion concerning what they should have done as they entered into the German market...
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...Understanding that there was not much differentiation of product in the retail industry, Wal-Mart founder Sam Walton aimed to achieve a competitive advantage by reducing costs at all levels, leading to lower prices for the consumer. Wal-Mart’s culture driven cost policy was and continues to be a valuable, inimitable and scarce resource that is embedded in the retailer’s routine activity. However, it is only through Wal-Mart’s technological innovations that the company is able to take full advantage of this unique resource. To be sure, Wal-Mart has “gained competitive advantages – despite the unattractive, high threat, low opportunity environments within which [it] operate[s]” (Barney, pg. 50). A closer look at the SWOT analysis, along with a rigorous breakdown of its internal value chain will help us understand how Wal-Mart, in only 40 years, has become the premier shop in its industry. Initially, Wal-Mart focused extensively on reducing costs, keeping wages and operating expenses down to bare minimums. Knowing these cost cutting efforts would follow Schumpeterian ideals and that competitors would eventually catch on, Wal-Mart strove for long-lived competitive advantages (Ricardian profits) and began to invest heavily in technology to help keep its costs below the industry average. To enhance operations, Wal-Mart developed “Retail Link” to provide its suppliers real-time computer access to point-of-sale data, helping to manage and coordinate the quantity and assortment of...
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...Activities of Value Chain in Wal-Mart Wal-Mart is one of the leading Fortune 500 companies, which is spread across the globe. It is perhaps the largest retail chain which deals with everything from food to consumer electronics. In terms of the revenue generated, it leads the fortune 500 companies like GE and Microsoft. Simply put, it has everything a homemaker can ever think of. Affordable price range coupled with aggressive online and market strategy has led to wide acceptance for Wal-Mart in towns and cities alike. Wal-Mart is probably the only largest fortune 500 corporations in the world, which directly services the common man. The major point is that all of these activities have to be in sync in order for the value chain to operate effectively. The support activities is not bound to any of the primary activities, but is supposed to serve them, the first step in analyze of intern resources is to identify how the company’s different activities makes the foundation for its competition strategy. Supportive Activities: 1. Firm Infrastructure: There are 2485 Wal-Mart stores all over the world. This includes 682 Supercentres, 457 Sam’s Clubs, 5 Wal-Mart Neighbourhood Markets and 1007 units of Wal-Mart International. Wal-Mart serves over 100 million customers weekly worldwide. There are 1035000 associates, and the company is America’s largest private employer. Wal-Mart is run from a national headquarter. The headquarter takes care of orders, and every local store has to report...
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...Define Wal-Mart’s strategy Traditionally, Wal-Mart has essentially had a low-cost, high volume strategy. The strategy aims at customer satisfaction through low prices and relatively good customer service. Here are the basic details. • Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details on cost advantage are set forth in Section 3 below. • High Volume: Industry analysts watch Wal-Mart’s growth of sales figure very closely. Wal-Mart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share (cf. Dell). • Customer Satisfaction: Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. In the words of Sam Walton, “Wal-Mart’s aims at creating a loyal customer base by lowering their cost of living through offering quality and other products at significantly lower prices, while surprising them on the convenience and service level side.” It’s...
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...Managing Oral Communication (Project Report) ‘A critique of issues and challenges for cross cultural communication of a recent Joint Venture’ Submitted To: Prof. V. Chandra Submitted By: Anuj Verma (14PGDM073) Harsimran Singh Sandhu (14PGDM082) Mohak Jain (14PGDM092) Pallak Joshi (14PGDM102) Shikha (14PGDM110) Tanya Kapoor (14PGDM121) Vrashank Sharma (14PGDM131) Dated: 21 August 2014 Table of Contents Serial No. Contents Page No. 1 2 3 4 5 6 Introduction Specifics of the Deal Critique Conclusion Exhibits References 1 1 3 7 8 10 ‘ Introduction Joint Ventures represent a combination of subsets of assets, contributed by two or more business entities for a specific business purpose and a limited duration. This can enable a firm to achieve market penetration into new areas over time, enter and develop new product markets, expand into new geographic areas and participate in new technology driven value activities (Sullivan, 2014). For the purpose of this project we decided to analyze the recently concluded Joint Venture between Walmart Inc. and Bharti Enterprises. Bharti Enterprises is an Indian Business conglomerate, which owns various businesses spanning across telecommunications, retail, financial services and manufacturing. It operates in 20 countries across Asia and Africa. Wal-Mart Stores Inc., branded as Walmart, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. It...
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