Introduction

In 1997, Wal-Mart Inc had acquired 21 units of a well known chain of stores in Germany named Wertkauf. One year later, another acquisition deal involving 74 units of the market chain Interspar was negotiated between Wal-Mart Inc and Spar Handels AG. (Arndt, Knorr, 2003) The negotiations were a success, and through the acquisitions Wal-Mart had quickly evolved into one of the biggest operators in the German hypermarket industry. Though the first acquisition was considered to be a wise investment because of Wertkauf’s previous success, Interspar was not looked at the same way. The Interspar hypermarket chain was in serious need of financial reformation as the business itself was unprofitable. Wal-Mart did manage to improve the line of former Interspar hypermarkets; however other factors played a role in the failure of our expansion. This report will disclose non-financial aspects of Wal-Mart’s failure to succeed in Germany.

Problem Statement

Wal-Mart needs to adjust its business plan in a way that facilitates cultural understanding and adheres to the laws and regulations of Germany.

Measurable Objective and Long-term Goal

With a very small market share at 1.1%, (Sundarji, 2012) turnover of 2.9 billion Euros and further losses of 1 billion Euros, (Arndt, 2003) a long-term goal would be to make the business profitable, increase employee satisfaction and. An increase of the market share, elimination of debt, reversal of employee cuts and an increase in consumer attendance could all be measures of a successful turnaround.

Analysis

Wal-Mart took a very aggressive and arrogant approach into Germany. The assumption was that the market would react positively to their approach, much like it did in America. However, the cultural difference along with inadequate evaluation of the existing market proved to be a major problem. Though both the US