1. Compare and contrast Wal-Mart’s efforts in Germany and South Korea with its operation in China?
After more than a decade, Wal-Mart left Germany failing to become the popular “Everyday Low Prices” all in one shopping spot as it is in the U.S. Walmart has also failed abroad in other countries such as South Korea. There were only 16 stores in South Korea and was eventually sold out to a Korean discount chain, Shinsegae, for $882 million dollars. Reasons why Wal-Mart fails in these countries occur from the lack of strategic plan, other than the duplication of the U.S. strategy. The strategy of low prices, keen inventory control, and a huge selection of goods was not a success in German and Korean markets. The culture was also a factor that Wal-Mart needed to consider and alter their strategy before entering Germany and South Korea. For example, in Germany the company had American managers that like in the U.S. offer to bag groceries while Germans like to bag their own groceries. Also, the customer service was translated into being overly friendly with customers where smiling and greeting is not a norm in Germany. In addition, Wal-Mart never established relations with labor unions. In Korea, the racks were taller than that of competitors which raised a problem for people having to use ladders to reach items and the infrastructure also turned customers off with ceilings that showed pipes while their competitor E-Mart had decorated ceilings. Having failed to the tastes of South Korean and German consumers, the business philosophy also failed even though it has always worked so well in America. There was inability to compete with already established discounters and Wal-Mart was not aggressive enough in expanding their networks in the countries. In Germany the smaller discount stores Aldi and Lidl dominate the grocery business with low prices and better quality food than Walmart. Their strategy to draw customers back is to have promotions that discount all their goods drastically. Germany then switched over to German managers who then made a point of selling higher quality food than before with organic mean and product. Changes were too late to me made to keep Wal-Mart in Germany but this doesn’t mean they don’t succeed in other countries abroad. China has a market where the U.S. strategy can work well. According to Wal-Mart China, they believe in local sourcing, have established partnerships with 20,000 suppliers. Before Wal-Mart even entered China, teams conducted consumer habits and needs in order to address culture norm behavior so they could adopt a business strategy that would be a success in China. 2. What lessons were learned from those two efforts?
Multiple lessons were learned from the efforts of expanding into Germany and South Korea. Millions of dollars were lost and the expansion in those countries and should be used as a guide of how not to enter a new country. Many Koreans never have even heard of Walmart since there were only 16 stores. That means in the city Seoul with a population of 10 million, there was only one store. Wal-Mart also pushed Western marketing strategies that put off South Korean consumers. Wal-Mart will need to analyze how aggressively they enter a new market, and how to change Wal-Mart’s corporate culture on non-Americans. Another tool they should have used was to evaluate market wants and needs of foreigners, without knowing the South Korean consumer needs and habits; the ‘Every Day Low Price’ strategy failed with consumers and made it hard to compete with Korean discounters. Also Korea wasn’t the best environment to carry out Wal-Mart’s focus on growth strategy.
In Germany, Wal-Mart quit making their employees be ‘over the top friendly’ because smiling was interpreted as abnormal. Local management is what was needed from the beginning and issues of having cultural differences would not have occurred. It was said in the New York Times, that executives had little feel for what German consumers wanted. “They tried to sell packaged meat when Germans like to buy meat from the butcher.” Little things are what made the organization fail in Germany that could have been avoided if management knew local customer insights. Lastly, having a targeted market like it does in the U.S. that would focus on either upper class or lower income consumers depending on how Wal-Mart placed against their competitors in the retail industry in Germany and Korea. 3. What are the reasons for success in China?
The first important reason for success of Wal-Mart in China is the Chinese factories that support the low-cost strategy. Since China is so big they had to target key cities and specific regions to become big enough nationwide that enables them to be able to control their supply chain. China Wal-Mart localizes their store as well to fit the needs of consumers. They can do this by adapting a strategy that management isn’t dominated by headquarters and instead having managers make more decisions. For example, the vegetable sections resemble a Chinese feel street supermarket that locals are comfortable with rather than box stores in Western stores. Wal-Mart also had to revamp their slogan since they are not the cheapest store, the revised slogan tells consumers that they will save money and live a healthier lifestyle if they shop at Wal-Mart. Going into China with market knowledge and revised business strategy is what led Wal-Mart to succeed and continue growing. Adapting to customer wants and needs is what was needed for Germany and South Korea Wal-Mart as well as being able to compete with local discount stores.

Works Cited
BARBARO, MARK LANDLER and MICHAEL. The New York Times. 2 August 2006. 19 March 2013. < http://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart.html?pagewanted=all&_r=1&>.
Landler, Mark. Wal-Mart gives up Germany - Business - International Herald Tribune. 28 July 2006. http://www.nytimes.com/2006/07/28/business/worldbusiness/28iht-walmart.2325266.html. 19 March 2013.
Sang-Hun, Choe. Wal-Mart quitting South Korea. 2006. http://www.nytimes.com/2006/05/22/business/worldbusiness/22iht-won.html. 2013.