Intercultural Management Case Study Walmart

...

5. If one has a look at the establishment of Walmart on a global basis, one can find that Walmart has accomplished to set up its stores especially in these regions, that either were regionally close to the US (Such as Canada and Mexico) or that still lacked competition to Walmart (such as Latin America and the Asian region). Hence it was easier for Walmart to set foot in these regions. They could fulfill an unsaturated need of their customers, or make use of their cultural identity.

However in Germany, they faced strong competition and due to cultural and geographical differences, Walmart had high difficulties in achieving what they wanted. They should have started to explore the German culture and behavior deeply before installing their markets. They should have studied consumer behavior and then have adapted their ways of doing business to a more suitable way, in order to approach the German market.

Walmart’s mission, „saving money and live better“ is their number one goal, they want to introduce all over the world. With their motto, having the lowest price every day, they should have encountered approvement on the German market, with Germany being the number one country in discount markets.

However, facing strong competition in Metro and Aldi, Walmart could not cope with the low prices for high quality food. There was no room for building relationships with local famers on the same low price level, as already existing. Additionally, Aldi with ist specials deals every week, had a similar market approach motto, as Walmart.

As a consequence, the uniqueness of Walmart could not gain a foothold in Germany. Additionally, nothing seems to be as big as an the US. Geographical, Germany makes out only 3% of the US, hence streets are not as big, as in the US, cars do not have to be as big as in the US, and people seem not to need as much as the Americans. Everything being in the superlative does not fit with the German mentality. Hypermarkets do not fit with the German way of shopping. They prefer small boutiques, for each category a different store and not everything at one stop. If Walmart would have recognized this shopping behavior before, they could have divided its hyper stores into different divisions. Separating each section with clear lines, such as walls and doors, so the consumer gets the feeling of entering a new store, when stepping from the garden section into the furniture section. This way, the German customer does not get overwhelmed by too many things in just one place.

6. Besides, Walmart should have persuaded the German consumer of its low price strategy. Germans believe in their high quality products and are proud of German origin labels. If the American company Walmart wanted to step in and provide the Germans with low price objects, they should have found a way to convince them of their price performance. In addition to that, Germany, as being the number one country of discount products, Walmart faced difficulties in being the number one leader of low prices in every section.[5]

Hence they should focus on these sections which are not already represented in the German market. Low food prices for example were hard to accomplish, thus they should have focused on other products. As Germans are really keen on their health and biological, environmental treating of their nutrition, Walmart could have started a food store with high quality, environmental friendly food, selling for a higher price, but still affordable for the main stream.

Even though this would not quite have worked hand in hand with their global strategy of having the lowest price anywhere anytime, it would still have risen their turnover in German markets. This would have been one part of their global strategy, they should have adapted to the German market.

The right mix between national responsiveness and a global strategy is not easy to develop. Walmart did succeed in various other countries by adapting its strategy to the local conditions. Take for example Mexico, and Brazil where Walmart offers financial services and starts to sell life insurance for outside vendors. These services have failed in the US. Hence, one can see, that there was a market gap of financial services and insurances in the Latin American countries, which Walmart succeeded to fill. Walmart has to look for these kind of market gaps and find a suitable way to fill them accordingly to the regional and cultural conditions.

7. In order to find these market gaps, Walmart should have researched the consumer needs and values first. German values are focused on the family, free time and vacation. They are „the traveling nation“, so Walmart could have made use of the German travel habit, by specialized benefit programs, such as international vouchers and special family trips to other countries. They could have developed an international Walmart’s club card, suitable in any Walmart around the world and due to which a customer could buy in any country with any currency they like. This would have made shopping a lot easier and more attractive for the German customer all around the world. As mentioned before, family is positioned first in the German culture. Hence Walmart should have made the shopping experience to a family adventure. They should have built playgrounds and restaurants in their markets, so going to Walmart equals a family trip. This way the whole family would have been integrated in the one-stop shopping experience. Hereby another problem for German mothers would have gotten solved as well.

In Germany it is still common, that the mother is responsible for cooking, cleaning and looking after the children, while the father goes to work. Sometimes it is hard for a German woman to manage all these three things together, hence when going to Walmart they could enjoy a relaxed shopping experience while knowing that her child is taken care of.

8. Next aspect Walmart should have recognized is that the consumer behavior of Germans are not easy to change. They prefer to go to the same supermarkets, they already know, so another difficulty Walmart had to face was how to attract the customers in order to change their consumer behavior on the long run. To succeed in that mission, the first thing Walmart should have found out, now to influence their prospective customers most.

So in order to attract women to buy in Walmart stores, they first would have had to influence another target group, who is then reguiding the mission to the main target group. Close relatives, especially children have the most impact on mothers, hence Walmart has to convince the children that their mothers have to buy at Walmart.

On the one hand side this can be achieved by the before mentioned new set up playgrounds