Walmart Case Study

WALMART’S
GERMAN
MISADVENTURE
SUBMITTED TO PROF. RITU
BERELLIA
GROUP PARTICIPANTS:
21BSP2988_AANCHAL ARORA
21BSP2159_SHUBHAM MAHAJAN
21BSP1515_DATTEN PRAJAPATI
21BSP1837_OJASWINI RATHOD
21BSP1491_BHAVYA MAHESHWARI
Advanced Marketing Management
ABOUT WALMART 2
 In 1962, Sam Walton and his brother opened his first store at Rogers, USA
 By 1967, Walmart had 24 stores with sales of $12.6 Million
 By 1977, Walmart was working very successfully and had increased in inventory
 By 1978 it also purchased shoe company, later pharmacy, auto services center
and jewelry divisions
 By 1980 Walmart had 276 stores with $1.4 Billion sales
 The goal of Walmart is to provide low prices to customers and work for there
satisfaction
 By 1999 Walmart entered into international markets
 By 2003 Walmart became 5th in fortune magazines global most admired
5/21/22 Advanced Marketing Management

WALMART IN GERMANY: 3
 Due to same cultures and same legal environment Walmart thought of launching its
store in Germany
 Walmart thought that German is the best European place to expand its background
as per peoples demand
 Also German is a price sensitive market and the philosophy of low prices for the
customers would 100% suit the German Market
PROBLEMS IN GERMANY:
 It had high labor cost, high real estate Prices and a very inflexible environment
 Analysts were critical of this decision as the German retailing industry was
experiencing slow growth rates and retailers were indulging in price wars which
eroded margins badly

ENTRY STRATAGEY GONE WRONG: 4
 Walmart thought of buying the German famous retail Interspar stores because
it was running into losses
 But these stores were not matching Walmart stores so Walmart decided to
renovate it and them and spend about $150 Million
 The major challenge for Walmart was to change the customer perception of
German consumers as they started to criticize Walmart for buying Interspar
Stores as they had made heavy losses and had a poor brand image
 So we think buying these stores was a bad idea for Walmart
 Apart from this there was also one more entry problem for Walmart to get in
Germany that was the government was refusing them to give licenses for food
and grocery retailing
 Walmart to enter into German market had to go in for acquisitions

PROBLEMS IN OPERATING ENVIORMENT AND COMPETITIORS: 5
 As we know Walmart was offering low prices, as they did the same in Germany but the competitors like Aldi, Lidl, Ewe and
Edeka (Some famous retail shops) also lowered the prices
 Conumers were getting confused and they were shifting there perception to the other retail stores
 Slowly and steadily Walmart was not considered as lower priced by German Public
 There was lack of vendor relations that affected Walmart's Operations in Germany
 Walmart also did not have good relations with the suppliers, and because of that it ended up selling those products which
customers didn’t demand
 There was shortage of workers also because Walmart was offering low wages
 There was one more issue faced by the workers that there were low wages and also not good working conditions according to the
culture of German
 Not only these Walmart also faced various legal problems
 Apart from these Walmart had purchased 2 companies Wetlaufer and Interspar they had completely different cultural
Environment which was very difficult for Walmart to adapt itself
 Walmart also was facing language problems in Germany
 Also the customers wanted to be Brand Loyal to the German companies and not to the company who was not from German

FUTURE PROSPECTS 6
 After 5 years of entering German market, Walmart faced a great

impact on its sales it fell for atleast 5%
 Also customers of Germany were not satisfied because of culture

according to the newspapers Walmart stated at 7th positions out of
10 major retailers in Germany in terms of customer satisfaction
 Walmart now after seeing such situation claimed that they will
focus only on opening small stores in Germany
 There is still a lot of time for Walmart to enter into German Market

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WALMART’S

 By 1967, Walmart had 24 stores with sales of $12.6 Million

 By 1980 Walmart had 276 stores with $1.4 Billion sales

 By 1999 Walmart entered into international markets

 By 2003 Walmart became 5th in fortune magazines global most admired

5/21/22 Advanced Marketing Management

5/21/22 Advanced Marketing Management

 So we think buying these stores was a bad idea for Walmart

 Walmart to enter into German market had to go in for acquisitions

5/21/22 Advanced Marketing Management

5/21/22 Advanced Marketing Management

 After 5 years of entering German market, Walmart faced a great

 Also customers of Germany were not satisfied because of culture

5/21/22 Advanced Marketing Management

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