Problems Wolmart has encountered in the German market

1.

Problems Wolmart has encountered in the German
market
M-2113
prepared by
Bogatirev Nikita
Maslennikov Vladimir

2.

Failure in germany
Walmart is an American
multinational retail corporation
that operates a chain of
hypermarkets (also called
supercenters), discount department
stores, and grocery stores
They have stores in 28 countries,
even in China. So why did this
company fail in Germany in 2006?
Walmart is one of the most popular
retail chains in the United States.
But in Germany, the chain did not
take root, in 2006, the American
company suffered a complete
collapse on German soil, Walmart
had to close all its stores and
abandon its attempts to conquer
Germany.

3.

The chain was not afraid of
competition, because they
believed they would outbid any
retail chain because of the low
cost of their products. The
problem was that Walmart was not
the cheapest chain in Germany.
40% of retail chains in Germany
use the same low-price policy.
It was this policy that
destroyed Walmart's main
competitive advantage.
According to German law, small
stores can sell goods at lower
prices than hypermarkets. This
way the authorities protect
small and medium-sized
businesses. Walmart had to raise
the cost of some goods,
including milk, butter, flour
and others.

4.

Non-financial problems
Their corporate culture played a cruel
trick. Every Walmart shift began with
group stretching exercises, accompanied
by loud cries of "Walmart! Walmart!"
The company had a "code of ethics" employees had to denounce their
colleagues if they did something wrong.
Those who did not want to "snitch" could
be fired. Flirting and romantic
relationships between employees were also
forbidden
Finally, Walmart did not take into
account the habits of German consumers,
who were not willing to squat to get to
discounted goods and spend hours
rummaging through the aisles for cheap
goods from China.

5.

Additional company problems
• Ineffective implementation
Wertkauf and Spar supermarkets do not
fit the format of broad American trade
at super low prices in premises the size
of an airplane hangar. The location of
the stores was not the best, plus they
were far from each other
• Translation difficulties
The head of Walmart Germany completely
ignored German as the language of
business in Germany. By forcing the
entire staff to speak American, they
achieved the mass dismissal of all those
who did not know it.
• Don’t carry coal to Newcastle
Management generally didn't care about
local laws and regulations, so they were
sued several times by various
authorities.

6.

Thank you for your
attention!!!