How not to do it - Learning from Walmart's failure
Learning from Wal Mart's Failure
On July 29th, 2007, Germany's most popular TV evening news, "Tagesschau" (Review of the Day) announced: After eight years of fruitless trial and error the world's largest retailer, Wal Mart, today decided to sell its 85 German stores to local competitor Metro. This put an end to a long chapter of poor inter-cultural management, failed international marketing and millions of dollars burnt.
For eight years Wal Mart tried to impose their American way of doing business, of running a supermarket chain, of managing stores on Germans. But they already had their own supermarkets with prices equally as low and an offering that actually matched people's shopping lists. Pricing was one of Wal Mart's biggest problems because unlike in many other markets where Wal Mart is prospering in Germany price dumping is illegal. That left Wal Mart with very little to lure people to their super stores outside of the cities centers' that were only accessible by car.
Another problem was their one-stop-shopping approach: Germans simply find it suspicious to buy their groceries at non-grocery stores half an hour away from where they live. The local competition had their - much smaller but equally as low priced grocery only stores just around people's corners. So in order to add value Wal Mart decided bring in the American bag packer - younger people, high school or college students at the cashiers that would pack people's groceries into bags that were provided free of charge.
That made Germans even more suspicious: Why is a stranger touching my food? Is he really putting everything into the bag or is he keeping some things aside that he might like for himself? Do I know have to tip him, spend even more money? If not, why would he be doing this? And since when are shopping bags free? Instead of attracting customers it scared them away even further.
Public opinion about Wal Mart was also weakened by continuous reports about the company's conservative codes of conduct and ethics: Not only were employees not allowed dating each other or becoming couples, they were also encouraged to denounce those who did. The last time Germans were officially encouraged to denounce fellow citizens was during the Nazi dictatorship era.
You only get one chance to make a good first impression. Wal Mart chose to act like a bull in a china shop. Other American companies like Nike, McDonald's, Burger King, Dell etc. etc. are doing well in Germany and make money. With the help of DonnellySpire you will make an excellent first impression that leads into a continuous and sustainable stream of revenue from the German market.
(C) 2006-2012 DonnellySpire Ltd. - www.DonnellySpire.com - All rights reserved