Corporate Strategy Case Study

Wal-Mart’s Exit from South Korea

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Abstract:
Wal-Mart , the world’s largest retailer was growing at a rapid pace with more than 6100 stores world wide, their net sales reached to more than US $312.4 billion (bn) for the year ended in Jan 31, 2006. Wal-Mart was pursuing aggressive international expansion since 1990, but this strategy was apparently not applicable to the country of South Korea. The world largest retailer was pulling out of the peninsula-where it’s wholly owned “Wal-Mart Korea” arm had struggled since 1998 as they failed to attract the local customers. The management said that it had agreed to sell its 16 South Korean outlets to Shinsegae, a local retailer, for $882 million after Wal-Mart incurred a loss of US $10.58 million in the year 2005, on sales of US $ 802 million. Shinsegae was South Korea's largest discount store chain and also used to run the country's third-ranked department store chain E-Mart. This case gives an idea about the failed strategy of Wal-Mart, globally the largest retailer.

Pedagogical Objectives:

• To understand the global retail market
• To discuss about Wal-Mart’s strategic initiatives in South Korea
• To analyse Wal-Mart’s failure in South Korea
• To argue on its decision to exit from South Korea

Keywords : Wal-Mart; Retailer; Wal-Mart Korea; Shinsegae; Discount store chain; E-Mart; Pull-out; Carrefour; Tesco; 'Warehouse' format; E-Land; Corporate Strategies Case Study; Strategy; Everyday low prices; Korea Makro; Dry goods