Corporate Strategy Case Study

Wal-Mart's Exit from South Korea and Germany: What Went Wrong

OR

Abstract:
The world’s largest retailer, Wal-Mart was growing at a rapid pace with more than 6100 stores world wide, with net sales reached to more than 6100 stores globally, with the net sales reached to more than US$ 312.4 bn for the year ended Jan 31, 2006. Since 1990, the retailer was pursuing aggressive international expansion strategy across the globe, but the company failed miserably in Germany and Korea. Wal-Mart exited from the both the two country by selling it’s under performing business divisions to other retail companies. Analysts perceived that the company failed to adapt its business model to both the countries, failed to understand the customers of the respective country and struggled hard to grab a significant market share in competitive German and South-Korean Retail market. This case deals in detail with why Wal-Mart failed to replicate its successful business model in Germany and South Korea and its decision to exit from the two country was strategically correct or not.

Pedagogical Objectives:

• To understand the retail market both in Germany and South Korea
• To discuss about Wal-Mart’s strategic initiatives
• To analyse Wal-Mart’s failure in both the countries
• To debate on its decision to exit from both the countries.

Keywords : Wal-Mart; Carrefour; Tesco; Aldi; Metro AG; South Korean retail industry; German retail industry; Discount store; Hypermarket; Departmental stores; Restructuring / Turnaround Strategies Case Study; Supermarket; Conventional stores; Convenience stores; E-Mart; Global retail industry