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Corporate Forn1ula Does l"'-Tot Fit the

Gen11an Culture 1

Abstract

In the United States, Wal-Mart customers are greeted with a smile, escorted to the item_ they're looking for, and watch their purchases being bagged by an employee_ These aspects of Wal-Mart; s culture were a complete failure in Germany, however, when the company expanded there in 1997. Wal-Mart also failed on other counts, such as recognizing the status of unions in Gennany and the importance of store location_ What eventually happened to Wal-Mart in Germ.any, and how could it have been prevented? What did W al-Martleam? This case examines the cultural mishaps of America's largest discount retailer.

Introduction

Wal-Mart has become a household name in tht; United States, and in some parts of the world outside the United States. With low prices and a large aiTay of products, Wal-Mart superstores have becorne the chosen "one-stop shop" for many consumers.

Gern1ans, however, don't view Wal-Mart in the same way. In late 1997, Wal-Mart decided to expand into Germany by first acquiring two retailers for a total of 95 store locations_ But Wal-Mart soon learned that its American model simply did not work there_ On so many levels and in so many ways, it was-_an abject failure_

B-rief Ovenr:iew pf \Wat-Ivfart I

Sam Walton and his brother opened the first Wal-Mart store in Rogers, Arkansas in 1962, generating more than�\ l million in sales during the first year of operations_ Wal-Mart expanded quickly and, by 1967, the brothers owned 24 stores with sales over 1n2_6 million_ The cornpany incorporated in 1969 and was listed on the New York Stock Exchange two years later. Focusing operations in sn1all towns, in 1977, the company expanded into Michigan and Illinois and by 1980 there were 276 Wal-Mart stores across the United States (Wal-Mart Stores, 2016).

rnissteps in Germany were costly; however, hopefolly it will force them to be n10re culturally sensitive in foture expansions.

Note

1 Authors: Chen-jun Yu, G., Langharner, T., Powelson, S., Foose, B., Ripple, M.,

O'Neill; B., and Tuleja, E. (Ed.) (2015).

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