...Case Study: Wal-Mart’s failure in Germany Wal-Mart Stores, Inc. is the largest retailer in the world, the world’s second-largest company and the nation’s largest nongovernmental employer. Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The Company’s mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam’s club segment includes the warehouse membership clubs in the United States. The Company’s subsidiary, McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States (“Wal-Mart International Operations”, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China Wal-Mart’s entry and operation in Germany Wal-Mart’s initial entry into German market was through the acquisitions...
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...Global Financial Management FIN630 AIU Abstract This paper will have a comparative analysis of starting operations on establishing a Greenfield production facility overseas. This comparative analysis will include the countries’ currencies, trade policies, culture, and a recommendation with a supporting rational for the country selected. Global Financial Management Introduction Acme, a U.S. multinational enterprise, is planning the stages of establishing a Greenfield production facility overseas. Acme is expanding its international program. The two selected foreign countries for which the steering committee has proposed to start operations in are Germany and Japan. A comparative analysis between the two counties will include the currency of each country, trade policies, and cultural variables that can affect the operations and profitability of the production facility. This paper is meant to discuss which of the two countries are recommended to begin the production facility in. Germany Germany, a federal republic, has the largest population of all the European Union, or EU. Germany has the world’s third largest economy, and it produces automobiles, engineering products, electronic equipment, communications equipment, chemicals, and pharmaceuticals. The most widely spoken language in the EU is German (Germany, Europa, 2013). Currency / Trade Because Germany is a part of the EU, its currency is the euro. Germany has relatively few non-tariff barriers...
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...22 pages Table of Contents Introduction 2 Case presentation 2 The Wal-Mart concept 3 Institutional challenges [to be deleted] 4 Cultural challenges [to be deleted] 4 German market 5 Theoretical Background 5 The cultural perspective 6 The institutional perspective 9 Case Analysis 12 The cultural perspective 12 The institutional perspective 15 Recommendations 19 Cultural 19 Institutional 20 Limitations 22 Cultural 22 Institutional 22 Conclusion 23 References: 25 Introduction The purpose of this paper is to address and analyze the challenges Wal-Mart faced during its entrance into the German market in the late 1990s. We have analyzed this with the following problem in mind: “Which aspects, both cultural and institutional, led to Wal-Mart’s failure in Germany and what should they have done instead?” We will approach this problem by outlining theoretical frameworks for analyzing cultural and institutional aspects of a company. We will then employ said theories in order to analyze the case of Wal-Mart’s failure in Germany. Finally, we will come to a conclusion concerning what they should have done as they entered into the German market. Different forms of distance CAGE, Taste and deep-seated preferences, strong national identities, management lacks diversity, mismatch, handling cultural and institutional distances is the essence of international management. Did Walmart start in culturally proximate markets? Customer bahaviour...
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...STUDENT ID: 13000357 | ER3S72 | GLOBAL BUSINESS MANAGEMENT REPORT ELECDYNE | | PROFESSOR JOHN DAVIDSON | JANUARY 2014Abstract This report is meant for Japanese SME Elecdyne and by the use of analytical frameworks to analyse the internal and external business environment of the electronic industry, aims to provide Elecdyne with and conclude the most suitable country to internationalize in. The later part of the report will cover the different types of FDI and through critical evaluation, the most suitable type of FDI will be decided on. In this report, academic references are used to provide a basic understanding of internationalization and the purpose of analytical frameworks such as the STEEP analysis, the SWOT analysis as well as the PEST analysis. Abstract This report is meant for Japanese SME Elecdyne and by the use of analytical frameworks to analyse the internal and external business environment of the electronic industry, aims to provide Elecdyne with and conclude the most suitable country to internationalize in. The later part of the report will cover the different types of FDI and through critical evaluation, the most suitable type of FDI will be decided on. In this report, academic references are used to provide a basic understanding of internationalization and the purpose of analytical frameworks such as the STEEP analysis, the SWOT analysis as well as the PEST analysis. Key words: internationalization, STEEP, SWOT, PESTAL, electronics industry,...
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...JULY 16-2013 | HB PROPER INTERNATIONAL BUSINESS STRATEGYSaju Alex Hulon Bahar Pascale Legagneur Tracy McKenney Lauren Spruill | Global Business Course Summer 2013 – Dean/Professor Tilokie Depoo Abstract HB Proper is online financial consulting and business services company that caters to small business, entrepreneurs, and even working class. The company also conducts research on outsourcing, payments, and financial markets. The purpose of this draft is to present a business analysis for operational expansion to an international market, particularly in Europe, most specifically London or Frankfurt. SWOT Analysis - International This SWOT Analysis is a comparison to other competitors in the financial services industry with similar characteristics. Strengths | Weaknesses | * informed team of experts across different scopes of business operation * new marketing strategies and major enticing research/products. * competitive prices in an industry expected to be in demand. * technological knowhow and constant innovation on a technology side. * low cost, high yielding software to conduct daily operations. | * low staffing in comparison with projected demand. * low network utilization in international markets * low liquidity. * language and cultural barriers. | Opportunities | Threats | * Alliance with other small business with specific niche expertise. * Moving to a location with stronger currency and business friendly environment. | * new innovative...
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...Cultural Challenges When Entering the Global Market Prepared by: Dennis M. Reilly, Regent University, LDSL 724, Cultures & Values I. Executive Summary Globalization can be defined as the inevitable integration of markets, nation-states, technologies and people in a way that is enabling individuals, organizations and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before. Culture has become a highly significant factor in determining the success in today's international business environment. In particular, organizations entering the foreign markets either by expansion or mergers and acquisitions (M&A’s) are known to suffer at a high failure rate due to not understanding and preparing for cultural differences. Studies suggest that failure is due to different and often controversial relationships between cultural differences, integration and performance. The purpose of this white paper is to examine the cultural concerns when American corporations/organizations enter foreign markets and the impact cultural understanding or the lack thereof has on their success or failure. II. Culture “Culture is not only all around us but within us as well”. Each individual within an organization comes with a unique background and culture. Culture can be defined as the blending of values, politics, beliefs, behaviors, customs and attitudes that distinguishes one society from another. Since culture is a learned behavior that encompasses...
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...Topic Review: General Management Effective cross-cultural management has to be grounded in a detailed knowledge of individual cultures. Discuss using examples from two multinational companies. I/ Introduction: In times of rapid globalisation and economic development growth, the environment of business has become more and more complicated as a huge number of firms want to globally expand their businesses. Subsequently, the managerial implications of cross-cultural management is the challenge of this development. As Abbe (2007) states, cross-cultural leadership has developed as a way to understand leaders who work in the global markets. Culture is the “software of mind” that can influence people’s patterns of thinking and behaving. (Hofstede, 1997). Referring to a work of He and Liu (2010), different characteristics of culture result in thinking, understanding and communication diversity. These diversities more or less make organisational development and management difficult. Therefore, multicultural managers should create cross-cultural training in their companies in order to increase effectiveness across culture. This essay will be discussing whether effective cross-cultural management has to be grounded in a detailed knowledge of individual cultures with examples of two multinational companies: Wal-Mart and Alfa Laval. II/ The Debate on Cross-Cultural Management: Globalisation has increased the awareness of consumers, and made nations more inter-dependent. In...
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...……….………….……... 6 Socio-cultural Forces …………..…………..…………..……………….……………… 10 Labor Standards in Germany …………………………………………………………... 12 Labor Standards in China ………………………………………………………...…..... 19 Comparative Analysis ………...…………………........…………….……..……....…… 25 Conclusion ………………………......……………………………….……....………… 29 References …………………………...………..……………………………….……….. 31 Appendix A …………………………...………..……………………………...……….. 35 Appendix B …………………………...………..……………………………...……….. 36 Appendix C …………………………...………..……………………………...……….. 37 Appendix D …………………………...………..……………………………...……….. 38 Appendix E …………………………...………..……………………………...……….. 39 Executive Summary As a result of systemic changes in the economy over the last two decades, the world of work has radically changed in eastern European and Asian countries. Transition reforms have led to rapid structural shifts in the economy: China has become a focal point for much of the insecurity that globalization has produced: for the past two decades China has experienced explosive economic growth that has attracted jobs and capital from around the world (Feng, 2007). No other industrializing country has ever attracted jobs at both the high and low ends of the production chain. From basic level assembly work to the upper tiers of industry and services, China is setting the global norm for working standards around the world. Workers in rich and poor countries alike feel the effect of China as global corporations move to...
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...Global Business Individual Project- Hannah Meaney X00103230 Students are required to write a 3,000 word essay which examines macro environmental factors from the perspective of an individual country of the student’s choosing. Introduction: The country that I have chosen to discuss for the purpose of this assignment is Germany. I have been to Germany before, their lifestyle and the way in which they operate their businesses on a day to day basis is highly intriguing to me. By choosing this country to research for this essay I will hopefully gain a deeper knowledge and insight into the differences between Germany and Ireland and the factors which make Germany so unique. In this essay I will look at and explain in detail the Macro Environmental factors and by using the P.E.S.T Analysis I will look at the Political, Economic, Socio Cultural and Technological factors of Germany. I will discuss what the change drivers are within the environment and what implications they have had on the country in terms of opportunities and threats that they may present to Businesses. Background: Germany is located in central Europe. Its’ largest city which also is the capital is named Berlin. It is home to over 80 million people, which makes it the most inhabited country in the European Union today. Germany is a major leader and extremely influential in terms of economics and politics within Europe. It is one of the most powerful leaders in many different ways and has lots to offer. Germany...
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...Cross-Cultural Perspectives Michella Amonson ETH/316 January 16, 2014 Mr. Harralson Cross-Cultural Perspectives This paper is an overview and analysis of the ethical perspective and cultural issues that a global organization faces when interacting outside the United States. I will address and identify the cultural and ethical perspective of the global organization named Walmart. I will also analyze ethical and social responsibility issues that WalMart deals with as a result of being a global organization. I will further compare these ethical perspectives with other cultures that do business with Walmart. Walmart’s Ethical Perspective Walmart belief is built on a foundation of integrity , values of honesty, fairness and objectivity. Sam Walton founded Walmart with the strong conviction that a retailer could help people save money and live better. Since, Sam’s passing away, Mike Duke, Chief Executive Officer, President and CEO of Walmart states “culture is how we work together to fulfill that purpose. It's incorporated into every aspect of our business”. He further states “Our beliefs are the foundation of our culture: service to our customers, respect for the individual, and striving for excellence which rest on the foundation of personal integrity and responsibility(p.1).” Strong adherence to these principles has created a unique work culture at Walmart. No matter where you go — to any of our stores and offices in any of our brands around the world —...
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...below. These questions were chosen to demonstrate your understanding and help you assess your progress. 1. How might cultural, political, or geo-economics challenges affect a global company’s use of the Internet? Give several examples. Geo-economics challenges include the physical distance between the consumer and provider, time zones, telephone connectivity, exchange rates and cost of living in different regions and countries. A company has to adapt and accommodate to the differences in time zones by providing 24/7 customer support or providing international shipping. Cultural challenges are language, cultural and religious differences, as well as social attitudes that differ the work styles and business relationships of people. This may force a company to hire employees that are more accustomed to these cultural or lingual differences and set them up as a point of contact, for example, as customer support. Political challenges encompass rules, regulations and laws that govern different regions and countries, along with tax laws and restrictions. Different countries and/or regions might prohibit importing of certain products. This restriction may be an inconvenience to a company because it disrupts their potential sales. 2. Will the increasing use of the Internet by firms with global business operations change their move toward a transnational business strategy? Explain. Definitely. All current businesses are constantly changing their strategies to include the use of...
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...aware that they were talking about a big investment for such a small business, and that the implementation of the project would require great efforts. If it should would require great efforts If it should fail, it would also likely lead to the traditional business closing down. However, after working with this for a long time, he really saw no other possible way forward Johannes Stiklestad as • • • • • Established in 1950s by Johannes Stiklestad Producing stairs in pine and spruce + archways Producing stairs in pine and spruce + archways In 1982, Per Moen – Johannes Stiklestad son‐in‐ law entered business Stiklestad is not Chairman, and Moen is CEO Strategy: "We shall, according to customer needs, develop and market building products for homes. The products will have an appearance of craftsmanship and quality, be solid and have p q y, good custom‐made designs. We will not serve the cheapest market. Stairs should have a slightly exclusive impression, but we will not serve the very exclusive market. “ y Good reputation among customer: prefabricated houses, medium/small builders, some private 2000 m2 factory floor 2000 m2 factory floor • • Story Export development • • • • • Difficult beginning with failed cooperation with other producers with other producers Summer 2006, contact with Karl‐Heinz Gierke, agent in Hamburg Learned about selling points and Learned about selling points and preferences in Germany Great development – From 5% in 2005 to 65% in 2008 ...
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...International Journal of Business and Management; Vol. 7, No. 16; 2012 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education Cross-Cultural Etiquette and Communication in Global Business: Toward a Strategic Framework for Managing Corporate Expansion Ephraim Okoro1 1 School of Business, Howard University, Washington, USA Correspondence: Ephraim A. Okoro, Department of Marketing, School of Business, Howard University, 2600–Sixth Street, NW, Washington, D.C. 20059, USA. Tel: 1-202-806-1545. E-mail: eaokoro@howard.edu Received: March 22, 2012 doi:10.5539/ijbm.v7n16p130 Abstract The expanding scope of business corporations in the first decade of the twenty-first century is drawing much scholarly attention, and the trend has been described as a fact of life that defies the stretch of human imagination. The concept of global economy has expanded consumer awareness, defined new standards and rules of operations, and increased the need for national and corporate interdependence. Multinational organizations are exploring opportunities around the world, demonstrating sensitivity towards cultural differences in order to gain from the proliferation and growth of international enterprise. Recent studies indicate that while some corporations compete successfully in the global marketplace, others have failed to sustain their competitive advantage because of cultural imperialism or inadequate acculturation of their managers on international assignment...
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...| 2013 | | | [Case 6: Walmart's Global Strategy] | 604.800 International and Comparative Management | 1. Case summary 2006 was one of the years that marked the biggest retrenchment in Wal-Mart’s history. It was the year that Wal-Mart had decided to exit the German market after trying to penetrate it for about eight years. The company undertook its international expansion in the early 1990s to rejuvenate sales and growth. However, on July 30th, 2006, Wal-Mart had announced that it was selling its operations to German retailer Metro. In May of same year, Wal-Mart had also announced that it was selling its 16 stores in South Korea, admitting another internationalization failure. What went wrong with Germany? Wal-Mart had underestimated its German competitors, the power of German shoppers, cultural differences and the power of labor unions in Europe. The company did not expect that these differences would impede its ability to apply in Germany what worked so well in the United States. German competitors offered very low prices, while German shoppers had shown how demanding they can be and that they buy products predominantly based on price; even if that meant going to a few different retail stores during their shopping trip. German shoppers were also not accustomed to workers putting their groceries in shopping bag. Moreover, German regulations limited Wal-Mart’s ability to offer extended weekend hours and sell merchandise below cost. Strong labor unions limited...
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...APPROACHES FOR GLOBAL EVENTS Presented by (Your name) (Your school) Course 25. 1.2012 Outline Introduction……………………………………………..i Background information……………………………….ii Methodology…………………………………………….iii Findings, Results and analysis………………………..iv External environment analysis…………………………v PESTLE analysis………………………………………..vi • Political factors • Economic factors • Social and cultural factors • Technological factors • Legal factors • Environmental factors The competitive external environment…………………………vii • Strengths • Weaknesses • Opportunities • Threats Porters’ five forces tool • Supplier power • Buyer power • Competitive rivalry • Threat of substitution • Threat of new entry Internal environment analysis………………………………..viii Key success factors…………………………………………..ix Analysis of recommendations and conclusion………………x • Ansoff matrix • References…………………………………………………….xi Introduction Many global events like the Rugby world cup, an international trade fair etc are conducted in areas near us but few of us usually take into consideration the strategic approaches behind the success or the failure of these events. The purpose of this assessment is to examine strategic approaches in respect to a global event like the Nuremberg Toy fair in Germany. The report...
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