International retailing Essay Example | Topics and Well Written Essays - 1750 words

International retailing - Essay Example On the 28th of July in 2006 Wal-Mart sold its 85 chain German outlets to Metro AG, which is a diversified cash and carry retail chain that has Germany's largest market share (Clark, 2006)1. 1997 marked the year that Wal-Mart entered Germany when it completed negotiations to acquire 21 outlets belonging to the Wertkauf hypermarket chain (Wal-Mart Facts.com, 2007)2. This was following by Wal-Mart acquiring 74 stores of the Interspar hypermarket chain that is a subsidiary of Spar Handels AG (Wal-Mart Facts.com, 2007)3. The preceding represented Wal-Mart's entry into the European market, using Germany as the launch point. Listening to customers represents one of the first and most important aspects in entering a foreign market as the nuances of consumers differs in their respective countries, thereby requiring adjustments in marketing, presentation, operational and other procedures. Wal-Mart's extraordinarily successful American operations that meshed leading edge marketing, a new approach to its corporate culture as well as organisational structures, resulting in the company being vaulted into the largest and most successful retailer in the world. ... The preceding success in the United States does not necessarily represent an effective, and or workable game plan in other markets. Given Wal-Mart's reputation and successes, the company only entered the international market in 1991 that pales in comparison to Carrefour, which has been retailing in foreign markets for in excess of thirty years (Incandela et al, 1999)4. The international market represents a different set of challenges, experiences as well as internal operating dictates that need to be understood and incorporated into a retailer's operational mode, a lesson that Wal-Mart learned in Germany. This study shall delve into Wal-Mart's entry into the German market to determine the reasons as to why it was not successful there. Wal-Mart and Germany Wal-Mart's lack of success in Germany is a classic example of using a business model that is not applicable in terms of the market it is applied in. A look into the facets that represented a contribution to the foregoing entails delving into the market entry strategies as well as operational tactics that were employed, with the foregoing compared with market entry and expansion theories as well as practices. Wal-Mart's entry into Germany represented the fact that it has the largest market in Europe as represented by its population, strong economic underpinnings, affluence of its citizens as well as the awareness of products made in the United States (United States Department of Agriculture, 2004)5. Germany ranks third internationally in terms of consumer food expenditures (United States Department of Agriculture, 2004)6. Critical recommendations as offered by the United States Department of