• Growth. Economic growth in the host country would normally make FDI even more attractive, thereby increasing the barriers to exit from such a country. However, the attrac- tiveness of the location would make such operations more likely targets for takeovers by other investors. 1. Giới thiệu sơ lược về Walmart? 2. Walmart đã gặp những rủi ro gì? Thuộc môi trường nào?
Exhibit 12.2 Walmart’s withdrawal from the German market
Walmart (www.walmartstores.com) was founded by not permit video surveillance of their work. As a Sam Walton in 1962, with the opening of the first consequence, Walmart Germany had several con- Walmart discount store. Today, there are more than flicts with the trade union. 11,000 retail stores in many different countries. 4. There were some cultural misunderstandings too: Walmart had high hopes for Germany (the world’s German Walmart shoppers didn’t like having their third-largest retail market after the US and Japan) purchases bagged by others and German shop- when it entered the market in 1997 by acquiring pers like to hunt for bargains on their own, with- Wertkauf GmbH with its 21 hypermarkets. One year out smiling assistants at their elbows. later Walmart aquired a further 74 Interspar stores 5. Some of the American products did not fit into of Spar AG. the German homes: for example, American pil- However, nine years later Walmart had to with- lowcases are a different size from German ones. draw from the German market. What happened? As a consequence, Walmart Germany ended up There are several explanations for this withdrawal: with a huge stock of pillowcases that they could not sell to German customers. 1. Walmart appointed a CEO for Germany who spoke 6. Walmart did not reach ‘critical mass’ in Germany. no German. Not only that, he insisted that his man- Its infrastructure in Germany, which involved two agers work in English. The next CEO, an English- HQs (for a while) and three logistics centres, piled man, tried to run the show from England. The men up costs without achieving economies of scale. at the top misunderstood both the employees With its relatively low number of stores, it only and the customers. Other surprises for Walmart reached 2 per cent of the German food market. It were Germany’s short shopping hours, including was up against fierce competition from Aldi and almost no Sunday trading. Walmart Germany was Lidl, two German discount chains. For example, frustrated by German shopping regulations – the Aldi had a network of 4,000 stores, compared feared Ladenschlussgesetz which regulates store with Walmart’s approximately 100 stores. opening times – and restrictions on discounting. 2. Walmart’s American managers pressured German After nine years of trying to make a go of it, in July executives to enforce American-style manage- 2006 Walmart sold its 85 stores to German rival ment practices in the workplace. Employees were Metro. forbidden, for instance, from dating colleagues in Walmart’s attempt to apply the company’s positions of influence. Workers were also told not proven US success formula in an unmodified man- to flirt with one another. ner to the German market turned out to be a fiasco. 3. The German Walmart management threatened to This case shows how important it is to address close certain stores if staff did not agree to work cultural differences when setting up international longer hours than their contracts foresaw and did operations.
Sources: The Economist (2006), ‘After struggling for years, Walmart withdraws from Germany’, US Edition, 5 August; The Independent (2006), ‘Mighty Walmart admits defeat in Germany’, 29 July, London; www.walmartstores.com; and other public sources.
The Infallible Mysteries of the 1960s, 1990s and the Late 1950s Market, Customers and Production Rediscoveries: Understanding the Fordist Approach to 21st Century Business Success
