Walmart's Failure in Germany

Business in Germany: Wal-Mart's Downfall

Wal-Mart is a Multinational American Retail Company, founded in 1962 by Sam Walton. It became incorporated in October 1962 and listed on the New York Stock Exchange in 1972. The retailing pioneer started as an individual store in Rogers, Arkansas with the intention of providing small rural towns with all-inclusive discount stores. Walton was the first businessman in the retail sector to pursue a low cost strategy in a chain store format. The philosophy of providing everyday low prices and superior customer service has remained despite the vast expansion of the company. The industry debutante currently possesses 11,000 stores, 750,000 employees, and grosses $10 billion in annual revenues. Wal-Mart achieved success through strategies based on: small town locations, Relentless cost control, Partnerships/Power with suppliers, unparalleled distribution and logistics management and customer service oriented practices.

A number of factors contribute to its low cost sales success, yet the predominate factor is its cross docking technique. Goods are consistently delivered to the store every 48 hours and, in turn, allow little to no stocking requirements. This strategy permits Wal-Mart to replenish its shelves four times faster than its competitors. Additional low cost procedures that are operated include bulk buying stock and the Wal-Mart’s self-distribution of goods.

Wal-Mart became globalized in 1991 when the firm pursued a joint venture with Mexican retail company ‘Cifra’. Since, Wal-Mart’s global presence has continued to flourish and currently operates in 27 countries hosting 6,200 ‘locally customized stores’. Wal-Mart’s initial international adaptations were successful. When Wal-Mart entered Mexico, the firm worked closely with Mexican executives when selecting products to sell and eradicate products that were not desired, such as ice-skates. In addition, upon entry into Brazil and soon after its joint venture with Cifra, US...