Read the following article and write an analysis focusing on the question below:
•Fernie, J., & Arnold, S.J. (2002). Wal-Mart in Europe: Prospects for Germany, the UK and France. International Journal of Retail & Distribution Management, 30(2/3). (AN 6564149).
What ethical measures and corporate social responsibility initiatives might Wal-Mart have undertaken to retain a presence in Germany? Solution Preview
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In order to retain a presence in Germany, Walmart would have needed to take certain ethical and corporate social responsibility initiatives. Germany seemingly offered Walmart a natural market for expansion, based upon Alexander and Meyers’ (2000) internationalization categorization, in that the industrialized country offers a large population interested in discounted shopping. However, Walmart erred in assuming it could simply transport the most appropriate Walmart format to the country, and “be the McDonald’s of retailing” (Fernie & Arnold, 2002), unbending to the German market.
Initially, Walmart viewed the German market to hold great potential. It is the largest retail market in Europe and “per capita retail sales are more than one-third higher than Europe as a whole” (Fernie & Arnold, 2002). In addition, it was geographically located in a manner that would allow Walmart to easily expand to nearby countries. Furthermore, the German market was equated to Arkansas, Walmart’s birthplace, with a consumer that would benefit from both low prices and excellent customer service. However, Germany presented many challenges. Aldi, a deep discount food and warehouse club retailer is headquartered in Germany. In addition, there were other well-established deep discount operators. Walmart attempted to succeed by delivering high quality service, combined with a pleasant in-store appearance and ambiance, coupled with cost leadership.
Beyond the size of the market and favorable geographic proximity of the country, Walmart failed to assess the German market accurately. The German consumer is driven by “price, price and price” (Fernie & Arnold, 2002). Aldi is well established and runs attractive, pleasant stores with excellent prices. Aldi has made a point of listening to customers, and their German ownership helps the company respond favorably to the needs of consumers. Meanwhile, Walmart was seen as an American outsider, who was helping drive down prices but not truly establishing itself as part of the German culture. One of the first measures Walmart …
This detailed solution discusses the ethical measures and corporate social responsibility initiatives might Wal-Mart have undertaken to retain a presence in Germany. It is based on the case:
•Fernie, J., & Arnold, S.J. (2002). Wal-Mart in Europe: Prospects for Germany, the UK and France. International Journal of Retail & Distribution Management, 30(2/3). (AN 6564149) (included)
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