Cross-Cultural Business - Walmart Case Study PDF

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Cultural norms, values & company recommendations...

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Walmart Case Study 1. Explain which 2 cultural norms of Germany and Japan most affected Wal-Marts operations in each country. Norms in Germany German consumers are independent shoppers. They are accustomed to shopping without the help of employees. In Germany, customers at Wal-Mart did not like assistance finding what they needed. Additionally, it is out-of-norm for employees to bag customers groceries. Naturally, when Germans see someone grabbing items they just paid for, they assume they are trying to steal them (Helm, 2000). Shopping in Germany is like a cheerless arena. Their retail culture’s formula is “the grumpier, the better” (Helm, 2000). Consequentially, Germans were not fond of Wal-Mart’s storefront greeters nor do Germans value good customer service. This was a lack of cultural awareness as customers interpreted the overly-friendly employees as being artificial and even flirty.

Norms in Japan Japanese culture is habituated to taking their time to find the best shopping deals. They enjoy taking their time and to go from store to store in search of new daily sales. This confused Japanese consumers as Walmart already has low prices (CNBC, 2018). Japanese do not buy in bulk: less is more. Kornienko (2018) stated that “Japanese tend to avoid unnecessary purchases and keep everything to a minimum” (para 2). This could be due to many reasons such as the majority of Japanese live in smaller living spaces than Americans. They have a more minimalistic consumerism culture. 2. What have you learned about culture that is relevant to this case study? Explain. Apply 3 cultural concepts that apply to this case.

Values in Germany Wal-Mart’s locations in Germany were inconvenient for consumers which were only accessible by driving. According to Tiffany (2012), “Unlike many places in the US, Germany and Europe is generally built to allow people to get from point A to point B without using a car” (para. 1). Germans value being able to shop efficiently and they would prefer to find alternative similar products somewhere else: in a central location. Collectivism in Germany Germany’s business structure is a collectivist culture. As stated in the Walmart case study article, “Germany had co-determination rules which allow employees to have a voice in management decisions.” Co-determination allows for Germans to cooperate in decision-making (Berger and Vaccarino 2016). However, Wal-Mart did not make an effort to prioritize its employees. Wal-Mart released an ethics code that allows employees to report inappropriate behaviour in the workplace. This infuriated them as it was portrayed as a tactic to negatively affect their

relationships with their co-workers. This could have been avoided if they consulted with their employees beforehand. Values in Japan Japanese value being able to cook with fresh locally sourced produce. In comparison, Wal-Mart sold pre packaged frozen foods that were not preferred by locals. 3. Wal-Mart has a unique system in the U.S. Which of Wal-Mart’s advantages are transferable overseas and which are not? Wal-Mart has some of the most efficient management information and control systems. They can manage thousands of their stores from their home headquarters. This technology ensures maximum turnover and provides useful benchmark information for future global expansion (Govindarajan, 2002). Wal-Mart is one of the best online retailers in the United States. Online shoppers usually look for the lowest prices. Online services would be an advantage overseas since e-commerce is growing dramatically. The Mintel Press Team (2017) revealed that “as many as 93% of German consumers have shopped online in the last year…. consumers aged over 55 are beginning to realize the advantages of shopping online” (para. 1). 4. What 2 recommendations do you have for the company to handle future situations more effectively? Community Feedback Wal-Mart needs to gather input and feedback from its employees and community. For example, Wal-Mart forced employees to speak English as the store’s official language. Although most Germans speak English, there was a large communication barrier between staff and customers. This prevented the forming of teams at Wal-Mart (Schmidt, 2014). Instead of Wal-Mart trying to change a country’s culture, they should learn how to adapt to their culture.

Foreign Market Research Wal-Mart needs to conduct foreign market research to ensure customer loyalty and customer satisfaction. Macaray (2011) found that “Germany is anti-American when it comes to name-brand retailers” (para. 4). Germany and Japan both value shopping local; Japan especially values buying local produce. Additionally, Wal-Mart’s store layout is built to influence consumers to purchase more products than they need. But Germans found the time roaming around the large stores to be a waste. They do not view shopping to be a fun experience (Kaldik, 2000).

References

Berger, B., Vaccarino, E. (2016, Oct 13). Codetermination in Germany – a role model for the UK and the US? Bruegel. R  etrieved from https://bruegel.org/2016/10/codetermination-ingermany-a-role-model-for-the-uk-and-the-us/ CNBC. (2018, Oct 28). Why Walmart Is Failing In Japan  [Video file]. Retrieved from https://www.youtube.com/watch?v=32_fm92-EF8 Hamza, S., Nizam, I. (2016). Why Walmart Failed in Germany? An Analysis in the Perspective of Organizational Behaviour. International Journal of Accounting & Business Management, 4 ( 2), 210. doi: 10.24924/ijabm/2016.11/v4.iss2/206.215. Helm, B. (2000, Oct 28). Service with a smile frowned on by Germans. The Telegraph. Retrieved from https://www.telegraph.co.uk/news/worldnews/europe/germany/1372243/Service with-a-smile-frowned-on-by-Germans.html Kornienko, A. (2016, Apr 16). Coming to Asia: Wal-Mart’s Blunders in Japan. Retrieved from https://gfluence.com/coming-to-asia-wal-marts-blunders-japan/ Macaray, D. (2011, Sept 29). Why Did Walmart Leave Germany? Huffpost. R  etrieved from https://www.huffpost.com/entry/why-did-walmart-leave-ger_b_940542 Schmidt, S. (2018, Aug 13). Walmart’s Competitive Advantage: 3 Key Success Factors. Retrieved from https://blog.marketresearch.com/walmarts-competitive-advantage3-key-success-factors

Tiffany. (2012, Mar 19). So you want to move to Germany… Walking & Bicycling. Retrieved from https://www.noordinaryhomestead.com/walking-bicycling-in-germany/...