Case Study - Retail Internationalization: Gaining Insights from the Wal–Mart experience in South Korea
SITUATION
The case in this study presented us a failure of Wal-Mart; a world leading company, in the South Korean market.
Wal-Mart retreated from South Korea in 2007 claiming not being able to touch the market's heart.
However, the case showed us problems they had during the period in there and also mentions that giants, such as Google, Nestle and Nokia retreated from this market too.
MAIN PROBLEMS
The main problems, as mentioned, were:
-The location of the shops was a little bit far from the big centers, where the South Koreans usually did their shopping
- Wal-Mart was trying to sell and displaying products South Koreans did not find attractive or did not want to buy on a market; they looked for food and beverages in places like that, so the demand was not the same as in USA. The promotion was incorrect and so the product mix.
-The reason why Wal-Mart is a success was never rally applied in South Korea; the pricing was not practiced as it was in the USA. So, Wal-Mart could not count on its main strength.
The target market was never understood by Wal-Mart in South Korea.
ANALYSIS
The South Korean market showed as a different market to the world when other big multinational companies failed to succeed in the area.
When Wal-Mart found itself not catching the heart of its customers, and failing to deliver its strategy of low prices, was a shock. Wal-Mart is not used to fail.
The locations