Retail Presentation
Transcript: The replication of domestic operations abroad (Zentes et al, 2011) Competition Culture 'There are big differences between the Wal-Mart culture and German customer values' Gerhard and Hahn (2005) 'Imported its U.S.-style company ethic, which includes strongly discouraging interoffice romances. Many employees found the code intrusive.' BusinessWeek.com 'German Wal-Marts adopted the U.S. custom of bagging groceries, which many German consumers find distasteful because they tend not to like strangers handling their food' Business Week 'It is illegal to sell below the buying price in Germany' Gerhard and Hahn (2005) 'Walmart are now focusing on Latin America and Asia' Business Week 'Walmart in Latin America last year boosted its revenues by 31.4 percent to $27.2 billion' Latin Trade.com Walmart had difficuilties acquiring “same image as Aldi or Lidl” (Gerhard et al, 2005:15) “the brand’s domestic market in the US began to collapse” (Wigley et al, 2005:537) “a bad guy that there’s a concerted effort against” (Clifford, 2011:B1) “consumers think that Wal-Mart is more expensive than Aldi” (Gerhard et al, 2005:16) “the pressure on brands today is intense” (Kent et al, 2003:72) Different shopping trends in Europe than the US. “development varies from one country to another” (McGoldrick et al, 1995:24) Trends in the US tend to spread from one state to another as it is a single country. Aldi- chose to diversify in Globl recession. Target Market. Chose to internationalise at a time where their brand was untarnished. Walmart- chose to internationalise at a time of bad brand impression. Internationalised when competition was high. For Watching Case Studies: Walmart internationalise to Germany in the late 90's "Funded by public ownership" (Wigley et al, 2005) Wigley et al, 2005 identified 4 emergent themes when retailers internationalise Saturated domestic market Hostile competitive market Tesco Financials Ansoff's Product Market Matrix Why? Where? How? When? Brand Image Internationalisation Favourable operating environment Why? Carrefour Financials Source: Tesco Annual Report 2011 Pull Factors - Dan Jones Greg Nash Dan Mason Charlie Bloxham Economic balance Internationalised to America in 2011 and at the time of global recession. Region 2010 turnover (€m) Annual growth % Europe (excluding France) 25,058 -1.8 Latin America 10,598 31.3 Asia 5,843 18.5 'Wal-Mart makes $16 billion in annual sales in Japan, China and India' (Bloomberg, 2011) Any Questions? 'It is illegal to sell below the buying price in Germany' Gerhard & Hahn (2005) Aldi internationalises to the US by quietly setting up "small stores around the country" (Clifford et al, 2011: B1) Large market Correct stage of the Business Life Cycle Economical balance Brand image Timing & Tactics Cultural differences Timing & Tactics Why? The Business Life Cycle When? Limited growth opportunities Adapting to cultural changes Bibliography http://latintrade.com/2011/08/latin-500-walmart-latin-american-success http://www.businessweek.com/globalbiz/content/jul2006/gb20060728_594752.htm Gerhard, Ulrike and Hahn, Barbara, Wal-Mart and Aldi: Two retail giants in Germany, 62 (2005) http://www.bloomberg.com/news/2011-03-30/wal-mart-makes-16-billion-sales-annually-in-asia-price-says.html Williams, D. (1992b), “Motives for retailer internationalisation: the impact, structure and implications”, Journal of Marketing Management, Vol. 8 No. 1 Schmidt, I. (1997) Concentration in retailing and buying power: in Wirtschaft und Wettbewerb 2. pp. 101-119 Kacker, M.P. (1988), “The role of global retailers in world development”, in Kaynak, E. (Ed.), Transnational Retailing, Walter de Gruyter, Berlin, pp. 33-42 Scott, S., (11/09/2007) The intersection of politics, religion, media and business, Available at: (http://samueljscott.wordpress.com/2007/09/11/philosophical-life-cycles/), (date accessed: 22/02/2012) Wigley, S., Moore, C. & Birtwistle, G,(2005), ‘Product and brand- critical success factors in the internationalisation of a fashion retailer’, in International Journal of Retail & Distribution Management, 33, (7), pp. 537 Clifford, S., (29/03/2011) Where Wal-Mart Failed, Aldi Succeeds, Available at: (http://www.nytimes.com/2011/03/30/business/30aldi.html?pagewanted=all), (date accessed: 22/02/2012) Gehard, U. & Hahn, B,(2005), ‘Wal-Mart and Aldi: Two retail giants in Germany’, in GeoJournal, 10, (62), pp. 15-16 Kent, T & Omar, O.,(2003), Retailing, Hampshire: Palgrave Macmillan. McGoldrick, P & Davies, G.,(1995), International Retailing Trends and Strategies, London: Pitman Publishing Zentes J, Morschett D, Schramm-Klein H, Strategic Retail Management: Text and international Cases, 2011, Gabler Verlag Why Not? Attempted internationalisation in the "economically boyant time" of the late 90's (Gerhard et al, 2005:15) Region 2011 Turnover (£m) Annual growth % Europe revenue 9,192 5.4 US revenue 495 41.8 Asia revenue 10,278 21.4 Wal-Mart under estimated an already developed retail structure
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