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This Is Not America: Why Wal-Mart Left Germany (2006)

atlantic-times.com

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Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#2

Post by _delirium »

While I wouldn't completely discount cultural and business-environment differences, this is probably the most relevant part,

> Another fatal flaw was that Germany's retail market is already saturated with discounters such as Aldi and Lidl, meaning that any new arrival inevitably finds itself in the midst of a cutthroat price war.

Walmart's model is to do high volume at low margins with a highly optimized supply chain. But that is already exactly the model of Lidl and Aldi, and there's not a lot of room to beat them at that game.

Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#3

Post by amyjess »

_delirium wrote: post #2

While I wouldn't completely discount cultural and business-environment differences, this is probably the most relevant part, > Another fatal flaw was that Germany's retail market is already saturated with discounters such as Aldi and Lidl, meaning that any new arrival inevitably finds itself in the midst of a cutthroat price war. Walmart's model is to do high volume at low margins with a highly optimized supply chain…

If anyone can out-Walmart Walmart, it's Aldi.

When Aldi came to Dallas a few years ago (I'd like to say 2010-2011ish), they started a price war over milk that resulted in milk prices in Dallas plummeting to 1960 levels.

Edit: Source: http://www.wfaa.com/story/money/consumer/2014/08/10/13621020...

Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#6

Post by raverbashing »

"The company gave the job of masterminding Wal-Mart Germany to an American who didn't speak a word of German. This should surely have been indispensable to finding out what the German salespersons would need to know about local shopping habits."

Well. Culture beats strategy

I love when people think they can learn about a new market from their comfy office an ocean away

Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#8

Post by untog »

amyjess wrote: post #3
_delirium wrote: post #2

While I wouldn't completely discount cultural and business-environment differences, this is probably the most relevant part, > Another fatal flaw was that Germany's retail market is already saturated with discounters such as Aldi and Lidl, meaning that any new arrival inevitably finds itself in the midst of a cutthroat price war. Walmart's model is to do high volume at low margins with a highly optimized supply chain…

If anyone can out-Walmart Walmart, it's Aldi. When Aldi came to Dallas a few years ago (I'd like to say 2010-2011ish), they started a price war over milk that resulted in milk prices in Dallas plummeting to 1960 levels. Edit: Source: http://www.wfaa.com/story/money/consumer/2014/08/10/13621020...

I do wonder what the effect of this is on dairy farmers.

Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#9

Post by lnanek2 »

_delirium wrote: post #2

While I wouldn't completely discount cultural and business-environment differences, this is probably the most relevant part, > Another fatal flaw was that Germany's retail market is already saturated with discounters such as Aldi and Lidl, meaning that any new arrival inevitably finds itself in the midst of a cutthroat price war. Walmart's model is to do high volume at low margins with a highly optimized supply chain…

I like the Aldi I used to go to in Kansas while working there. Cheap, clean and no one bothers you. It actually was a better experience than Walmart, even for this American. They had cool, better carts too!

Re: This Is Not America: Why Wal-Mart Left Germany (2006)

#10

Post by VLM »

"Germany enjoys a healthy pro capita income"

Locally walmart means absolute junk quality for poor people who wait in long lines. The description of Germany is a good fit for retail in general, but not walmart. This truth can't be stated in a commercial publication, walmart spends too much money on advertising, but I think it fairly obvious.

Now Target could have possibly made it. Or maybe walmart could have made it in far southern or eastern Europe in very poor areas.

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