Wal-Mart, the world’s largest retailer, has failed and pulled out its operations in two countries in 2006. This is a good case to discuss about how regional dynamics may effect internationalization as Wal-Mart is successful in countries like Mexico, Canada and UK while it faced a failure in South Korea and Germany.
Wal-Mart entered South Korea in 1998 when the South Korean Government opened up retail markets to foreign ...view middle of the document...
Wal-Mart was not able to compete with the domestic South Korean retailers as they were already well established in the minds of people for their quality and low price (Jeyachandran & Yasmeen, 2011).
The major mistake which brought Wal-Mart to the failure was inability to understand and respond to the South Korean consumer. Even tough Wal-Mart had a proven business model in countries which were influenced by American lifestyle, trying to apply the same model in South Korea instead of adapting to local requirements caused an end with failure. Analysis of key marketing decisions made by the firm reveals missteps in distribution, product mix, and promotion strategies that could not be overcome even by an advantage in pricing (Gandolfi & Strach, 2009).
Wal-Mart has experienced that world is not living in only American like lifestyle and every region has different customer behaviour. As a conclusion, internationalization is a serious process and companies must take actions in accordance with in-depth researchs of what local customers want and desire.