II. Analysis of Wal-Mart USA Business Model
III. Formidable Times for Wal-Mart in Korea
IV. Korean Consumer Analysis in Discount Retail
V. Conclusion & Suggestions
Wal-Mart’s Standardization & Localization
(The reasons of success in US market and slump in Korean market comparing E-Mart)
Wal-Mart Incorporation is number one discount store globally, reporting the highest sales revenue in the world recorded at $282 billion. It is known very well for its Every Day Low Price (EDLP) strategy, which attracted significant number of customers to its stores. One of the reasons of their success in US market is Standardization. They are much focusing on the Economy of Scale by mass purchasing, transportation system, sales promotion strategy and so on.
In addition to its domestic operations, Wal-Mart has been expanding internationally and is growing briskly in terms of sales amount and store numbers. However, there are few countries where Wal-Mart Inc. is not performing well such as Germany, China, South Korea and Brazil. South Korea is also one country Wal-Mart Inc. have been showing poor performance since it began operations in 1997 by acquiring discount store named Macro.
After the 1997 financial crisis in South Korea, Korean economy did see a fundamental change in consumer shopping behavior and retail format. So-called discount stores began to replace department stores and small/medium neighborhood stores. Eight years have passed and now, some of the competitors such as E-Mart have established well in the retail market while others such as Wal-Mart are still suffering. Then, there is the case on Samsung-Tesco and Home-plus that recently began and is a close follower of E-Mart. They are showing better performance compare to Wal-Mart Korea. It is very interesting case that the dinosaur of retail chain stores is showing lowest performance in South Korea which is only 1/100 size of U.S.
What prevents Wal-Mart Korea from transferring their business model in Korea? How serious is the problem? Do these problems have solutions? We can find the reasons of performance difference from the viewpoint of Standardization and Localization.
1. Cheol Su Choi, CheongJu Graduate Uni. / The Study for the affection to the Customer satisfaction and the preference by the Standard Choice of Customers in Large Discount Store
2. Seong Eun Kim, JeonBuk Business Graduate Uni./ The Study for the Store Choice of the Customers ; Focus on comparing with the Discount Store and Department Store
3. Se Eun Jang, Sukmyeng Women’s Graduate Uni./ The Study for the relation between Retailer Image and PB products evaluation
4. Kang hee Seo, Kukmin Tecno-Design Graduate Uni./ The Study for the process of the product planning in PB clothing in Korean Discount Store
5. Distribution Survey In Korean ChainStore/ The important factor when visiting the discount store
6. Research of AC Nilson / The change of Korean shopping trend
7. Research of AC Nilson / The market share of PB in the world
8. dart.fss.or.kr: Shinsegae
9. www.walmart.com: 2004 Consolidated Financial Report
10.Bradley, S.P., Mark, K.A., & Ghemawat P. (2004): Wal-Ma
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