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Gaining Insights from the Wal-Mart Experience in South Korea

In: Business and Management

Submitted By alekdee
Words 489
Pages 2
There are many reasons why Wal-Mart‟s business model failed in South Korea, such as
Consumer preferences and culture, Location, and Marketing arrogance all contributed to what one economist referred to as a failure. But under these basic economic decisions were a host of basic cross-cultural mistakes that fuelled the company’s poor strategic planning.

1. Consumer preferences and culture
Most individuals believe that Wal-Mart failed to understand South Korean’s consumer preferences. Wal-Mart had relied on its proven business model and its strategy in offering low prices for products. However, low prices alone were insufficient to make a successful business case in South Korea. South Koreans have different consumer preferences than Americans do; they are not necessarily interested in the same products. For instance, South Koreans like fresh vegetables and fresh food rather than dry products and the type of clothing that Wal-Mart sells. The South Korean culture is also very tied into its markets; they are one of the largest countries that are deeply involved in local markets.
2. Location
Most Wal-Mart outlets in South Korea were placed outside instead of in the cities. South Koreans expect easy accessibility to shopping facilities within the larger cities without the need to travel. Also, South Korean consumers shop more frequently than most Americans do. They may not purchase many things at once, but they will usually get at least one item. Some individuals felt that Wal-Mart should have been located in the center of the cities where consumers felt more comfortable with their shopping needs. South Koreans do not distinguish between discounts and normal prices. Thus, they may not see a compelling reason to shop at Wal-Mart.
3. Marketing
South Korean marketing professional observed, “Wal-Mart put off South Korean
Consumers by sticking to Western marketing…...

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