Final answer:
Walmart's failure in Germany can be attributed to inadequate adaptation of its strategies to the German market, including cultural misunderstandings and ineffective pricing strategies. The company could have succeeded by adopting a multi-domestic approach, adjusting business practices, and respecting local labor practices and supply chains.
Step-by-step explanation:
The failure of Walmart in Germany can be largely attributed to a mismatch between Walmart's strategies and the German retail market's unique characteristics. Key factors include a lack of understanding of the local culture, which was evident in the imposition of American business practices that didn't resonate with German customers and employees. Additionally, Walmart's strategy of aggressive price competition was less effective in a market where customers are already accustomed to discount chains offering low prices and where there is strong regulation on store closing hours and labor practices.
When exploring international strategies, companies have four basic options: international, global standardization, multi-domestic, and transnational strategies. Each strategy varies in terms of pressure for global integration and national responsiveness. Walmart seemed to lean towards a global standardization strategy, not adequately adjusting its business model for high national responsiveness to the German market's needs.
In hindsight, Walmart could have taken a more multi-domestic approach, which would have involved greater adaptation to local preferences and business practices. This might have included adjusting store layouts, product selections, and management styles to better align with German expectations. Understanding and integrating into the local supply chain, more respectful handling of the relationship with labor unions, and a less aggressive approach to competitor acquisition could have also benefited their operations in Germany.