Retail internationalization: gaining insights from the Wal-Mart experience in South Korea

Franco Gandolfi () and Pavel Strach ()
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Franco Gandolfi: Regent University, USA
Pavel Strach: Skoda Auto University, Czech Republic

REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, 2009, vol. 10, issue 1, 187-199

Abstract: Wal-Mart, the world’s largest retailer, failed to capture the hearts of South Korean consumers, ultimately withdrawing in 2006 after eight years in the market. Although, it had achieved stunning successes in the U.S. and overseas, Wal-Mart was unable to apply its proven U.S. business model in South Korea. Wal-Mart is only one among several retailers that have underestimated the role of conducting cultural due diligence prior to entry into a foreign country. This paper analyzes the causes and antecedents of Wal-Mart’s failure in South Korea with the discussion centering on Wal-Mart’s inability to understand and respond to South Korean consumers. Wal-Mart’s failure demonstrates how firms fail to alter their business practices to the idiosyncrasies of a foreign culture. The primary managerial implication is that the local culture determines the business model.

Keywords: retail internationalization; Wal-Mart; South Korea; research case study. (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rom:rmcimn:v:10:y:2009:i:1:p:187-199

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