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

Author

Listed:
  • Franco GANDOLFI

    (Regent University, USA)

  • Pavel STRACH

    (Skoda Auto University, Czech Republic)

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.

Suggested Citation

  • Franco GANDOLFI & Pavel STRACH, 2009. "Retail internationalization: gaining insights from the Wal-Mart experience in South Korea," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(1), pages 187-199, March.
    • Handle: RePEc:rom:rmcimn:v:10:y:2009:i:1:p:187-199
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    File URL: https://www.rmci.ase.ro/no10vol1/Vol10_No1_Article17.pdf
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    Citations

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    Cited by:

    1. Alexey Bereznoy, 2018. "Innovative Business Models In The Strategic Adaptation Of Multinationals To Emerging Economy Environment," HSE Working papers WP BRP 85/STI/2018, National Research University Higher School of Economics.

    More about this item

    Keywords

    retail internationalization; Wal-Mart; South Korea; research case study.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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