The impact of Wal-Mart's entry into the German and UK grocery markets
Wal-Mart is the world's largest retailer with sales of $285.3 billion in 2004-2005; 20% of these sales are generated from international markets and it is two of these markets, Germany and the UK, that are the focus of the paper. The paper charts the entry of Wal-Mart into Europe within the context of increased competition in international markets among the “elite” group of transnational corporations which have the capability of disrupting the structure of foreign markets which they enter. Using a mixture of primary and secondary data sources, the purpose of the paper is to evaluate the success or otherwise of the implementation of the “Wal-Mart way” of doing business in Germany and the UK and to assess its impact on both markets. The results show that the German acquisitions have not been particularly successful because of the problems in integrating two disparate chains with different organizational cultures and a heterogeneous portfolio of stores. The highly competitive German grocery market has precluded Wal-Mart from realizing a key element of its global strategy-Every Day Low Prices (EDLP). Discounters, especially Aldi, are the price leaders in Germany. By contrast, the Asda acquisition in the UK has been much more successful. Asda was a good strategic fit for Wal-Mart and had already embraced aspects of the Wal-Martian retail proposition and corporate culture prior to the acquisition in 1999. The entry of Wal-Mart has led to a restructuring of the UK grocery market with low prices and value for money becoming key store choice attributes for UK consumers. [EconLit citations: F010, F230, L810]. Â© 2006 Wiley Periodicals, Inc. Agribusiness 22: 247-266, 2006.
Volume (Year): 22 (2006)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Capps, Oral, Jr. & Griffin, James M., 1998. "Effect Of A Mass Merchandiser On Traditional Food Retailers," Journal of Food Distribution Research, Food Distribution Research Society, vol. 29(1), February.
- Shawna O'Grady & Henry W Lane, 1996. "The Psychic Distance Paradox," Journal of International Business Studies, Palgrave Macmillan, vol. 27(2), pages 309-333, June.
- Jody Evans & Felix T Mavondo, 2002. "Psychic Distance and Organizational Performance: An Empirical Examination of International Retailing Operations," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 515-532, September.
When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:22:y:2006:i:2:p:247-266. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.