Walmart Case Study Essay

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WALMART CASE

1. What are some of Wal-Mart’s FSAs? To what extent are these FSAs location-bound or internationally transferable?
Wal-Mart’s FSAs, as mentioned in the case, are its ‘every day low price’ (EDL) philosophy and its so-called ‘exceptional service’. The every day low price philosophy is based on efficiency: efficient processes with suppliers and efficient distribution systems. Furthermore, Wal-Mart negotiates low prices with its suppliers and works with innovative technology. This FSA could be seen as internationally transferable. However, in this case it is only transferable to the point where this strategy was hindered by German rules and regulations. Because of German law, Wal-Mart Germany was unable to expand rapidly and thus …show more content…

First, there is cultural distance. German customers have different social norms. This is evident in the way German customers reacted to the ‘exceptional service’ provided by Wal-Mart Germany. As previously mentioned, they did not find this service friendly or helpful, but intimidating and even harassing. As exceptional service is one of Wal-Mart FSAs, the cultural distance certainly affected its exploitation. It was definitely not successful in German, while very successful in the US. Also, German consumers shopped based strictly on price and have different spending patterns than consumers in the United States. This means for example that German consumers shop in different stores to buy different products in order to get the best deal.

Furthermore, geographic distance was an issue. The distance between its two headquarters and the location of warehouses in Germany brought problems. There were only two warehouses that were nearly 500 kilometres away from Wal-Mart’s stores. Also the physical distance between the headquarters was too large to overcome. The distance between warehouses and stores and between the two headquarters made managing and coordination

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