Cross Cultural Issues, Walmart in South Korea
Wal-Marts venture into South Korea is yet another example of a company attempting to duplicate its strategies and business model unsuccessfully. Wal-Mart didn’t consider how the vast differences in culture could affect their survival and ultimately let their complacency, conservatism and conceit get in the way. Their continued losses forced them to withdraw their investment after failing to adapt to the environment, the culture and customer needs. Wal-Mart should have adjusted their leadership style to be able to transcend context as well as engage in cultural sensitivity by localising their business to suit consumer preferences. More knowledge of the environment and competition could have …show more content…
As seen from these differing dimensions the South Korean collectivist culture means that they value relationships and networks and Wal-Mart “were not aggressive enough in expanding their networks” (Sang Hun 2006). This dimension plays a key role in the success of business, as suppliers, distributors etc. may not do business with a company that they do not have established relationships with. In comparison, the US is a very individualistic culture and Wal-Mart were not used to doing business in this manner. A simple assessment of cultural dimensions would have illustrated the importance the South Koreans place on relationships.
Wal-Mart didn’t plan adequately to combat the economic risk they became subject to. They were slow in opening their stores, and were therefore unable to win more customers, and also unable to build the kind of market share needed to be able to press suppliers on pricing issues (Sang Hun 2006). A greater understanding of the environment and more sufficient strategic planning could have seen Wal-Mart become a more dominant player in the market; however their inadequate assessment as well as their complacency, conservatism, and conceit cost them money and the opportunity to penetrate and be successful in this country.
Wal-Mart should have gathered information and forecasted trends to assess the environment and its competitors. The