Retail Internationalization:
Gaining Insights from the Wal-Mart Experience
in South Korea

Vol:10 No.1 / 2009


Franco Gandolfi
Regent University, USA
E-mail: fgandolfi@regent.edu
Phone: 1-757-352-4483

Pavel Štrach
Škoda Auto University, Czech Republic
E-mail: pavel.strach@skoda-auto.cz


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      Abstract

      Wal-Mart, the worldís 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-Martís failure in South Korea with the discussion centering on Wal-Martís inability to understand and respond to South Korean consumers. Wal-Martís 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

Pages: 187 - 199