Retreat from South Korea (Monday, May 22, 2006)
(...) [Wal-Mart] just announced it was selling off its money-losing 16-outlet South Korean subsidiary. (...)
French chain Carrefour, the #2 retailer in the world, announced last month that it would sell its 32-outlet Korean subsidiary to another Korean retailer, E.Land Corp for $1.8 billion. (...)
The withdrawal of the two companies indicates several things:
- Globalization, however powerful, is not inevitable.
- Adjusting to distinct cultural preferences can still be a problem for global firms. (Wal-Mart is having similar problems in Japan.)
- On the other hand, a comnpany like Tesco can get it right in Korea while others fail.
- Successful companies retreat when prospects seem hopeless, to concentrate their effort elsewhere (for Wal-Mart and Carrefour in the far bigger and more friendly environment of China).
Wal-Mart retreats again (Monday, July 31, 2006)
Explanations for the German failure are many. First, had real, smart competition (especially Aldi) who knew how to discount as well as , if not better than, Wal-Mart. Second, some of Wal-Mart’s US practices did not make sense in Germany, especially the forlorn attempt to turn German workers into smiling store greeters. Third, it couldn’t deal with the strong German unions, something it keeps clear of, by dint of energetic counter-measures, its US operations.
Strong German unions? I don't think that the German unions are that strong these days. But the laws backing them are, though. And concerning unions and the "more friendly environment" in China, there are interesting news:
Wal-Mart allows first union shop in China (The Australian, via CDT, which has more links on this issue)
US retail giant Wal-Mart conceded at the weekend to the establishment of its first ever trade union -- in China's southern Fujian province. (...)
The BBC lede:
Chinese 'create Wal-Mart union'
US retail giant Wal-Mart, which has drawn criticism over allegations it is union unfriendly, has reportedly seen staff in China start their first union.
Sounds like out of the German frying pan into the Chinese fire to me. And Chinese workers aren't iconic for unopposed accepting a company's decision. Ask Siemens.