Problem:
Your company is considering plans to purchase an interest in drug store chains in Germany and the UK. But before senior managers are prepared to consider the investment, they would like to look at how other American companies have fared when buying European retail chains.
In December 1997, Wal-Mart took over 21 Wertkauf stores in Germany followed by 74 Interspar stores in 1998. In the U.K. Wal-Mart has purchased ASDA, a supermarket/discount chain that now advertises itself as "part of the WalMart family."
Investigate the recent FDI by WalMart into the United Kingdom and Germany. Gather press releases, articles in the business press, and search the Library and the Internet for published sources of information.
Describe why Wal-Mart undertook the investment, why the British and German governments allowed it, and the extent of its success or failure.
Identify the types of management decisions that needed to be made.
Identify any political or cultural problems that have occurred.
Would it have been better for Wal-Mart to build a subsidiary "from the ground up" rather than buying existing chains? If so, why didn't Wal-Mart pursue this option?