There are a number of key factors that need to be considered when doing a research of a business location more so in the international markets. These key factors include legal framework, industry specifity, startup friendly environment and the political setting. Any business needs to overcome the administrative hurdles of a given country because legal matters can slow down a business operation or lead to additional cost (Henry, 2008). Legal issues include licensing, environmental regulations and employment of people. It is also advisable to start up a business in a region where there are supportive initiatives and entrepreneurial activities (Henry, 2008).
This creates a friendly environment where an investor can gain more skills through educational workshops. Political situation of a country directly influences the future legal frameworks and environmental development of a given country. A country can also support innovation in order to attract more investors by launching favorable initiatives. Through industry specificity, some major towns and cities have attracted both the local and international investors from very specific industries, which has led to innovation or cluster hotspots (Henry, 2008). Setting a business in an innovation hub usually benefits the business in many ways which include value chain partnership, knowledge sourcing, information gathering, and investments and advisory (Henry, 2008).
Yes, I feel that Wal-Mart made a big mistake by choosing to set its business in South Korea and Germany. This is because they did not take time to research the two markets thus leading to its failure like in the case of South Korea. In the first place, Wal-Mart implemented the American way of marking that turned out to be incompatible with the Korean markets where the Koreans had a significantly different tastes and preferences as compared to the American consumers (Brunn, 2006). Additionally, its stores were not strategically positioned to establish sufficient customer traffic. Its Everyday Low Price Strategy was also not considered to have value by the Korean consumers. Lastly, its competitive advantage of low price and low cost was not did not add any value in the Korean consumption and competition context (Brunn, 2006). On the other hand, the German legal framework can be attributed to the failure of Wal-Mart in Germany. This is because Germany had limited price regulation, where retailers were not allowed to sell below the standard costs. It also had limited store hours and oddest zoning requirements (Hitt et al. 2007).
In order to improve its business success in the international markets like those in Germany and South Korea, Wal-Mart marketing department out to have carried out a proper research of these markets to learn about legal frameworks, political situation, taste and preferences, and its major competitors. Knowing about taste and preference would have provided them with a different business approach that would have seen them serve dishes that were relevant with the region’s population. Knowledge about legal frameworks would have made them design a proper working operations in order to establish the peak hours to create consumer traffic and make more sales.
Taste and preferences of a given people, for example, the Koreans, are particularly determined by the people’s culture and religion. Wal-Mart, in order to attract a bigger market in South Korea, ought to have performed a thorough research on the culture and religion of the Koreans especially those that are related to serving dishes (Samli, 2013). For instance, the Koreans believe in the freshness of food products and this makes them make several trips to stores that serve such food. In contrary, Americans believe in buying bulk food and stuffing them in the fridge for future use. Therefore, Wal-Mark could have considered preparing small but enough amount of food that would serve its clients on a daily basis with no leftovers.
