Seven epic fails by businesses that tried expanding into foreign markets

As Target’s recent withdraw from the Canadian market showed, sometimes a successful business can’t cut it in a foreign market. To Target, its guns-blazing, self-proclaimed gift from the heavens approach to Canada probably felt right. Unfortunately after less than two years of blunders, billions of dollars lost and another six years to go before profitability, the brand announced it was ending its foray into Canada, liquidating 133 stores and laying off more than 17,000 employees. Call it culture shock, call it poor timing, but either way, some business plays look rosy on paper but in practice fail to stick. Target isn’t the first company that saw immense success at home but got shunned abroad. In an effort to learn from the mistakes of others, we took a look at seven of the biggest foreign flops and the reasons why they failed to woo consumers elsewhere. Home Depot fails to inspire the DIY movement in China With the Chinese economy in the midst of a growth spurt and the housing market following suit, 2006 seemed liked a good year for U.S.-headquartered DIY giant Home Depot to dip its toes into the market. It was until they’d opened 12 stores that they realized the Chinese didn’t really like to do it themselves. Unlike the Western world where renovating your home is considered a bit of a hobby, developing countries have a tendency to see DIY as a sign of poverty. By 2012, Home Depot had shuttered its stores and taken a US$160 million after-tax hit in the process. File under, needs improvement. Walmart creeps out the Germans Like Home Depot, U.S. big box retailer Walmart failed to take into account cultural nuances – in particular personal space – when it opened up shop in Germany in 1997. The chain opened 85 stores in an attempt to tap into the frugal country’s lucrative discount department market. But with intricate labour laws, restricted business hours and rows upon rows of regulatory red tape, the market was harder to crack than the American retail giant anticipated. The icing on the cake – customers were a tad bit freaked out by Walmart greeters and their propensity to bag … Continue reading Seven epic fails by businesses that tried expanding into foreign markets