Supply chain integration in developing countries for foreign retailers in Korea: Wal-Mart experience

Abstract

Wal-Mart entered into the Korean market in 1997 after regulations governing foreign retailers were completely lifted. Since Wal-Mart began its retailing operations in Korea, it made every effort to incorporate the principles of supply chain integration in Korea. Currently, many supply chain integration attempts made in Korea have made some contributions to the development of the Korean distribution system, even though the results are not completely satisfactory. Two reasons might be cited. First, there is no noticeable competitive supply chain infrastructure in Korea to support the principles of supply chain integration. Highly competitive and aggressive supply chain strategies that Wal-Mart has been accustomed to using in the United States are directly in conflict with the existing distribution channels in Korea. Second, a relationship building process among supply chain partners (internal as well as external) has been painfully slow at best and in many instances non-existent. However, there is an opportunity in Korea for many foreign retailers to reduce the supply chain cost if it is properly implemented. This paper closely examines some of the reasons why the supply chain integration process for foreign retailers in Korea has been slow, and the attempts to provide possible solutions.