Mattel made an unsuccessful attempt to sell Barbie in China where the dolls were thought too frivolous. Photo: Patrick Quinn-Graham Mattel made an unsuccessful attempt to sell Barbie in China where the dolls were thought too frivolous. Photo: Patrick Quinn-Graham

When a company fails internationally, the thud is heard round the world. A spectacular failure might take the shape of a genuine disaster, as in the case of BP’s oil spill in the Gulf of Mexico in 2010, or a cultural disaster, like marketing frivolous toys to serious Chinese girls and boys. Either way, the fallout can leave a company red-faced for years.

Whether it’s bad marketing, sloppy operations, ill-advised corporate behavior or mere obliviousness to local culture, screw-ups happen. We asked Peter Cohan, co-author of Export Now: Five Keys to Entering New Markets, his co-author Frank Lavin and Robert E. Mittelstaedt Jr., dean of the W. P. Carey School of Business at Arizona State University and author of Will Your Next Mistake Be Fatal? what can be learned from some of the most embarrassing international venture flameouts.

In Part One, the top five overseas blunders were: Nestle in Africa (aggressive marketing of baby formula), BP in the Gulf of Mexico (oil spill, weak standards), SNC Lavalin in Libya (wrong friends), Walmart in Germany (wrong market) and Home Depot in China (not a DIY market)

Following are five more overseas flameouts to round out our top 10, and what international business can learn from them:

6. Mattel in China

In March 2009, the U.S. toy company opened a 36,000-square-foot Barbie store on Shanghai’s flashy Huaihai Road. Two years later, they shuttered the place and scaled back their efforts to sell Barbie in China. The skinny plastic doll was seen as too frivolous a pastime for Chinese kids. “Chinese parents, more than American parents, emphasize education. Toys can be seen as an indulgence,” says Lavin. That’s especially important considering Chinese families usually have only one child. “You’ll do anything for your child to succeed,” says Mittelstaedt. Disney, for example, has found success in China by tying its playful entertainment brand to a chain of English Learning Centers — kids aren’t just playing with Mickey Mouse, they’re learning new skills with him. If only Barbie could give MBA instruction.

7. Best Buy in the United Kingdom

Four years into a $1.1-billion joint venture with the U.K.’s Carphone Warehouse, U.S. electronics retailer Best Buy pulled the plug on the overseas operation, closing all 11 outlets. Part of the problem was cultural: Big box retail is not as widely accepted on the other side of the Atlantic. “Some things that work in the largest economy in the world don’t work in smaller economies,” says Mittelstaedt. “You can’t scale down the same way.” But Best Buy’s timing was also badly judged. The margin in electronics is growing thinner and thinner. Even major manufacturers like Sony, Sharp and Panasonic are in trouble. So much of the electronics retail business has moved online that consumers around the world use big box stores as mere “showrooms” for online rivals. “Best Buy has tried to compete with their own online presence and with a loyalty program, but then you see the inconsistent pricing. It’s confusing,” says Mittelstaedt.

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