Walmart in China

Topics: Wal-Mart, Discount store, Retailing Pages: 13 (4792 words) Published: November 17, 2010
How to win Chinese consumers: Competetive strategy of Wal-Mart in China ATIONAL AND INTERNATIONAL GOVERNANCE CHALLENGES
1. Jayalakshmi Gopalkrishnan, Faculty, Asian School Of Business Management, Siksha Vihar,Chandaka,Bhubaneswar,India. jaya_gopalkrishnan2006@yahoo.co.in,9777627771 2. D.Ramalingam, Faculty, Department of Computing, Middle East College of Information Technology, Muscat, Sultanate of Oman. 3.Dr. V.K.Gupta,Professor, Indian Institute of Management,Indore,India 4. R.K Verma,Associate Professor, Asian School of Business management, Siksha Vihar,Chandaka,Bhubaneswar, India.

ow to win Chinese Consumers: Competetive strategy of Wal-Mart in China Founded by Sam Walton, the first Wal-Mart store opened in Rogers, Arkansas, in 1962. Seventeen years later, annual sales topped $1 billion. By the end of January 2002, WalMart Stores, Inc. (Wal-Mart), was the world’s largest retailer, with $218 billion in sales.Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. Each week, about 100 million customers visited a Wal-Mart store somewhere in the world. By 2004, Wal-Mart, the world's largest company operated discount stores, neighborhood stores, hypermarkets (Wal-Mart Super centers) and membership warehouses (Sam's Club). In the 1990s Wal-Mart started to expand abroad. It entered China in 1996, Korea in 1997, and Japan in 2002. In China, Wal-Mart operated and aggressively expanded its retail business in partnerships, joint venture partners and suppliers. In Japan, Wal-Mart invested in 2002 in Seiyu, a prominent Japanese retailing chain. In Asia Wal-Mart is engaged in tough competition with other global and domestic retailers. The author’s intention of writing this case study is to explore into the complexities of Wal-Mart’s Chinese venture. China poses a huge challenge for Walmart as there exist cross cultural diversities among the Chinese population.Walmarts needs to understand the Chinese market first and then think of a business model that can fit the country.

Thus the case aims to explore into the (1) competitive strategy of Walmart in China and (2) understand the adaptability of its business model to international environments. We are collecting data from secondary sources and resorting to some focus groups and about 7-8 in-depth interviews with Industry experts to understand the situation in a better way. The objective of taking up this research work is to comprehend the strategic challenges that the world number one Retailer Walmart faces whenever it attempts to enter international markets so that it can leverage on the untapped potential. Thus China is a very lucrative destination for any retailer in the world due to its huge growing population. Thus our study revolves around Wal-Mart’s competitive strategy in China and how it is adopting its business model in China.

Basic History Overview Wal-Mart's history is one of innovation, leadership and success. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world's largest - and arguably, the most emulated - retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. Founded by Sam Walton, the first Wal-Mart store opened in Rogers, Arkansas, in 1962. Seventeen years later, annual sales topped $1 billion. By the end of January 2002, WalMart Stores, Inc. (Wal-Mart), was the world’s largest retailer, with $218 billion in sales.Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. Each week, about 100 million customers visited a Wal-Mart store somewhere in the world. By 2004, Wal-Mart, the world's largest company operated discount stores, neighbourhood stores, hypermarkets (Wal-Mart Supercenters) and membership warehouses (Sam's Club). In the 1990s Wal-Mart started to expand abroad. It entered China in 1996, Korea...

References: "Ready for warfare in the aisles – Retailing in China”. The Economist, August 5, 2006. "Outsmarting Wal-Mart”, Darrell K. Rigby and Dan Haas, Harvard Business Review, December 2004.
"GOME is tops in China”, Business Week, September 10, 2008 "Wal-Mart’s new sustainability mandate in China”, Business Week, October 28, 2008. "What’s new with the Chinese consumer”, Ian St-Maurice, Claudia SussmuthDickerhoff and Hsinhsin Tsai, The McKinsey Quarterly, October 2008 . "Food Retail Formats In Asia – Understanding Format Success”, A study for the Cocacola Retailing Research Council Asia. www.walmart.com
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