Walmart's Experience in China

Published: 2021-06-29 06:56:28
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Category: Business

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Abstract: Being the biggest successful retail giant in the world, Wal-Mart has prepared to irradiate worldwide. After setting foot in North America, South America, Europe and Asian, the situation turned out to be not as satisfactory as expected. China is the ideal field for Wal-Mart to conquer.
Nevertheless, due to the profound differences in culture, politics, administration, geography and economics, things in China are going to be tough. To achieve this goal, Wal-Mart needs to adjust strategies in a series of aspects according to the actual setting of Chinese market

Summary of Key Issues and Recommendations
 China is a huge market for retailers with large population base, unserved booming needs, many domestic suppliers. However, in the meantime, the country, the market, customer behaviors, social economy structure and so on differ in enormously.
 Wal-Mart's sophisticated operation model that works perfectly in north and south American has met waterloo in German and been struggling in Japan and South Korean.
 Nine years after first entry in 1996, Wal-Mart's sales in China ranked only twentieth in the list of all chain stores and reported loss so far.
 Wal-Mart needs to design another business model which matches the specific Chinese environment instead of simply duplicated everything from the US.
 Wal-Mart is required to maintain a balance between operating globally and act locally.

Analysis
From an ordinary retailer started to the largest retailer in the world, people marvel at Wal-Mart's growth and success. The root cause of this victory is that Sam Walton understands the American market and environment so well that he can design business strategies that meet the tastes of Americans and avoid head-on competitions with existing big players. Wal-Mart has built a set of competitive advantages which enable itself survive and grow.

"Every Day Low Price" is probably the first thing that jumps out when people think of Wal-Mart. Only to keep the price low is a challenging task, let alone to maintain the level every day. To realize its promise, Wal-Mart was brave enough to build the store in small towns instead of busy but expensive downtowns. Although at the first glance, it went against the principle that stores should be close to its targeted customer group. But it turned out to be a smart decision because establishing in small towns could avoid head-on competition with strong big competitors, keep away new entries by saturating the small regions and cut expenses on space renting.

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