...Unit 6 Case Analysis Wal-Mart Stores: “Everyday Low Prices” in China GB520-14M Strategic Human Resource Management Introduction The following paper analyzes the Wal-Mart case study regarding the position of their stores in China. It also provides a thorough examination of the struggles faced by the organization to secure their position of their stores in China through an HRM perspective, as well as a set of recommendation. Wal-Mart’s strategies to retain and attract customers are based on a set of fundamental premises envisioned by its founder Sam Walton. These premises are: to provide excellent customer service to its clients, make every effort to attain excellence at all levels, and to always respect the individuals. To accomplish these goals Sam Walton established a rule for its organization, the 10 foot rule, in which every employee is expected to engage with every customer that they find within a 10 feet distance with the purposes of providing assistance with their purchases and provide the best possible customer service experience. The analysis of this case study attempts to point out and explain the challenges experience by Wal-Mart in China and to provide a series of possible recommendations for the organization to overcome such challenges. The goal is to provide them a series of strategies for the organization that will allow it to successfully compete in this market. Analysis of the Situation and Pending Decision Problem Wal-Mart’s founder strongly believed...
Words: 2764 - Pages: 12
...Business and Management GB520 Strategic Human Resources Wal-mart Stores: “Everyday Low Prices” in China Prepared by Keith Flores May 25, 2010 Professor Dr. Rebecca Herman Summary of the Case The Arkansas based company Wal-Mart had been attempting to gain a foothold in China since 1996 and has encountered a variety of problems in doing so. Initially, the company was hindered by Chinese business regulations which were saturated with layers of bureaucracy and forced the US retailer to go slowly. Meanwhile, its chief competitors were bending the rules to their advantage and making greater progress in establishing a secure foothold in the world’s largest consumer market. Wal-Mart was faced with logistical difficulties, regulatory hurdles, and an apparent need to adjust their business model to better fit the Chinese consumer culture. The result was a very challenging business environment that would put the retailer’s business model to the test. Major Issues One major issue that Wal-Mart faced was that of molding their domestic business model to fit the Chinese consumer culture. In the United States, Wal-Mart had seen great success by targeting smaller communities that were underserved by their chief competitors K-Mart and Woolworths. The basic format involved building a store in a rural location and then driving out competitors by making it impossible to compete with the retail giant’s exceedingly low prices. Once they had achieved dominance in a market, they would...
Words: 915 - Pages: 4
...Wal-Mart in China In the United States, Wal-Mart has become the leader of all retail stores and is the largest retailer than any other dominating the industry with stores in the international market. The company operates in 27 countries including Canada, and the United Kingdom (Farhoomand, & Wang, 2008; Wal-Mart, 2014). Wal-Mart was founded in Rogers, Arkansas by Sam Walton (Wal-Mart, 2014); and throughout the years it grew into a successful business. When Mr. Walton created Wal-Mart, he defined his business in three distinct objectives: individual respect, customer service, and strive for excellence (Hayden, et al., 2002). At that time, he utilized the “pricing philosophy” as one part of his corporate management strategy; this technique involved selling high quality, brand name products at the lowest price and has remained the same since Mr. Walton first opened the store (Farhoomand, & Wang, 2008; Hayden, et al., 2002, p. 16). Wal-Mart became a departmentalized, discount retail business and although the company launched its business in small-towns it expanded into larger cities (Farhoomand, & Wang, 2008; Hayden, et al., 2002). To accomplish his corporate aforementioned goals, Sam established two distinct rules; the first, the “Sundown Rule” in which an associate must logically provide an answer to a request or question from a customer or supplier within 24 hours (Hayden, et al., 2002, p. 16). Second, the “Ten Foot Rule” in which “an associate must greet, smile, and attend...
Words: 1469 - Pages: 6
...of Asia Strategy: Wal-Mart versus Carrefour Miao-Que Lin Fu Jen Catholic University, China. Wen-Kuei Liang Tatung University, China. Abstract Wal-Mart, the number one retailer in the world, persistently maintain three fundamental beliefs—respect everyone, total-solution service, and in search of highest quality—to shape their unique corporate culture. They insist lowest price every day, carry out total solution services, effectively control the cost of global logistics, fully leverage information technology to become e-company, powerfully motivate employees to work and share knowledge and adopt a play-safe strategy in internationalization. As for the number two player—Carrefour, they provide customers with one-stop shopping, lowest price, fresh products, self-served shopping in a hypermarket with free parking lots. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign markets faster and more flexible than their counterpart. This study investigates the configuration in Asia, marketing service, product procurement, logistics management, digitalization and human resource management of Wal-Mart and Carrefour. The authors then propose strategic implications for global retailers to increase their management effectiveness and efficiency. Introduction Wal-Mart founded by Sam Walton adopted circumventing strategy by starting her operations in small towns and then expanding to bigger cities. She maintains lowest price everyday and promises customer...
Words: 3853 - Pages: 16
...Overview In 1962, Sam Walton opened his first Wal-Mart store in Rogers, Arkansas, creating a low price approach to retail that soon became a model all of its stores would follow: "Sell brand merchandise at low prices.” Kmart and Target also started operations the same year. Sam Walton, founder of Wal-Mart, took advantage of the opportunity and established a discount retail company. In its beginning, the stores opened in small towns throughout the south, in areas where other large retailers did not even think to establish operations. Walton’s goal was to have an everyday low price discount store. Five years after opening business, Walton the need to expand before his competitors out ran him. During the 1970s, the retail industry became extremely competitive, and the economy became weak due to inflation. Sears was the leading retailer in the nation during the 1970s, however, the recession of 1974-1975 and inflation affected Sears negatively. While Sears targeted middle class families and expanded its overhead, Wal-Mart competed with its rivals and lowered overhead expenses. Wal-Mart has grown at an alarming rate since their inception and has proven to be a retailer of the future. It is currently the largest retailer in the world. It has the highest gross profits of any company in the world as well as the highest net profits. Wal-Mart has also topped the Fortune 500 4 times. Wal-Mart is using the following Corporate strategies; broadening our appeal to...
Words: 1081 - Pages: 5
...profits and overall net income of these multinational corporations. McDonalds, Exxon and Wal-Mart are among many global companies that have been able to increase their revenues by operating in international markets. Wal-Mart’s international ventures accounts for 20.1% of their total revenue which is estimated at $60 billion annually. The purpose of this paper is to select a company and discuss their business model. The company we will be looking at through out this paper is Wal-Mart. Wal-Mart’s slogan “Saving people money so they can live a better life” is what Wal-Mart’s business model is all about. Selling thousands of quality merchandise to low-income consumers at extremely low prices has been responsible for their success in the United States. Achieving success domestically is quite different from succeeding internationally. Doing business globally requires different business models. For a successful transition into the global environment, each business model must be designed to adhere to the preference or norms of each individual country. Both Wal-Mart and Ikea realized that success in the global market goes beyond offering low priced items when they moved into the global market. Its failure in Germany and South Korea made them realize that culture is a factor that must be considered when operating in international In this paper I will also look at some the factors affecting Wal-Mart and based on my opinion offer recommendations. Some of the factors that will be discussed...
Words: 2155 - Pages: 9
...Wal-Mart, 2005 At the start of 2005, Wal-Mart was up to nearly $260 billion in sales, managed over 5,000 stores in 10 different countries, and was an employer to over 1.5 million people worldwide- making it the largest supercenter, the largest company in the world. As of 1998, Wal-Mart began closing many of the original discount stores and opening supercenters in their place that provided “one-stop, round-the-clock family shopping,” with everyday low prices and convenient store hours. Supercenters doubled the size of the discount stores, employed over 200 and offered over 100,000 items (30,000 being grocery products). Some supercenters also consisted of specialty shops and others opened in urban areas as simply neighborhood markets offering limited drugs and groceries. Wal-Mart also continued to run the widely distributed warehouse clubs, SAM’S CLUBS, which directly competed with Costco and BJ’s Warehouse. By 2004, Wal-Mart maintained over 3,200 locations in the U.S., nearly 900 locations in the Americas (non U.S.), over 350 in Europe, and over 440 in Asia. Wal-Mart’s strategy began with the goal to provide customers with the goods they wanted when and where they wanted them. Wal-Mart then focused on developing cost structures that allowed it to offer low everyday pricing. This operational strength evolved from their strategic use of IT systems. These systems interchangeably shared information within stores, across stores, and with suppliers for forecasting, planning, replenishing...
Words: 1087 - Pages: 5
...Study: Wal-Mart Stores “Every Day Low Prices” In China Webster University INTB 5000 1 Webster University 2 Wal-Mart Stores “Every Day Low Prices” In China FACTS: First opened in Shenzhen on August 12, 1996 As of December 2007 94 stores in 51 cities Employs 43,000+ associates Serves around 5 million customers per week Transition from rural US to metro/urban in China Competitive analysis a core value of the company Shopping 1,500 items and price matching them through “Special Buy” Analysis Major pressure from the Chinese regional governments to centralize in high growth regions About-face by Chinese govt. on Shanghai is of interest Has major implications on Wal-Mart’s ability to provide infrastructure for stores Supply Chain Challenges Abound Tier 1 cities include Beijing – Tianjin, Shanghai, Guangzhou Tier 2 cities include Chengdu, Nanjing, Chongqing, & Wuhan Tier 3 cities include Changzho, Jinhua, Mianyang Webster University 3 Wal-Mart Stores “Every Day Low Prices” In China 7,058 Units 1.9 Million Associates 23 offices sourcing from 70 countries UK 340 Units Canada 292 Units Japan 393 Units US 4,103 Units Mexico 943 Units Central America 433 Units China 86 Units Trust-Mart 101 Units India JV –Aug 2007 Puerto Rico 54 Units Brazil 297 Units Argentina 16 Units Webster University 4 Wal-Mart Stores “Every Day Low Prices” In China Webster University 5 Wal-Mart Stores “Every Day Low Prices”...
Words: 1186 - Pages: 5
...case Sam Walton opened his first Wal-Mart store in 1962 in Rogers, Arkansas. He believed in the action of selling quality goods for low prices. Kmart and Target also started their operations around that time. Walton took advantage of the opportunity and established a discount retail company. Soon after opening his first store, he expanded into the south where not many other retailers would go. Walton strived to have a retail store that others would seek after for their continuing low prices. Just five years after opening the first Wal-Mart, Walton decided to expand quickly and strategically so that he could edge out his competition. In 1970s, the retail industry became extremely competitive, but in addition, the economy became weak because of inflation. Sears was the leading retailer in the nation during the 1970s, however, the recession of that time and inflation affected Sears negatively. While Sears appealed to the masses, Wal-Mart was able to keep its overhead low and continued to offer even lower prices. Wal-Mart has continued to only grow during their long tenure as a major retailer. Wal-Mart has proven to have a strong business strategy and is still the biggest retailer in the world. It has the highest gross profits of any company and the highest net profits. Wal-Mart has also topped the Fortune 500 4 times. Identification of the major issues surrounding the organization or individuals involved With the organization Wal-Mart has been very successful at establishing...
Words: 969 - Pages: 4
...Is Wal-Mart an evil empire? Wal-Mart is the largest retailer in the world, the biggest private-sector employer in North America, and one of the most dominant and influential corporations in the America. It has become one of America's most successful retail chains by offering everyday goods at low prices for working families, and despite all of its financial successes, the company can’t open a store without enduring -- and overcoming -- a flood of protest groups. These groups might defend the environment or local store owners, or they might defend the store’s future employees, since Wal-Mart’s reputation for unfair labor practices involves sexual discrimination, denying unionization and offering wages so terrible that some employees have to rely on social services to get by. Although Wal-Mart portrays an image of servitude and charity to the community, this multi-million corporation is responsible for inhumane, unjust and shameful practices in the United States and abroad, and whether people Love it or hate it, Wal-Mart is, in many places and for many people, inescapable. Much like work and taxes and eventual death. There is no question that Wal-Mart's relentless drive to squeeze out costs has benefited consumers, but Some experts contend Wal-Mart's "everyday low prices" are causing a clash between the interests of Americans as workers and the desires of Americans as consumers. "If people were only consumers, buying things at lower prices would be just good...
Words: 1785 - Pages: 8
...Wal-Mart's Foreign Expansion Strategy Wal-Mart the worlds' largest retailer has built its success on a strategy of everyday low prices, and highly efficient operations, logistics, and information systems that keep inventory to a minimum and ensures against both overstocking and understocking. The company employs some 2.1 million people, operates 4,200stores in the United Starts and 3,600 in the rest of the world, and generates sales of almost $400 billion (as of fiscal 2008). Approximately, $91 billion of these sales were generated in 15 nations outsides of the United States: Wal-Mart began its international expansion in the early 1990s when it entered Mexico teaming up with a joint venture Cifra, Mexico's largest retailer to open a series of supercentres that sell both groceries and general merchandise. Initially the retailer hit some headwinds in Mexico. It quickly discovered that shopping habits were different. Most people preferred to buy fresh produce at local stores particularly, items like meat, tortillas and pan dulce which did not keep well over night (many Mexicans lacked large refrigerators). Many consumers also lacked cars and did not buy in large volumes as customers in United States did. Wal-Mart adjusted its strategy to meet the local conditions, hiring local managers who understocking Mexican culture, letting meet those managers to control merchandising strategy, building smaller stores that people could walk to, and offering more fresh produce. At the same...
Words: 848 - Pages: 4
...Suggestions Walmart needs to adjust to the Chinese market, while leveraging its source of competitive advantage. This requires a delicate balance. At the US, the brand Walmart is associated with low price rather than quality. In China, where everyone is going for low prices and providing low quality to do so, Walmart’s own brand could be an assurance for low prices but with quality by making the Walmart name about more than just retailing. The suggested strategy in the 2008 Walmart supplier meetings shows that it’s heading in that direction (Business Week). This also follows Gome’s strategy of renaming its suppliers to their own brand (Business Week), but goes beyond it as the foreign brand in China is already associated with higher reliability and quality assurance. This actually holds true in China were retailers do a better job of enforcing supplier quality than the local regulations. With that, Walmart is still able to use its expertise and knowledge in supplier negotiation and distribution system to keep costs down. Although Walmart is a Joint-Venture, the sources do not mention any attempt to leverage the local partner to meet the local market, which seems the opposite to some other joint ventures discussed like Danone and Wahaha. Working together with the local partner to understand where and how the local regulations can be used or adjusted for Walmart’s success and gaining a stronger hold of the potential customer’s heart might help Walmart’s growth and dominance in...
Words: 5066 - Pages: 21
...1. Compare and contrast Wal-Mart’s efforts in Germany and South Korea with its operation in China? After more than a decade, Wal-Mart left Germany failing to become the popular “Everyday Low Prices” all in one shopping spot as it is in the U.S. Walmart has also failed abroad in other countries such as South Korea. There were only 16 stores in South Korea and was eventually sold out to a Korean discount chain, Shinsegae, for $882 million dollars. Reasons why Wal-Mart fails in these countries occur from the lack of strategic plan, other than the duplication of the U.S. strategy. The strategy of low prices, keen inventory control, and a huge selection of goods was not a success in German and Korean markets. The culture was also a factor that Wal-Mart needed to consider and alter their strategy before entering Germany and South Korea. For example, in Germany the company had American managers that like in the U.S. offer to bag groceries while Germans like to bag their own groceries. Also, the customer service was translated into being overly friendly with customers where smiling and greeting is not a norm in Germany. In addition, Wal-Mart never established relations with labor unions. In Korea, the racks were taller than that of competitors which raised a problem for people having to use ladders to reach items and the infrastructure also turned customers off with ceilings that showed pipes while their competitor E-Mart had decorated ceilings. Having failed to the tastes of South Korean...
Words: 1046 - Pages: 5
...Is Wal-Mart Good For America? Introduction We all want to do what is best for our families, our friends, ourselves and our country. However, our nation’s number one corporation is under constant ridicule for being a negative part of the American way. Wal-Mart is the overall number one on the fortune 500, over taking Exxon Mobile after a one year slip to the number 2 spot. However Wal-Mart is constantly being ridiculed by media and everyday citizens, its employees included. These opinions are often brought forth because of four major issues; the pay and benefits packages of Wal-Mart employees, the quality and buying of their goods from China, big box corporation killing local businesses ,and Wal-Mart taking jobs away and not creating new, stronger jobs .To answer each question I will use research from many different mediums, financial statements, and my personal experience as a three year Wal-Mart employee, and present facts and numbers that would be crucial in making an educated decision, following this information I will present what I believe is strong and weak about Wal-Marts current way of doing business, and then offer my solutions to answer these questions and answer the big question. Is Wal-Mart good or bad for America? Does Wal-Mart Treat Their Employees Right? As a Wal-Mart employee, I have gotten to see how things are ran, how we receive the goods, how they are taken to the floor, how it is stocked, and cleaned. I have been an overnight stocker at one of the...
Words: 6224 - Pages: 25
... 6 2) Financial Goals 6 d) Core Competency and Sustainable Competitive Advantage 6 VI. Situation Analysis 7 a) SWOT Analysis 7 b) Industry Analysis 7-8 c) Competitors 8 d) Company Analysis 8-9 e) Customer Analysis 9 VII. Market Product Focus 9 a) Marketing and Product Objectives 10-11 b) Target Markets 11 c) Points of Difference 11 d) Positioning 11-12 VIII. Marketing Program 12 a) Product Strategy 12 i. Product Line 12 ii. Unique Product Quality 12-13 iii. Packaging 13 b) Price Strategy 13 c) Promotion Strategy 13-14 d) Place (Distribution) Strategy 14 IX. Financial Data and Projections 14 a) Past Sales Revenues 14-15 b) Five-Year Projections 15-16 X. Organization 16-17 XI. Recommendation Plan 17 XII. Implementation Plan 17-21 XIII. Evaluation and Control 21 XIV. Conclusion 21-22 XV. Reference Page 23-24 III: Executive Summary This marketing plan aims at...
Words: 4175 - Pages: 17
