...Successful Globalization Into The Chinese Market Stanley Armstrong Southern New Hampshire University Abstract There has been an increasing enthrallment over global expansion across the globe. Likewise, there are many things that factor into making such an enormous decision a successful one. Some of these factors include, the strategies to which the business will use, what modes of entry they will take, and what are possible threats and opportunities that may arise. Choosing the right strategy to enter into a new market is key in determining the success of the company now and in the future. I. Introduction “Walmart Stores, Inc. was founded by American retail legend Mr. Sam Walton in Arkansas in 1962. Over nearly 50 years of development, the company has served customers and is now the world’s largest private employer and retailer, on the top of the Fortune 500 list. Walmart is among the most recognized global brands.” (Walmart China Factsheet) II. Global Expansion Lately, many large companies within the retail division who seek to increase their profits and hold a greater market share have decided to expand their companies globally. Global expansion has grown to the point where its not only attacking large companies, but has increased the efforts of those small-scale companies, those who are foreign to expanding internationally, and even those who have already ventured into international markets. There have been many up and...
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...Case study analysis: "Walmart's Strategies in China" Introduction: Wal-Mart Stores, Inc. (NYSE: WMT), branded as Walmart, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's third largest public corporation, according to the Fortune Global 500 list in 2012, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Walmart. It is also one of the world's most valuable companies. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America. Walmart has 8,500 stores in 15 countries, under 55 different names. The company operates under the Walmart name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America...
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...Tablet of Contents The Beginning of Walmart Logistic………………………………………………………… 3 Magic of the stripes………………………………………………………………………………. 3 Walmart’s Cross Docking……………………………………………………………………….. 5 Downfall of Barcode System…………………………………………………………………… 6 Power to the RIFD………………………………………………………………………………….. 7 Walmart’s RFID Influence in China………………………………………………………….. 9 The Chinese RFID investment…………………………………………………………………. 10 Chinese market potential………………………………………………………………………… 11 Conclusion………………………………………………………………………………………………. 12 The Beginning of Walmart Logistic Wal-Mart as we all know it, it is an American multination corporation that operation in a largest chain discount stores in the world. Sam Walton, the successful business man from Arkansas began his retail store in 1940, worked at J.C. Penney and later on started a small retail chain store called “Ben Franklin”. It wasn’t till 1962; Mr. Walton opened the first Walmart store. In the beginning, Walton had his strategy set to low income families and offered a considerably lower cost than his competitors, the low price strategy allowed Walton to steer forward with his real goal to become the supply chain logistics giant. By 1987, Walton have led the store into a growing rampage, Walmart had 1,198 nationwide, sales in the 15.9 billion and had 200,000 associates (Walmart, http://walmartstores.com/aboutus/7603.aspx, 2011), In the same year the company also became the largest private satellite net work in the country and...
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...Compare and contrast the strategies of Carrefour and Walmart in the Chinese market Although the whole world has been affected by global recession, China’s economy still grows in a rapid rate compared with other countries’. Furthermore, the expansion of China’s retail market has attracted world’s largest retailers, Walmart and Carrefour, to pile in. The expansion strategies of the two global retailers seem to play a crucial role in the competition in China. Thus both similarities and differences of strategies are worth considering and will be respectively analyzed in the essay. One of the most significant similarities of Walmart and Carrefour’s strategies is that both of them learn about the diversity of regions and customers. Ed Chan, the Walmart China’s CEO, pointed out that not only income level, but also customer preferences were affected by the regional diversity (McKinsey Quarterly, 2009). It suggests that from coastal area to inland regions, the economy is less developed and the income level is accordingly lower. As a result, customer preferences vary from the eastern to the western part of China (McKinsey Quarterly, 2009). Similarly, Carrefour treats coastal and inland customers respectively to adapt to region differences in China. For instance, live fish is displayed to customers in fresh area but frozen fish is sold to people in vast regions according to the diversity of their preferences (Child, 2006). Another similarity is that in addition to coastal cities...
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...Walmart's history is one of the best examples of innovation, leadership and success. Walmart was founded by Sam Walton in 1962; it was incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world’s largest and the most emulated retailer. Some researchers refer to Walmart 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. Walmart operates in each store, from the products it stocks in the warehouse, to the front-end that helps speed checkout. Walmart’s philosophy: provide everyday low prices and superior customer service worked the best. Lower prices also eliminated the expense of frequent sales promotions and sales are more predictable. Walmart has invested heavily in its cross-docking inventory system. Cross docking has enabled Walmart to achieve economies of scale which reduce its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to stock them. This allows Walmart to refill the shelves 4 times faster than its competitors. Walmart controls its buying power through purchasing in bulks and distributing the goods on time. Walmart guarantees everyday low prices and considers them the one stop shop. Walmart operates in Mexico as Walmex, in the UK as ASDA abbreviation of Asquith and Dairies...
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...global presence to insure the success of an organization in meeting its goals and mission Walmart achieved great success with their “Every Day Low Prices” strategy. Through supplier negotiations, Walmart has enjoyed high profits resulting in their ability to maintain low operational costs and it turn, pass that savings on to their customers. While the company’s success was largely attributed to Walmart’s ability to maintain low prices and provide exceptional customer service, they also depended on their revolutionary internal distribution process (Farhoomand, 2006). At the time of their opening in Shenzhen, the biggest challenge Walmart faces were the 700 chain store companies that were already operating in China. Until 2005 when China officially lifted distribution restrictions for foreign companies, Walmart had been forced to rely on Chinese suppliers to outfit their stores. Brief analysis Walmart’s US supply chain includes their own distribution warehouses that are strategically located within a one-day drive of the stores it served, a Walmart-owned trucking fleet that was solely responsible for the physical distribution of inventory, and a robust information technology system that allowed both suppliers and wholesale customers to purchase, invoice and pay for good electronically. Chinese consumers are also very different from the American customer-base Walmart had been used to. Chinese consumers had less money to spend and spent less if they did shop. They also had a tendency...
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...Carrefour vs Walmart Kelly Liu stared out from her office window at the traffic on Shanghai’s Yannan “gao jia” as she wondered what to do. Kelly was the head of business development for Walmart China and had a key meeting at the end of the week with her Board of Directors. After 8 years in China, Walmart was still well behind Carrefour in terms of number of stores, brand awareness and revenue. The Board had called a special meeting and asked Kelly to present Walmart’s new growth strategy. She pondered what plan to suggest. Overview In 2006, France-based Carrefour Group (Carrefour), the second largest retailer in the world, successfully completed eleven years of its operations in China. As of September 2006, Carrefour operated in China through its 80 hypermarkets. China was Carrefour's sixth largest market, with sales of over US$2.06 billion in 2005. Carrefour Comes to China As one of the first foreign companies to enter the Chinese retail industry, Carrefour played a major role in bringing about a retail revolution in the country. It leveraged its experience in the international markets and introduced a few of its global best practices into the Chinese market. Until the 1980s, the retail industry in China was fully controlled by the Government. The department stores run by the Government provided little in the way of conveniences. According to Wang Zhirong, General Manager of Tian Bai department store in Dalian, concepts like customer service and choice were...
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...Background 3 II. Case Analysis 3 1. Detail the growth of Walmart and its international experience. 3 2. Describe the growth strategies of Massmart in the African Continent. 5 3. Detail Walmart’s acquisition of Massmart and expected strategic advantages.5 4. Analyses the challenges Walmart have to face in the African Continent. 6 5. What happened to Walmart’s operations after taking 51% share in Massmart in 2011? 7 References 2 I. Introduction I. 1 Company Background Walmart Stores, Inc., is an American multinational retail corporation that operates a chain of discount department stores and warehouse stores. Headquartered in Bentonville, Arkansas, United States, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. (Winston-Salem Journal, 2010) From the humble beginnings as a small discount retailer in Rogers, Ark., Walmart has opened thousands of stores in the United States and expanded internationally. Through the model of business global expansion, which brings the right store formats to the communities that need them, Walmart are creating opportunities and bringing value to customers and communities around the globe. Today, Walmart operates over 11,000 retail units under 65 banners in 28 countries. Employ 2.2 million associates around the world –1.3 million in the U.S. alone. (Walmart Store Inc., 2015). II. Case Analysis - Walmart’s Expansion in Africa:...
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...Managing Employees Wal-Mart Organizational Issues Instructor: Dr. Mitra Asif Student Name: Phunsuk Wangdu Submitted on: July 7, 2015 Wal-Mart Organizational Issues and Situation Analysis Phunsuk Wangdu Index Introduction 3 OB issues and situation analysis 3 Conclusions 7 References 8 Appendices 12 Introduction Wal-Mart stores Inc. is the world’s largest retailer with reported gross earnings of 460 billion U.S. dollars for 2014. It has 4,281 stores in the United States and over 11,100 stores worldwide. Wal-Mart hires more workers than any company in the whole world; in 27 different nations around the world it has hired over 2.2 million workers. The interest on Wal-Mart stems from their ability to provide products to its customers at relatively low prices, earning them a competitive advantage over other retailers, since their products sell five times more than other American stores. However this has involved both positive and negative effects on the long term. These sales at low prices to customers have been achieved as a result of their low cost imports and high integration with foreign suppliers from various countries around the world especially China. Due to the high volume of imports a large number of small businesses have been destroyed together with jobs in the manufacturing industry; the US economy has been affected by an increased trade deficit and the local manufacturing sector has also been affected by this growth. Moreover, Wal-Mart...
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...that several changes in the macro environment have had an effect on the profitability of individual firms and industries. The text states that downturns in economic activity forced all the fast-food companies to develop new strategies. During this economic downturn McDonald’s was one company in particular that has developed strategies that were influenced by microeconomic changes. A great example is when McDonald’s entered the Chinese market they had to take into consideration consumer taste and acceptance in China. They had to decided whether or not to have the menu in Chinese or English and whether or not to take on the American menu or add more Chinese influenced menu items. Cost also played a part in the China market. Beef was much more expensive and so therefore could only reach a certain percentage of the people. Half of McDonald’s sales in China had been of chicken product with beef only making up 35 percent . 2. Compare and contrast McDonald’s strategies in China with those in Walmart in Mexico. Walmart competitive strategies: Walmart changed its...
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...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...
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...Assignment 5 Valerie Lagana Strayer University Eco550 – Economics for Managers September 5, 2011 Question: Describe the changing economic variables in China that influenced McDonald’s expansion strategies. The main changing economic variables in China that influenced McDonald’s Expansion were the increase in GDP and the economic stimulus package. In 2007, the increase in GDP showed a level of strong jobs in China as well as increase income for the Chinese (Farnham, 2010). This allowed the Chinese to spend more money on eating out at restaurants which gave McDonald’s a great opportunity for expansion. In addition, the Chinese government had a stimulus package after the economy dropped in 2008. The stimulus package included building more highways which allowed the Chinese to be accessible to the drive through window opportunity that McDonalds was able to offer as part of their expansion. Question: What factors led to the Mexican currency crisis and peso devaluation in 1994? The factors that led to the Mexican currency crisis and peso devaluation were the Appreciation of the exchange rate, falling interest rates, and the foreign savings. The appreciation of the exchange rate resulted in a decrease in savings with an increase in investment due to the expansion of credit without any federal regulations (Farnham, 2010). The falling interest rates were a result of the appreciation of the exchange rate attracting private capital via privatization of banks and...
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...Management Across Cultures 1 March 2015 Abstract Walmart is one of the world’s largest and most well-known retailers in the world today. It has achieved great success in areas like Mexico and Canada; however it has also seen failures in other areas like Germany and Hong Kong. This paper will discuss a brief history of Walmart’s global expansions and the strategies it chose to enter these markets. It will answer the following specific questions: When did Walmart enter the global expansion? What international markets did Walmart enter? What cultural challenges has Walmart faced? How did Walmart overcome these challenges? Where future expansions and opportunities are possible? To answer these questions, this paper will have four basic sections: A brief history of Walmart’s global expansion, what was their strategy with each expansion, cultural differences they faced, and where is Walmart going in the future. This paper will attempt to examine the strategies of its global expansion and how it used the challenges to continue success in future expansions. Walmart is the most well-known and largest retailer in the world today; with sales worth more than $200 billion, $35 billion of that from Walmart’s International Division. The company grew incredibly fast both in the United States and abroad. By tweaking entry modes, and studying the cultural differences and local threats, the core business strategies Walmart chose to build its business on in America would...
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...customer bases, it is important to have strategic business units in areas local to the customer base. It is what is required to successfully build a successful global presence. This analysis will attempt to highlight potential issues faced by Walmart when they opened up for business in China in 1996. This analysis will also provide a set of recommendations that may have helped to avert the issues that Wal-Mart faced. Background Wal-Mart Stores, Inc. started when Sam Walton set out on an ambitious mission to have a store with the lowest prices anytime, anywhere. In 1962 Sam Walton opened the very first Wal-Mart in Rogers, Arkansas. By 1967, they owned 24 stores and continued to rapid expanding. In 1983, they added to their portfolio by starting a wholesale/bulk retailer called “Sam’s Club” and by 1988, they started a hybrid of general merchandise stores and supermarkets and aptly called them “Super Centers.” In 1990 Wal-Mart became USA’s number-one retailer. In 1991, Wal-Mart opened its first global store in Mexico City, Mexico. In 1994, it rapidly expanded throughout Canada by purchasing of 100 Woolco stores and converting them to the Wal-mart brand. In 1996, Wal-Mart aspired to be the first retailer to open up a chain of stores in China (Walmart) but was facing a lot of resistance; and that’s where this case focuses on. Summary In essence,...
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...WALMART SUCCESS IN MEXICO, CANADA AND CHINA: GLOBAL EXPANSION, STRATEGIES, ENTRY MODES, THREATS AND OPPORTUNITIES Lee Yee Mun B1000922 Help College Of Arts and Technology Bachelor of Science in Collaboration with Southern New Hampshire University, USA lemon_0611@hotmail.com Rashad Yazdanifard Faculty of Management, Multimedia University, Cyberjaya, Malaysia. rashadyazdanifard@yahoo.com 1 ABSTRACT Global expansion has been gaining a lot of attention. There are many important factors to be considered in the decision-making process such as business strategies, entry modes, and threats and opportunities in the markets. Appropriate strategies will minimize the risk of failure in international markets. The right business strategies and entry modes employed will increase the firm’s chances of success and influence the future of the retailer. Key words: global expansion, business strategies, entry modes, threats, opportunities, Walmart 1. Introduction The internalization of the retail industry has been researched widely, and majority of these studies have described the motivations and scales for international expansion by retailers (Akehurst & Alexander, 1995; Williams, 1992). Many models of internalization explains the sequence of foreign expansion, showing that companies who go international will do better in foreign markets that are similar to their domestic markets. This was why Walmart chose to enter the markets of Canada and Mexico (Johanson...
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