...Background "China is the one place on the world where you could replicate Wal-Mart's success in the U.S." Davis Glass former CEO of Wal-Mart Stores said. However, reality indicates that Wal-Mart is facing many difficulties in Asia. Wal-Mart and other foreign organizations are subject to a number of adverse situations and government restrictions. Some of those difficulties are: rigorous cost control in comparison to local companies, toll fees and charges, high transportation and distribution costs and lack of IT reliable infrastructure among others. In addition, domestic stores have existed for long and enjoy support from the government. Many foreign chains exist in the market, and were performing better than Wal-Mart. As a result, Wal-Mart expansion in China was slow. In this case, we will address the main issues that Wal-Mart China is facing and propose possible solutions and recommendations. Issues/Problems Currently, Wal-Mart is facing a range of challenges in China's retail market. Chinese business environment is changing rapidly. In the last two decades, China’s retail industry and its distribution and logistical infrastructure have significantly decreased government regulation. Wal-Mart will need to identify what issues it will face in the short and long term to set up the new business vision and strategy in this market. The U.S business model will not be able to be implemented in the Chinese market since for instance U.S., Wal-Mart places stores...
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...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” In China China Sales In billion...
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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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...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...
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...Walmart- China 1. Customers patronize Wal-Mart China stores because they have low prices which are a great asset to china’s consumers who are more cost sensitive than other countries. Although, China’s consumers like to go to store after store to find the cheapest price, and of course Wal-Mart contains those low prices. Wal-Mart also established through studies and research that China’s customers valued great customer satisfaction which in return they displayed their loyalty by coming back over and over. Therefore, making some consumers skeptical to shift to Wal-Mart. Sustainability means everything to customers in China because like mentioned before consumers are loyal to the companies in which they have previously interacted with. Consumers in China become return customers if you have to sustain the great service expected from the customers. China’s consumers are not to kind on change, but as long as you provide the best service possible over and over they will continue to comeback. 2. Wal-Mart also has to consider sustainability when deciding their vendors. In order for Wal-Mart to be as successful as they are, they have to have top of the line products from top of the line vendors. Therefore, reliability is a must. As mentioned in the case, there were complications between Wal-Mart and the vendors specifically when it came to the Return to Vendors Programs. There was no control over the time the vendors had to collect the products that were unusable or destroyed which was...
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...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 coming retailers who have been successful with moving their business...
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...Walmart China firmly believes in local sourcing. We have established partnerships with nearly 20,000 suppliers in China. More than 95 percent of the merchandise in our stores in China is sourced locally. In addition, Walmart is committed to local talent development and diversity, especially the cultivation and full utilization of female staff and executives. Ninety nine percent of Walmart China associates are Chinese nationals. All our stores in China are managed by local Chinese. Furthermore and more than 60 percent of Walmart China associates are female and about 40 percent of those are at management level. In 2009, the company established the “Walmart China Women’s Leadership Development Commission” for driving women’s career development. Following themes recently emphasized in the Chinese government’s 12th Five Year Plan, we have created programs that support domestic consumption, boost rural economic development, create economic opportunities to raise employment, strengthen food safety systems and promote sustainability across our business. For example, beginning in the 2011 spring season, vegetable farmers in many area of China, including Henan, Shanxi, Guangdong, Zhejiang and Liaoning, have suffered from unsellable vegetables. To answer the call of the Ministry of Commerce and local governments to help this situation, Walmart signed a proposal in Beijing to help farmers sell excess vegetables through our direct farm program. The company has been purchasing...
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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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...Context: 1. Introduction 2 2. Background of Wal-Mart stores Inc. 3 3. Retail organization internatinalization expension 4 4. International Expansion of Wal-Mart in Maxico,china and canada 5 5. Comparison of Entry Modes 6 6. comparison of Opportunities 7 7. Final touch 8 8. Conclusion 9 9.Bibliography 10 1. Introduction: Being present and having to enter foreign markets is for many companies natural, while for other it is a new challenge that they have to face. This challenge, known as market entry, consists of three major decisions: where to enter, when to enter and how to enter different markets. Some companies are forced to internationalize in the early stages of their life due to small saturated home markets, while other companies choose to go abroad because of the great opportunities new markets might bring (Peng, 2006). Once deciding to go abroad and choosing the target market and timing, companies' need to consider the choice of entry modes. Generally, to choose international firm there are six different entry modes: exporting, turnkey projects, licensing, franchising, joint ventures, wholly owned subsidiary (Hill, 2004). Each entry mode its distinctive characteristics (see, e.g., Hill, 2004; Hill, et al, 1990; Hill and kim, 1988; Anderson and Gatignon, 1986; Madhok, 1997; Brouthers and Brouthers, 2000; Bishop 2006. Selecting a suitable entry mode is a difficult decision for firms interested in entering a foreign market (Agarwal and Ramaswami, 1992). Sometimes...
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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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...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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...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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...February 8, 2015 Is Walmart good for America? Most everyone loves Walmart’s low prices. Walmart Super Centers are great for one stop shopping. A place that offers low prices must be a great place right? Maybe it isn’t such a great place. Low prices come at a cost to America. I do not think that Walmart good for America. Walmart purchases a lot of products from China, which furthers America’s trade deficit. Walmart contributes to the downfall of American manufacturers. Walmart also encourages businesses to take manufacturing overseas. Walmart imports an extreme amount of products from China. China’s prices are cheaper. The low cost of labor in China makes their products cheaper than American products. Chinese products allows Walmart to sell the products to consumers for a low cost. Walmart rakes in the profits because of the large mark-up they use. The United States currently has a major trade deficit. The trade deficit hurts our economy. We are buying more products from other countries than we are selling to them. Manufactures have to go to Walmart headquarters to negotiate prices. If Walmart disagrees with the terms, the manufactures lose them as clients. Rubbermaid once made and sold products to Walmart. The price of resin increased, and Rubbermaid had to increase their prices. Walmart refused to take the price increase. They stopped carrying Rubbermaid products. Rubbermaid was hurt drastically by Walmart’s decision. They later went out of business. If Walmart had took the price...
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...Title: WalMart Specific Purpose: To persuade my audience not to support WalMart. Central Idea: The super-giant retailer WalMart has a negative impact upon many aspects of society, both local and worldwide, and as a result the American people should not support WalMart. Audience: How many people shop at Walmart? Introduction "Always Low Prices" is the famous pledge of WalMart, the retail-giant that features 180,000-foot "Super-Centers that sell everything from tires to groceries to live goldfish. In reality though WalMart's pledge should be "Always Low Prices, Always Low Wages, Always Low Morals, AlwaysLow Ethics"! WalMartis a behemoth corporation that "hauls off a stunning $220 Billion a year from its customers, resulting in a net profit of over 7 billion dollars a year for the company (Hightower 1). The famous blue vests of "associates" and the smiling yellow Dot that promises those low prices are not only common symbols in the United States, but also in nine foreign countries around the world. The super-giant retailer WalMart has a negative impact on many aspects of society, both local and worldwide, and as a result the American people should not support WalMart. Let's begin by looking at the problem of WalMart being a negative force. Body A. When WalMart builds a store in a town, it decimates the economy of the town and forces small-businesses out of business. According to Paul Kurtz's article, "The Decline of small business," when WalMart, "invades...
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...Walmart’s International – Selected Key Markets Walmart started expanding internationally in the early 1990s, starting with opening a Sam’s Club in Mexico City in 1991. This was followed by purchasing 122 Woolco stores in Canada. In 1994, Walmart opened it’s first store in China. In 1999, Walmart entered U.K with the acquisition of ASDA. In 2000, Walmart opened internationally in a virtual sense – by launching Walmart.com In 2002, Walmart entered Japan through its investment in Seiyu. In 2007, Walmart added another aspect of its international expansion in the virtual world – a “Site to Store” service on Walmart.com which allowed make a purchase online and pick it up from a store. In 2009, Walmart entered Chile, by acquiring a majority stake in D&S S.A. In 2010, “Bharti Walmart” a joint venture between Walmart and Bharti – opened its’ first store in India. In 2011, Walmart acquired MassMart in South Africa. Present – Walmart owns over 10,857 stores. Of these, 6,194 stores are outside the United States (in 27 countries). Asian countries where Walmart exists – China, Japan, and India, South Korea, Thailand, Taiwan and Malaysia. (Need to double-check this.) Walmart’s regional headquarters for the Asia-Pacific region is Hong Kong. Do they do anything different overseas? Like do they not do groceries overseas? Wal-Mart has built differentiated business departments to serve different market segments. They included supermarket (1,294 stores in 2001), one-stop shopping...
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