Wal-Mart in China

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Case Details:

Case Code : BSTA015
Case Length : 12 Pages
Period : 1996 - 2004
Organization : Wal-Mart
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Retail Merchandise

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Before Wal-Mart entered China in 1996, the country had looked a difficult place to do business. English was hardly spoken. China had been isolated from the West for so long. But as China opened itself to the rest of the world in the late 1970s and early 1980s, things began to change.

In the early 1990s, when Rob Walton, joined by the company's real-estate personnel visited China, they realized Wal-Mart's format of trying to lower the cost of living for its customers made a lot of sense in China...

Building the Culture

After entering China, Wal-Mart faced a major challenge in integrating Wal-Mart's values and expectations into employees used to working for state-run enterprises, where permanent employment was the norm and responsibilities were limited. State-run enterprises in China also offered little training and few incentives to employees who did well in their jobs...

The Road Ahead

As 2005 got under way, Wal-Mart continued to face various challenges in China. Wal-Mart and other foreign retailers had to offer a 35% stake in each store to a Chinese joint venture partner and were restricted to a territory of approximately 40 cities each. After December 2004, as part of China's admission to the WTO, the government would allow foreign retailers to own their own stores outright in any city they chose, provided they could arrange government building permits. With clearer rules and freedom, Wal-Mart might acquire existing retail outlets to scale up fast...

Exhibits

Exhibit 1: Two Categories of Wal-Mart in China Supercenter
Exhibit 2: Financial Highlights
Exhibit 3: The Wal-Mart Culture: Three Basic Beliefs
Exhibit 4: International Store Count
Exhibit 5: Financial Highlights

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