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Case Title:

Wal-Mart’s China Experience

Publication Year : 2005

Authors: Amy Sonpal, Dr. A.V Vedpuriswar

Industry: Retailing

Region:China

Case Code: MES0026A

Teaching Note: Available

Structured Assignment: Available

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Abstract:

Wal-Mart evolved as the retailing giant of the world in the 21st century. The strategy of “Every Day Low Price” has been its core competence in beating the competition. It grew at a consistently higher rate through out its existence, until in mid 1990s, when it faced growth crises. Wal- Mart decided to look for newer markets and Wal-Mart International division evolved. Today it operates in ten countries including United States.

In 1996, it entered China, which was becoming the powerhouse of Asia. The strategic partnership between China and Wal-Mart created a gamut of opportunity for growth for China as well as for Wal-Mart.

The case talks about the localisation strategy of Wal-Mart by penetrating in China and adapting to its local culture. The issues faced by Wal-Mart related to the Distribution, Unions, Technology and Financial systems in China, and how it worked to convert these hurdles into opportunities. China opened its retailing industry for foreign investors fully in December 2004. Even after nine years of existence in the China market, among foreign retail chains Wal-Mart ranked second and in domesticmarket it did not even rank amongst the top ten. The experts have predicted that the Chinese middle class who drives the retailing market is going to expand to 400 to 500 million people by 2015. In order to capture this massive market potential Wal-Martis gearing up to understand and adapt to Chinese market.

Pedagogical Objectives:

  • To discuss and understand the international expansion strategies
  • To understand retail industry structure of China
  • To discuss the entry strategies to China
  • To analyse the operating strategies and growth strategies followed by Wal-Mart in China
  • To understand the ‘globalisation’ strategy and its impact in Chinese market
  • To discuss the issues like cultural adaptation, localisation and operating in a fragmented retail market.

Keywords : Penetration Strategy; Globalisation; Market Entry Strategies Case Study; Out Sourcing; Retailing; Supply Chain Management; Distribution; Localisation; Cultural Adaptation; Globalisation

Contents : 
Introduction
Retail in China
Chinese Market Demographics
Growing Chinese Middle Class
Wal-Mart’s China Experience
Logistics Management
Regionalism and Supply chain management
Building Financial Logistics
Store Count of Wal-Mart’s International Operation

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