China 's Annual Business Climate

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:

As the world’s largest retail store in the world, Walmart wants to be in every market that they can be prosperous in. They know they rule the United States market, so why not try to expand overseas and dominate those markets as well. Now that they have reached limits on expansion here in the U.S., the next step was to test the water in other nations. As they began to go international, there were many critics saying they will never make it because their business practices and culture wouldn’t work in other countries. Yet the company’s globalization efforts progressed at a rapid pace. Its more than 4,263 international retail units employ more than 660,000

Within less than 30 years, Wal-Mart had transformed from a small rural retailer in Arkansas into the largest retailer in the U.S. In order to continue this rapid growth, the company had started to pursue international expansion grounded in the belief that the firm’s business model of offering quality products at low prices and great customer service would appeal to consumers everywhere around the world (p.8)[1]. China was of particular interest in going international as Wal-Mart’s top management held the opinion that it was the only market in which the firm’s success story in the U.S. could be repeated (p.2/8). However, in 2005 (nine years after its

Inventory from China is now reaching 18 billion dollars, and has increased 20 percent over the past two years. Currently over 5,000 suppliers have steady alliances with Wal-Mart. Not only does this benefit U.S. customers by keeping prices down, but it keeps the Wal-Mart corp. very well received by the Chinese people. A large portion of the world's population is located in China being a respected company in this part of the world will greatly increase sales. Wal-Mart is, however, responsible for 10 percent of the countries trade deficit to China.

3) Do those same sources of cost advantage enable Walmart to achieve a sustainable competitive advantage in China? With a localized demand, localized supply base, and localized distribution in China also provided domestic stores with an edge in establishing a strong regional dominance when foreign retailers found it hard to leverage national presence in a regional market. In China, however, the constraints on a foreign retailers operation directly limited the regional expansion of Walmart stores and the efficient use of distribution centers since they were so spread out. Would have to spend more on distribution costs and given the slow speed of transportation did not enable Walmart to lower its prices. Walmart also faced a problem with lack of an information technology network with suppliers, making purchasing and distribution difficult. Also, consumers in China were very different than those back home, which added pressure to the operational costs and directly threatened its ability to set the price low as possible. People in China did not buy in bulk and that is what Walmart specialized in, so shopping patterns did not fit. Diminished economies of scale and interrupted supply chain meant higher costs in satisfying Chinese consumers. Everything that Walmart thrived in and was able to do to cut costs, they

Wal-Marts venture into South Korea is yet another example of a company attempting to duplicate its strategies and business model unsuccessfully. Wal-Mart didn’t consider how the vast differences in culture could affect their survival and ultimately let their complacency, conservatism and conceit get in the way. Their continued losses forced them to withdraw their investment after failing to adapt to the environment, the culture and customer needs. Wal-Mart should have adjusted their leadership style to be able to transcend context as well as engage in cultural sensitivity by localising their business to suit consumer preferences. More knowledge of the environment and competition could have

Ans:Wal-Mart,Inc runs a chain of large, discount department stores.it is the world’s largest public corporation by revenue. Walmart is the largest private employer and the largest grocery retailer in the United States. Walmart is one of the best known industries all over the world. Its concentration of a single business strategy is the basis of its success over the decades by this strategy without having to rely upon diversification to sustain its growth and competitive advantage. The leading marketing strategies of Wal-Mart are low prices, service and smile. However by adapting this strategy, it has risked itself by putting all of a company’s egg in one industry basket. While its global strategy worked elsewhere, the results were bad in Germany and Korea that Wal-Mart withdrew from those countries.

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

China is becoming more westernised, particularly the ‘cosmopolitan’ city of Shanghai, where demand for Western products is increasing rapidly as disposable income rises in line with China’s strong economic growth. Michel’s wanted to establish a foothold in the market at an early stage to demonstrate a long-term commitment, which has been identified as essential to compete successfully in the Shanghai market (per Tim Harcourt, Austrade Chief Economist).

Fock, H K. Y. and Woo. K.S. (1998). The China Market: Strategic Implications of Guanxi. Business Strategy Review, 9(3):

The Alibaba group has thrived in the Chinese e-commerce sector from its inception in 1998. They currently account for over 70% of online shopping in China and delivered annual revenues of $636 million in the 12month period ending June 2009 (case p1-2). Alibaba’s successes are due to multiple factors that have allowed them to create corporate advantage, and thus establish market leadership in China (Case p1). The configuration and coordination of Alibaba’s

WalMart's approach to global expansion exemplifies the journey of self-discovery many corporations who have a stable, profitable domestic base of operations go through as they attempt to enter new markets globally. For WalMart this meant confronting the exceptionally high level of ethnocentrism in their organization while also using their analytics-based prowess to better understand cultures, not just costs and profits (Ming-Ling, Donegan, Ganon, Kan, 2011). The intent of this analysis is to define how WalMart overcame a significant series of challenges and successfully launched into China, overcoming an ethnocentric mindset and tendency to rely too much on analytics alone in guiding global expansion.

Whenever a company is entering a new market it has to take into consideration the cultural differences between countries. Based on the case study analysis, the difference between the two countries in terms of eating out habits and eating preferences seem not to be understood by the Denver headquarter. Denver headquarter believes that it can enforce the same business model applied in the U.S to its stores in China, regardless of local preference. In addition, Foster seems to lack knowledge about the Chinese culture because she was not familiar with the market in China, as she had no experience working internationally. There was a lack of cross-cultural communication between Chen and Foster; even though, Chen had experienced both cultures while studying abroad in the U.S.

Luxury product sales boost in the emerging marketing like China, which has extraordinary growth and strong potential consumers for the development of luxury goods in the China market. With gradually lower and lower increase of revenue in the European countries, Louis Vuitton (abridged as LV in the following sections) commits itself to set up more stores in China. However, LV is faced with the problems of declining profits in China, which urges it to adjust its entry strategy into the China market. In this case, this report will focus on distinguishing the factors that influence LV’s development in China and