Essay about Swot Analysis of Wal-Mart in China

1779 Words Nov 27th, 2011 8 Pages
Wal-Mart in China
October 31, 2011

The team is playing the role of management consultants in the case study of Wal-Mart stores in China. The team decided that a SWOT analysis was the best approach to the case in the beginning stages of the project. The SWOT analysis was designed as a tool that identifies the strengths, weaknesses, opportunities and threats of an organization. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve
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The army of employees that are loyal is strength.
There are several different weaknesses for Wal-Mart in China, one is that China’s highway system is nowhere near as sophisticated as the United States or Japan (Farhoomand, 2006). This causes there to be much more time involved in moving supplies from the port to the distribution center and then to the stores. Additionally, Farhoomand states that the current highway system is extremely expensive due to a lot of tolls and other fines imposed by the smaller towns (2006). Wal-Mart hoped to use their strategy of “Every day low prices” in China as well and that has backfired because of the high costs to operate, transportation fees, taxes, and small amount that consumers purchase. Also, in the rural areas the income levels make it almost impossible for the consumers to purchase items at Wal-Mart.
Initially the Chinese Government was the root of most of the issues facing Wal-Mart however; the current problem is the small, local governments that impose their own rules. Due to satellite restrictions, Wal-Mart is not able to network into their operating system and supply chain systems. This causes issues in replenishing stock as most orders have to be handled by fax instead of electronic data interchange. Sam Walton hoped that through stock options and profit sharing that their employees would be happy and not mind if they were not paid top dollar. This strategy works in the United States however, in China they are

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