Walmart Success in China?

The location of the first Wal-Mart in the Fortune Global 500 for the year of 2001 to 2002 turnover of 219.81 billion dollars. Wal-Mart is the largest company in the retail in the world. The company was much larger than its competitors in the United States - Sears Roebuck, Kmart, JC Penney and Nordstrom combined. In 2002, Wal-Mart operates more than 3,500 discount stores, Supercenters and Sam's Clubs in United States and over 1,170 stores in major countries around the world. The company also sells products online via the website, www.walmart.com. Wal-Mart is one of the largest private employers in the world, with the use of force about 1.28 million. The

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

nearly $260 billion in sales, managed over 5,000 stores in 10 countries, and employed over 1.5 million

There was a marked improvement in China’s economy. To further increase and attract foreign investment, the Chinese government increased its numbers of experimental, special economic-zoned cities in which foreigners could operate a business. There were, however, restrictions set forward by the government. One restriction in 1996 was that all foreign businesses would have to be in a joint venture or other type of cooperative agreement with at least one Chinese partner, with that Chinese partner getting a stake greater than 51%. In August 1995, Wal-Mart, the great American retail chain and Middle America success story, arrived in China, establishing a joint venture with Shenzhen International Fiduciary Investment Co, Ltd, China. In the following year, 1996, Wal-Mart opened its first supercentre and a Sam’s Club, its members-only big-box store, in the special economic zone of Shenzhen, in the southernmost Guangdong Province. However, it took the Chinese government’s removal of further trade restrictions for foreign retailers in 2004 for Wal-Mart to kick-start its expansion plans. Three years later, in 2007, Wal-Mart acquired a 35% stake in Trust-Mart, a Taiwanese-owned chain of retail supercentres operating in the Middle Kingdom. By 5 August 2010, Wal-Mart’s presence in China grew to 189 units in 101 Chinese cities, with the creation of over 50,000 local jobs. By early 2012, Wal-Mart nearly doubled its

Wal-Mart’s expansion in China had been hindered and slowed down by regulatory restrictions for a long time. Thus, international retailers were limited to certain cities, in which not more than three stores were allowed. Additionally, each new store needed the approval of the central government. Furthermore, enforcement of local interest such as tax revenues or jobs and local protectionism by local governmental agencies handicapped Wal-Mart’s expansion in China. As a result, the retailer had only 43 stores in China by early 2005 (p.12-14).

SUPPLY CHAIN MANAGEMENT: Effective supply chain management is one of the most important operational strategies that allow company to enjoy sustainable competitive advantage. More than the manufacturing expenses the distribution costs are high. If a retail firm has a proper supply chain management it can cut down the cost and have a competitive advantage of providing goods at lower cost. The cross docking concept that was introduced by the Wal-Mart was one of effective concept.

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.

Many people may ask the same question. “Is Wal-Mart good for the economy?” or even “What are Wal-Mart’s standards for suppliers?” Wal-Mart currently has over 4,000 stores in the United Stated and about over 3,000 internationally. As many people may know, Wal-Mart is the largest retailer in the world. In the year of 2004 Wal-Mart had accounted for 6.5 percent of the retail sales. The wellbeing and prosperity of specialists over their production network is the Mindful Sourcing bunch 's top need, which may be the reason Wal-Mart suppliers are contractually needed to sign their “Benchmarks for Suppliers” before they can even be endorsed to deliver stock available to be purchased at Wal-Mart. These Norms for Suppliers make clear their essential desires for suppliers and processing plants in regards to the treatment of laborers and effect on nature. Suppliers are as well needed to show the “Norms for Suppliers” in the nearby dialect in all industrial facilities where items have been made for them, so specialists know the desires of suppliers and plant administration. In this case, many citizens may believe that Wal-Mart may be both good and bad for America in many different ways. This store has been the cost of many people losing their jobs, but it has also helped keep the United States inflation down. Although Wal-Mart does help create many jobs for people, it does not pay them at

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-Mart is now the largest grocer, largest retailer, largest corporation in the world. "If Wal-Mart was a nation, it would have a bigger economy than 80 percent of the world's countries"(Singer and Mason). About "138 million people go to one of Wal-Mart's 5,000 stores in the United States and nine other countries", and purchase more than $300 billion every year (Singer and Mason). With a 1.6 million global workforce, Wal-Mart has become the biggest private employer "in the United States, as well as in Mexico and Canada"(Singer and Mason). "Wal-Mart already has 11 percent of all U.S. Grocery store sales," and "by 2013 that figure is likely to rise to 21 percent"(Singer and

1971 to over 800 stores located in 46 states and Puerto Rico. This industry is

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.

A. Wal-Mart realized through third party studies and internal research that the Chinese customer were significantly more cost-sensitive than those in other countries and that there existed a strong, established culture of frequently shopping around to find the absolute lowest prices. Through these studies, Wal-Mart also realized that customer satisfaction level greatly influenced customer loyalty in China. The greatest determinant of this satisfaction was made up of perceived value. The perceived value is composed of three sub factors: (1) Product price, (2) Relative price and (3) Promotion. The other factors for customer satisfaction in descending order of its importance are Image,

Today, 8,747 stores and club locations in 15 countries employ 2.1 million associates, serving more than 176 million customers a year. Our history is a perfect example of how to manage growth without losing sight of your values. Our most basic value has always been, and always will be, customer service.

The retail industry has been through much change in China with the proposition to change the retail structure with new legislation. Recent economic conditions have resulted in increasing sales in the overall industry. The experience of western retail approach was accepted by creating of variety of types of stores. WuMart was the first brand on the market, which had opened the large stores that catered to all customer needs.