Essay Walmart China Issues

5060 Words Aug 24th, 2011 21 Pages
Walmart needs to adjust to the Chinese market, while leveraging its source of competitive advantage. This requires a delicate balance. At the US, the brand Walmart is associated with low price rather than quality. In China, where everyone is going for low prices and providing low quality to do so, Walmart’s own brand could be an assurance for low prices but with quality by making the Walmart name about more than just retailing. The suggested strategy in the 2008 Walmart supplier meetings shows that it’s heading in that direction (Business Week). This also follows Gome’s strategy of renaming its suppliers to their own brand (Business Week), but goes beyond it as the foreign brand in China is already associated with higher
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Following those characteristics it might be more relevant to focus on the shopping experience and salesperson fleet using aggressive promotion methods. A bigger number of smaller shops with a more of wet-market feeling (熱鬧) might be more to the local taste than the American style shops. (CCRRCA)
Last, the strong centralization that has helped the American Walmart seems to hold back Walmart in China. China is less homogeneous than America and that calls for decentralization, giving more power to local managers and their supplier-network or perhaps even moving to franchising in some of the more remote locations (“Bringing best practice to China”, The McKinsey Quarterly).
I find it fascinating that Carrefour made its first entry to Taiwan using the exact same slogan of "Low prices everyday" and has done exceptionally well. Some interesting comparisons to be made between the China and Taiwan market and the challenges of adjusting to the local consumer. Carrefour seems to have been playing both sides of the strait much better than Walmart (though not as successful in eastern Europe). Maybe more on that later.
Greenpeace sues Wal-Mart China over genetically modified rice
Wal-Mart China is under the Greenpeace gun over allegations that it sold GM rice in some Chinese stores
By Coco Liu 6 July, 2010

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