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Wal Mart in China
Assessing WalMart's Success in China:
Lessons Learned in Global Expansion
WalMart Corporation (NYSE:WMT) continues to experience profitable growth in China despite the numerous cultural, legal and political barriers and constraints it had to face and overcome to achieve this. Today China is consistently one of the most profitable, promising growth markets for WalMart (WalMart Investor Relations, 2013). The initiatives, strategies and tactics undertaken to accomplish this over the last seventeen years is the basis of this analysis.
Analysis Of WalMart's Growth in China
Unlike the failures in South Korea and Germany, where WalMart relied on a very ethnocentric-based strategy of defining supplier networks, devising pricing strategies, and developing stores that were identical to their U.S.> operations, in China WalMart took an entirely different approach (Ming-Ling, Donegan, Ganon, Kan, 2011). Starting with the Chinese government at the regional and national level, WalMart executives were very clear about the need for sharing vast amounts of data...
As China has traditionally been extremely paranoid about data being sent outside their nation, WalMart executives chose this area to focus on first realizing it would make or break their success in the communist-run nation (Taylor, 2003). After approximately eighteen months of building a Chinese-specific supply chain, creating unique storefronts that aligned with how Chinese consumers preferred to buy, and developing entirely new checkout lane approaches that would save time with unique, one-of-a-kind items only found in Chinese WalMart stores, WalMart invited in Chinese government officials to show they how the uploads of sales data worked (WalMart Investor Relations, 2013). The Chinese government was concerned about the potential for WalMart to act as a front for CIA spying (WalMart Investor Relations, 2013). Yet when the actual Electronic Data Interchange (EDI) command codes were shown to the Chinese officials, they realized it was basically a series of transaction sets and WalMart was approved to deliver daily uploads of their sales data. WalMart has overcome this…
References
Ming-Ling, C., Donegan, J.J., Ganon, M.W. & Kan, W. 2011, "Walmart and Carrefour experiences in China: resolving the structural paradox," Cross Cultural Management, vol. 18, no. 4, pp. 443-463.
Porter, M.E. 1986, "Changing Patterns of International Competition," California management review, vol. 28, no. 2, pp. 9-9.
Taylor, R. 2003, "China's Consumer Revolution: Distribution Reform, Foreign Investment and the Impact of the WTO," Asian Business & Management, vol. 2, no. 2, pp. 187-187.
WalMart Investor Relations, 2013. Investor Relations. Retrieved May 8, 2013, from Wal-Mart Investor Relations and Filings with the SEC:
http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-estimates
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