World’s Largest Retailer in the World’s Most Populous Country: Wal-Mart in China




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

ABSTRACT

The case discusses the strategy adjustments made by the world’s largest retailer, Wal-Mart, while operating in the world’s most populous country, China. US-based Wal-Mart started operating in China in 1996 but managed to expand to only 415 stores by 2015. The retailer, like many other international players, faced problems in China and lost the trust of Chinese consumers. Wal-Mart’s globally successful policy of Every Day Low Prices failed in this market. Moreover, the retailer had to tackle fierce competition from local retailers, and was involved in various scandals which further tarnished its reputation. Following these hurdles, it became difficult for Wal-Mart to sustain and expand its revenues in the country... ...

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Issues

The case is structured to achieve the following teaching objectives:

  • To recognize the challenges faced by Wal-Mart in China, an international market for the retailer. Discuss various factors which led to tarnishing Wal-Mart’s reputation in China.
  • To analyze the role of consumers’ preferences and choices in deciding any retailer’s strategy when it operates in the foreign market.
  • To understand the two different approaches of standardization and adaptation, and the related marketing mix. Since China was altogether a different market from other global markets, which approach should the retailers follow while operating in China.
  • To understand the concept of agile company and discuss whether Wal-Mart was agile enough to compete in China.
  • To understand how a generic strategy of cost leadership failed in the case of Wal-Mart China.
  • To derive some management lessons for managers of international players operating in China from the case of Wal-Mart’s struggle and strategic adjustment.
Contents
INTRODUCTION
LUCRATIVE MARKET OF CHINA
BACKGROUND
WAL-MART IN CHINA
WAL-MART’S STRUGGLE IN CHINA
WAL-MART’S STRATEGY ADJUSTMENT
CHINA - A TOUGH MARKET FOR FOREIGN PLAYERS?
ROAD AHEAD
EXHIBITS

Keywords

Wal Mart; China, Retail, Globalization, International markets, expansion, EDLP

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