Wal-Mart in China

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Background Note Before Wal-Mart entered China in 1996, the country had looked a difficult place to do business. English was hardly spoken. China had been isolated from the West for so long. But as China opened itself to the rest of the world in the late 1970s and early 1980s, things began to change. In the early 1990s, when Rob Walton, joined by the company's real-estate personnel visited China, they realized Wal-Mart's format of trying to lower the cost of living for its customers made a lot of sense in China...

After entering China, Wal-Mart faced a major challenge in integrating Wal-Mart's values and expectations into employees used to working for state-run enterprises, where permanent employment was the norm and responsibilities were limited. State-run enterprises in China also offered little training and few incentives to employees who did well in their jobs...

As 2005 got under way, Wal-Mart continued to face various challenges in China. Wal-Mart and other foreign retailers had to offer a 35% stake in each store to a Chinese joint venture partner and were restricted to a territory of approximately 40 cities each. After December 2004, as part of China's admission to the WTO, the government would allow foreign retailers to own their own stores outright in any city they chose, provided they could arrange government building permits. With clearer rules and freedom, Wal-Mart might acquire existing retail outlets to scale up fast...

Exhibit 1: Two Categories of Wal-Mart in China Supercenter
Exhibit 2: Financial Highlights
Exhibit 3: The Wal-Mart Culture: Three Basic Beliefs
Exhibit 4: International Store Count
Exhibit 5: Financial Highlights

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