Abstract

China’s huge population, booming economy, and the growing affluence of the consumers have always attracted the multinational companies (MNCs). In the past, China was like an impregnable barrier for these MNCs. However, with the opening up of the economy and introduction of further reforms in the late 1990s and the 2000s, MNCs, cutting across industries, began seriously considering the China opportunity. After the opening up of the retail industry in 1991 and the introduction of major reforms in the mid-2000s, China has emerged as one of the most attractive retail markets for MNCs. However, like their peers in other industries, MNC retail chains that have entered the market or are planning to enter the market have had to face a number of challenges, some of which are peculiar to the Chinese market. Cracking the market requires capabilities and commitments that go beyond a simple adaptation of business strategy to suit an international market. This write-up can be used as a case study for class discussion and also double up as a teaching aid for teaching other China-specific case studies, particularly in the retail industry.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze China’s retail market, identify the opportunities and challenges, and explore ways in which multinational retail chains can take advantage of the opportunities while mitigating the risks of operating in the market
• Compare and contrast strategies adopted by Carrefour, Tesco and Wal-Mart in China, and understand the challenges these retail chains faced in the country
• Understand the issues and challenges faced by global companies operating in emerging markets.
• Understand the critical factors for succeeding in emerging markets, particularly in China

Keywords

Strategy, Emerging markets, Globalization, Competition, Entry strategy, Expansion strategy, Localization strategy, Retail, China, Carrefour, Tesco, Wal-Mart