B&Q's Strategies in China

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Case Details:

Case Code : BSTR245
Case Length : 11 Pages
Period : 1999-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : B&Q
Industry : Retailing
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Initial Years in China

While planning its entry into China, B&Q initially considered one of the three major Chinese cities - Shenzhen, Beijing and Shanghai - for the opening of its first store. In 1998, the company finally decided to set up a store in Shanghai mainly because of its diverse population and as it was the commercial capital of the country. B&Q then looked for a potential partner to form a joint venture based on certain criteria (Refer to Table I for B&Q's criteria to set up the joint venture).

In 1999, B&Q formed a joint venture with Home Decorative Building Materials Ltd. - a Shanghai based property developer, which offered land in Shanghai. The joint venture was named Shanghai B&Q Decorative Materials Company (Shanghai B&Q)...

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B&Q's Growth Strategies

The public housing system in China underwent a huge change in the late 1990s. The Chinese government introduced new policies for the development of urban areas. Earlier, most of the houses of state employees were owned by the Chinese government. In the year 2000, 60% of all public houses in almost all the provinces, autonomous regions and municipal cities were sold to individuals. Ex-government employees were given the opportunity to buy their rented homes. Also, a large number of new houses were built in urban areas to meet the demand of first-time buyers...

Success Factors

The exterior and interior design of the B&Q Shanghai store was done in white and orange colors, typical of its stores in the UK. The store was big with vast ceilings, high racking and was well lit with bright lights. Each department had instruction boards explaining how to assemble and use the products. The floor employees gave vivid product demonstrations to the customer. The stores had a special children's corner where children could play and construct houses using small pieces of wood (Refer Exhibit II for a photograph of a B&Q store (exterior) in China).

B&Q faced some initial problems due to its unconventional merchandise display. Initially, the Shanghai store displayed electrical merchandise like sockets, cables, conduits, switches etc., according to the quality and functionality of the products...

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