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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Excerpts Contd...

Retail Expansion

In late 2002, the Chinese government announced the introduction of new Foreign Direct Investment (FDI) policies allowing more MNCs to enter China. Earlier, foreign firms operated in a restrictive environment with limitations on the opening of new outlets and scale of operation. The new policy allowed MNCs to open shops anywhere in China from December 2004 onwards. It also allowed in wholly-owned foreign enterprises side by side with joint ventures with local firms.

In October 2003, B&Q opened a store in Beijing and after this, two more stores were opened in Shuangjing and Laiguangying in 2004...

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The Challenges

By late 2006, the home improvement industry in China had become highly competitive. China's acceptance of WTO directed trade practices on December 11, 2001 encouraged a number of foreign retailers to set up more and more retail outlets. The competition increased further as the Chinese Ministry of Commerce also allowed foreign investment into small and medium sized retail operations from March 01, 2006 onwards...

The Road Ahead

Another way in which B&Q decided to compete effectively with domestic as well as foreign retailers was through a widening of its product range.

In September 2006, B&Q inked an agreement with the Haier Group to sell Haier's kitchen appliances in its stores. Wei commented, "The partnership with Haier is a milestone for B&Q in its efforts to broaden its product range. We will continue working with Haier and other potential domestic appliance suppliers to provide more of our customers with more products."...


Exhibit I: B&Q Store (Interior)
Exhibit II: B&Q Store (Exterior)
Exhibit III: Leading Retailers in China (December 2005)

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