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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Introduction Contd...

In December 2001, China began to implement WTO requirements and so the Chinese government introduced policies allowing in foreign investments in industrial as well as retail sector. Realizing the huge potential of the Chinese home improvement market, B&Q went on an expansion spree from 2002 onwards. As of November 2006, the company had 52 stores across China.5 However, industry analysts have expressed doubts as to whether B&Q's expansion in China will be successful as the company faces fierce competition from domestic as well as foreign retailers in the home improvement industry. As of late 2006, B&Q was broadening its product portfolio to include home appliances and soft furnishings, in an effort to maintain an edge over its competitors.

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Background Note

B&Q was set up in 1969 by Richard Block6 and David Quayle (Quayle). The first store, a 3000 square foot self service home center, was in Southampton, Hampshire, UK. It sold various home improvement products for use in the home, garden, car, etc. In the UK, home improvement stores are commonly known as Do-It-Yourself (DIY) stores, as customers fit the product together themselves after buying the product pack.

Initially, the store was named Block & Quayle and this was soon shortened to B&Q. Quayle recalled, "Suppliers sent us product in boxes marked B&Q, so that name stuck."7 By the year 1979, the company had 26 stores across the UK. The stores looked like warehouses. The warehouse type of store was a unique idea at that time. B&Q's major target customers were those in the middle age group. To attract older customers, the company employed older people (over 50 years of age) in its stores.

During the 1980s, B&Q grew rapidly through mergers, acquisitions and expansion of its operations...

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5] "B&Q Opens New Store in Changchun,"www.chinafranchiser.com, November 15, 2006.

6] Richard Block, the then brother-in law of Quayle, left the company in 1976.

7] John Caulfield, "B&Q,"www.homechannelnews.com, March 22, 1999.

 

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