Sahil Puri (11037)(08-10) UIAMS, PU

Wal-Mart in China

Wal-Mart | International • Wal-Mart Stores, Inc. is an American public corporation that runs a

• • • • • • • • •

chain of large, discount department stores. It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500. Founded by Sam Walton in 1962, it was incorporated on October 31, 1969, and Headquarters: Bentonville, Arkansas, USA Revenue: US$ 404.16 Billion (2009) Operating income: US$ 30.07 Billion (2009) Net income: US$ 13.59 Billion (2009) Total assets: US$ 163.514 Billion (2007) Total equity: US$ 64.608 Billion (2007) Employees: 2,100,000 (2008)

World of Wal-Mart

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Wal-Mart in China • • Wal-Mart began its retail operations in China in 1996 with the opening
of a Supercenter and Sam’s Club in Shenzhen.

• • Wal-Mart now has 146 stores in China, covering 89 cities, including
138 supercenters, 3 Sam’s Clubs and 2 Neighborhood Markets. Mart stores. Now Wal-Mart has brought over 70,000 job opportunities in China.

• • Wal-Mart purchased a 35% interest in Trust-Mart and owns 102 Trust • • Wal-Mart actively participates in community service and charity events
and has donated funds worth more than US$ 8 million to local communities over the past 12 years.

• •

Wal-Mart in China • Experts pointed out that Carrefour had been successful in China

because it had been able to study Chinese consumers through its venture in Taiwan, while Wal-Mart did not have any such experiential advantage. Also, Wal-Mart did not make use of its first mover advantage and expanded slowly in China. 48 in 2005 to 90 in 2006.

• • Wal-Mart planned to increase the number of its stores in China from • • The company sold goods worth $940 million and purchased to

the tune of $18 billion from Chinese manufacturers in 2004, thus having a substantial presence both as a purchaser and a seller of goods in China. foreign retailers to fulfill its commitments as a World Trade Organization (WTO) member.

• • In December 2004, the Chinese government eased restrictions on •

Recognition in China • Wal-Mart China persists in local procurement which provides more job
opportunities, supports local manufacture industry and promotes local economy. So far, 95% of merchandising sold at Wal-Mart China store are local products by which Wal-Mart has established business relations with nearly 20,000 suppliers.

• In China, Wal-Mart has won many awards, including,

• Supplier Satisfaction by Business Information of Shanghai for five consecutive years • Best Employer for University Student • Leading Multi-National Enterprise in Asia by Asian Wall Street Journal • Best Employer in China Retail Industry by CCFA • China Most Valuable Brand by Fortune Chinese Version • 2008 Top 10 Best investing Fortune 500 Companies in China by Southern Weekend Magazine • Excellent Employer by Fortune Chinese Version • Multi-Nation Company Charitable Donations by Forbes Chinese Version • Most Admired Company by Fortune Chinese Version • Best Community by Guangming Daily

ENTRY AND EXPANSION STRATEGIES

• Localization Strategies •
– Governance Practices

• Procurement and Distribution

• At Wal-Mart, associates found a high degree of transparency in relation to career growth. • Wal-Mart valued an individual's competence rather than personal connections when promoting an employee.

• The Problem Areas
• The company's supply chain operations were not as efficient as in its home market. • Stiff competition from both local Chinese retailers and from foreign retailers who had established their base in China. • Even after nine years of presence in China, Wal-Mart was still very small with just 48 stores. • Its 2004 sales from the Chinese operations were around 2% of its international sales.

Businees Categories • International Business Categories
• • • • •

There are four Business Categories of Wal-Mart: Wal-Mart Supercenters SAM'S CLUB Wal-Mart Stores Wal-Mart Neighborhood Market

• Categories of Wal-Mart in China:
 

Wal-Mart Supercenter

SAM'S CLUB.

Wal-mart China Corporate Social Responsibility

Environmental Protection

• Wal-Mart has set three goals in environmental protection: to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain resources and the environment.

 

Community Involvement • Wal-Mart associates actively participated in community activities throughout China including visiting the elderly in local welfare centers, supporting the handicapped, and helping needy families, etc. Children Welfare • Wal-Mart holds a series of community activities that focus on the welfare of our children, including organizing painting and calligraphy competitions, making donation to local children welfare centers and supporting schools for needy and handicapped children •  Education Support
 

Disaster Relief

Hurdles Faced By Wal-mart In China

• Supply chains encounter greater hurdles in China than elsewhere

• Regionalism in China

• Appropriate technology levels

• Nontariff trade barriers: •

• A cap on the number of stores a company can open • Vague testing and labeling laws Financial matters: • A company with joint ventures in several locations supplied by one may have to make a separate payment from each venture. • China still depend heavily on a hard-copy paper flow of documentation, which adds cost, requires excess manpower, and creates opportunities for human error

• LTL (less-than-truckload) and private, nationwide parcel delivery.
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Serving Different Market Segments

EDLP

Save Money

Live Better

Local Merchandising

Wal-Mart & Trust-Mart Partnership

黑龙江

吉林 新疆 宁夏 内蒙古 河北 青海 山西 辽宁

北京

山东

西藏

陕西

河南

江苏

四川

河北 湖南 贵州 江西 福建

云南 广西 广东

    

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