Executive Summary
Yutong Wang 2012117012
Introduction
This report intends to provide the outcomes from our team meeting, analyzing the key challenges of Walmat and making recommendations.
Wal-Mart Stores was founded by American retail legend Mr. Sam Walton in Arkansas in 1962. The company is now the world’s largest private employer and retailer, on the top of the Fortune 500 list. Walmart entered the Chinese market in Shenzhen in 1996. And now Wal-Mart is still expanding in China, despite rising labor costs.
Key Challenges of Walmat
Wal-Mart has now faced several challenges in China. Competition from online shopping websites is fierce. Many consumers say that the convenience of shopping close to home, rather than driving to a Wal-Mart store, is worth more than lower prices. Its own advantages of logistics cannot work in China because of the poor transport.
Four Strategies
Slow down the expansion rate and expand into lower tier cities.
Offer more products at consistent lower prices instead of hosting temporary discounts and
seasonal sales.
Build its presence in e-commerce by taking a majority stake in Yihaodian. Create synergy between brick-and-mortars and online stores.
Recommendations
Chinese transport system is so weak that can not make Walmat reduce costs. So the the advantages of logistics cannot work. Walmat should still focus on the market of big cities in China instead of small towns. The structure of consumption is changing and Walmat should investigate the market to develop its own advantages.
Conclusion
It is concluded that Walmat faces huge challenges in China. It should be careful to deal with the market situation which is quite different from what in America.
