Assignment 2 Walmart in China

Assignment 2 Walmart in China

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as Carrefour’s expansion plans.
The management then focused their attention on the wider
issues that would be important in China. These included
political and legal differences with the USA, economic
factors such as the yuan exchange rate, social and cultural
factors that could determine demand for certain goods and
the impact of technological change on retailing practices
and consumer buying habits.
Despite all of this strategic analysis, according to Strategic
Resource Group, ‘Walmart is being outmanoeuvred by
Carrefour because its executives have taken too long to
understand the Chinese market and add stores.’ Perhaps one
of the problems for retailers, even giant ones such as
Walmart, is the possible lack of a core competence, other
than substantial economies of scale that could allow them
to differentiate what they offer to retail consumers.
Questions:
Q]. Why do you think it is important to analyse the existing
strengths and weaknesses ofa business before taking
strategic decisions?
Q2 Explain, from Walmart’s point of view, the strengths,
weaknesses, opportunities and threats in the case of its
expansion in China.
Q3 Explain why it would be important to consider the
major differences between China and the USA before going
ahead with this expansion.

Case Study 2

Rapid economic growth in China is bringing huge potential
revenue to North American and European businesses and
many are looking to China as a country in which to expand.
Before moving into China. America’s biggest and most
successful retailer had to learn its business all over again.
‘China will be as big and as successful a market for
Walmart as the United States.’ said a Deutsche Bank retail
analyst. However, this will not be easy as C hina’s retail
market is dominated by domestic retailers and other foreign
retailers who have gained ground quickly. In world terms,
Carrefour is right up there with Tesco as a major
multinational retailer. Carrefour, the French supermarket
chain, one of Europe’s biggest public limited companies
had dominated sales in China. Carrefour has developed
close relations with over 400 suppliers locally and has
spent a great deal of time researching the local market. It
has also worked closely with local government agencies to
ensure its entry into the region goes smoothly. The general
manager of Central and Westem China has announced that
the supermarket will open two more stores in Chengdu this
year and more in 20] 1.
Under these circumstances and domination of Carrefour.
success for Walmart is not guaranteed. despite the careful
analysis that Walmart did before making the big strategic
move into China.
The company identified its strengths – such as huge