Walmart China Issues

In: Business and Management

Submitted By funkyrake
Words 5066
Pages 21
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Walmart needs to adjust to the Chinese market, while leveraging its source of competitive advantage. This requires a delicate balance. At the US, the brand Walmart is associated with low price rather than quality. In China, where everyone is going for low prices and providing low quality to do so, Walmart’s own brand could be an assurance for low prices but with quality by making the Walmart name about more than just retailing. The suggested strategy in the 2008 Walmart supplier meetings shows that it’s heading in that direction (Business Week). This also follows Gome’s strategy of renaming its suppliers to their own brand (Business Week), but goes beyond it as the foreign brand in China is already associated with higher reliability and quality assurance. This actually holds true in China were retailers do a better job of enforcing supplier quality than the local regulations. With that, Walmart is still able to use its expertise and knowledge in supplier negotiation and distribution system to keep costs down.
Although Walmart is a Joint-Venture, the sources do not mention any attempt to leverage the local partner to meet the local market, which seems the opposite to some other joint ventures discussed like Danone and Wahaha. Working together with the local partner to understand where and how the local regulations can be used or adjusted for Walmart’s success and gaining a stronger hold of the potential customer’s heart might help Walmart’s growth and dominance in the Chinese market (The Economist).
Most of what we mentioned about the Chinese consumer habits in previous cases is especially relevant for Walmart. The Chinese consumers go shopping to get out of the house, not necessarily to shop. They’re more impulse driven and like on-site promotions. They’re brand conscious but not loyal. They’re frequent shopper of small amounts and especially…...

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