Mart to operate efficiently. Trust-mart had national sales, distribution and purchasing networks
that were key to Wal-
Mart’s e
ntry in China. Strong e-commerce platform: Wal-Mart had a strong
e-commerce platform around the world. It successfully invested in e-commerce by acquiring
many companies in China. Multi-channel usage by Wal-Mart: Wal-Mart used online tools and
mobile applications to sell to consumers in China. Strong initiatives in China: Wal-Mart
established relationships with more than 20,000 Chinese suppliers sourcing 95% of the products
in its stores locally. It also implemented many women empowerment initiatives in China such as
the Women’s Leadership Development Commission. Other initiatives
included using sustainable
energy, and CSR initiatives. Steps to reduce substandard selling: Wal-Mart took strong steps to
reduce the selling of expired products in China that praised by Chinese authorities.
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Weaknesses
Top management resignations might reduce effectiveness: Most of the top management of Wal-
Mart had resigned including the Chief operating officer, the Chief financial officer and the
previous president. Weak performance in China: Wal-Mart had low profit margins in China of
around 2-3%. No clear plan for Wal-
Mart’ in China: Due to land constraint
s, Wal-
Mart’ build
two types of smaller supermarkets in first tier cities but later reversed the decision and closed
them. The management had failed to study the differences in culture and consumer perceptions
of Chinese customers. Flawed decision making around the world: Wal-Mart did not do a proper
analysis and failed in its attempt to implement the EDLP strategy in Korea, Germany and Russia,
because it did not study the consumer market properly and did not have a proper strategy for
Non-American markets.
Bribery incidents damaged the company’s reputation: Between 2004
and 2005,
the company’s internal
reports showed that there were 90 such cases in China.
Instances of selling wrongly marketed products and expired products: In China Wal-Mart found
was selling expired products and selling products that were different from how they marketed.
This caused closing of 13 stores in of Wal-Mart. Poor local management in China: The problem
of selling expired and falsely marketed products stemmed from the lack of professional attitude
from local Chinese management.
Opportunities
China’s thriving economic condition: Foreigners
could operate businesses in China in a
streamlined manner. The company had shown increasing in prosperous growth when compared
with western economies. Promising retail sector in China
: China’s retail sector
estimated at US $
7803 billion and expected to grow at 11% to reach US$ 1.5 trillion by 2015. Consumer buying
power high in China: Consumers in China had high purchasing power that seen in the rise of
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credit card balances. Also 75% of all urban households traded in at least one product category of
spending according to a study. Additionally Chinese consumers had more money than officially
reported in statistics. China expected to be the largest consumer market in the world in 2020.
