Outline

1
Wal-Mart
By Group 2E Abbie Hui Brenda Chan Cecilia
Kwan Fiona Lam Kelly Yu Kristie Sze
2
Outline

• Competitive advantages
• Sustainability
• Recommentdation
• Analysis of China market
• Expansion strategy in China
• E-commerce in US

3
Competitive advantage

• Cost Advantage
• Cost effectiveness
• Superior Distribution Model

4

Walmart

• Walmart
• Manufacturers
• Walmart
• Customers

Tradtional
Manufacturers
Manufacturers
Distributors
Walmart
Wholesalers
Customers
Retailers
Customers
5
Competitive Advantage

• Human Resources Management
• Emphasis on the role of associates
• Incentive for associates to perform better

6
Competitive Advantage

• Flexibility and Responsiveness
• Management of Information System
• Efficient Decision Making
• Latitude to Set Price
• ? Committed to Everyday Low Price Philosophy

7
Sustainability

• Embedded into the company-- durable
• Intangible--Immobile
• Multi-dimensional competitive advantage
• --causal ambiguity
• ?Overall sustainable

8
Discount Store

• Government policies to encourage foreign
  investments
• Intense competition
• ?Unfavorable

9
Sams Club

• Buy in small quantities
• Reluctance to pay membership fee
• Few warehouse clubs in China
• New and pleasant shopping environment
• Good management control skill of Wal-Mart
• ? favorable

10
Supercenter

• One-stop shopping
• Low price sensitivity of Chinese customers
• Lack of capital and expertise
• Suitable market niche
• ? favorable

11
China Market

• Discount Store ?
• Sams Club ?
• Supercenter ?

12
Implementation on Growth Strategy in China
Localisation!!!
13
External

• Marketing Strategy
• Positioning High quality, U.S. and global
  branded products
• Target Market The middle-class, citizens in
  modernized cities

14
External (contd)

• Product Strategy
• Products
• SAMs Club
• Supercenter
• -increase the percentage of foreign
  branded products
• Services
• Premier Customer Service Satisfaction
  Guaranteed Policy

15
External (contd)

• Pricing Strategy
• Every Day Low Price
• Flexible Pricing System
• ?each store can set their prices accordingly

16
External (contd)

• Promotion Strategy
• Advertising
• ?build up brand awareness and image
• Credit Bonus Awards Program
• ?encourage consumers repeat purchase
  and build their loyalty

17
Internal

• Adopt and modify the major capabilities and
  competitive advantages
• Special attention to cultural difference!
• Human Resource Management
• Hire locally
• Regular training and refresher course

18
WalMart.com Facts

• Jan 2000
• E-shopping service launched
• Separately managed Accel Partners
• WalMart owns 80
• Website currently shut down

19
WalMart.com Challenges

• Increasing Internet access
• 40 of towns do not have access
• Recommendation ? outsource
• Channel conflict
• How not to lose sales to physical stores
• Recommendation ? market segmentation

20
WalMart.com Challenges

• Providing quality customer service
• Ranked last (Source Resource Marketing of
  Columbus, Ohio, 2000)
• A bad search engine, slow to load
• Recommendation ? Provide customer relations
  management traning

21
Conclusion

• Sustainable Competitive Advantages
• Cost Advantage, Flexibility, Responsiveness, HRM
• Causal Ambiguity
• Growth Strategy
• Expansion in China
• E-commerce in US

22
Q A
23
Growth of WalMart.com

• By mergers, buyouts and partnerships
• companies with engineering and retailing talent
• eg After buying HomeWareHouse.com, form new
  platform
• partnership with Groove Networks, providing
  photograph sharing service
• Goes public
• resources and funding