By Group 2E :

Abbie Hui Brenda Chan

Cecilia Kwan Fiona Lam

Kelly Yu Kristie Sze

Outline

Competitive advantages Competitive advantages SustainabilitySustainability RecommentdationRecommentdation

Analysis of China marketAnalysis of China market Expansion strategy in ChinaExpansion strategy in China E-commerce in USE-commerce in US

Competitive advantage

Cost AdvantageCost Advantage Cost effectivenessCost effectiveness Superior Distribution ModelSuperior Distribution Model

WalmartWalmart

ManufacturersManufacturers

WalmartWalmart

CustomersCustomers

Manufacturers

Distributors

Wholesalers

Retailers

Manufacturers

Walmart

Customers

Customers

Tradtional Walmart

Competitive Advantage

Human Resources ManagementHuman Resources Management Emphasis on the role of associatesEmphasis on the role of associates Incentive for associatesIncentive for associates to perform bettto perform bett

erer

Competitive Advantage

Flexibility and ResponsivenessFlexibility and Responsiveness Management of Information SystemManagement of Information System Efficient Decision MakingEfficient Decision Making Latitude to Set PriceLatitude to Set Price

Committed to ‘Everyday Low Price’ Committed to ‘Everyday Low Price’ PhilosophyPhilosophy

Sustainability

Embedded into the company-- Embedded into the company-- durabledurable Intangible--Intangible--ImmobileImmobile Multi-dimensional competitive advantageMulti-dimensional competitive advantage

----causal ambiguitycausal ambiguity

Overall: sustainableOverall: sustainable

Discount Store

Government policies to encourage Government policies to encourage foreign investmentsforeign investments

Intense competitionIntense competition UnfavorableUnfavorable

Sam’s Club

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

MartMart favorable favorable

Supercenter

One-stop shoppingOne-stop shopping Low price sensitivity of Chinese customerLow price sensitivity of Chinese customer

ss Lack of capital and expertiseLack of capital and expertise Suitable market nicheSuitable market niche favorablefavorable

China Market

Discount Store Discount Store Sam’s Club Sam’s Club SupercenterSupercenter

Implementation on Growth Strategy in China

External Marketing StrategyMarketing Strategy

Positioning:Positioning: High quality, U.S. and global branded High quality, U.S. and global branded productsproducts

Target MarketTarget Market: The middle-class, citizens in : The middle-class, citizens in modernized citiesmodernized cities

External (cont’d) Product StrategyProduct Strategy

Products:Products:SAM’s ClubSAM’s ClubSupercenterSupercenter-increase the percentage of foreign -increase the percentage of foreign

branded products branded products Services:Services:

Premier Customer Service: “SatisfacPremier Customer Service: “Satisfaction Guaranteed Policy”tion Guaranteed Policy”

External (cont’d)

Pricing StrategyPricing Strategy ““Every Day Low Price”Every Day Low Price” Flexible Pricing System:Flexible Pricing System:

each store can set their prices each store can set their prices accordinglyaccordingly

External (cont’d) Promotion StrategyPromotion Strategy

AdvertisingAdvertising build up brand awareness and imagebuild up brand awareness and image

Credit Bonus Awards Program:Credit Bonus Awards Program: encourage consumers’ repeat purchase encourage consumers’ repeat purchase

and build their loyalty and build their loyalty

Internal Adopt and modify the major capabilities Adopt and modify the major capabilities

and competitive advantagesand competitive advantages *Special attention to cultural difference!*Special attention to cultural difference! Human Resource ManagementHuman Resource Management

Hire locallyHire locally Regular training and refresher courseRegular training and refresher course

WalMart.com : Facts

Jan 2000 : Jan 2000 : E-shopping service launchedE-shopping service launched Separately managed : Accel PartnersSeparately managed : Accel Partners WalMart owns 80% WalMart owns 80%

Website currently shut downWebsite currently shut down

WalMart.com : Challenges

Increasing Internet accessIncreasing Internet access 40% of towns do not have access40% of towns do not have access Recommendation Recommendation outsource outsource

Channel conflictChannel conflict How not to lose sales to physical storesHow not to lose sales to physical stores Recommendation Recommendation market segmentat market segmentat

ionion

WalMart.com : Challenges

Providing quality customer serviceProviding quality customer service Ranked last Ranked last (Source : Resource Marketing of Col(Source : Resource Marketing of Col

umbus, Ohio, 2000)umbus, Ohio, 2000)

A bad search engine, slow to loadA bad search engine, slow to load Recommendation Recommendation Provide customer Provide customer

relations management traningrelations management traning

Conclusion

Sustainable Competitive AdvantagesSustainable Competitive Advantages Cost Advantage, Flexibility, Cost Advantage, Flexibility,

Responsiveness, HRMResponsiveness, HRM Causal Ambiguity Causal Ambiguity

Growth StrategyGrowth Strategy Expansion in ChinaExpansion in China E-commerce in USE-commerce in US

Q & A

Growth of WalMart.com

By mergers, buyouts and partnershipsBy mergers, buyouts and partnerships companies with engineering and retailing talentcompanies with engineering and retailing talent eg After buying HomeWareHouse.com, form neg After buying HomeWareHouse.com, form n

ew platform ew platform partnership with Groove Networks, providing ppartnership with Groove Networks, providing p

hotograph sharing servicehotograph sharing service Goes publicGoes public

resources and fundingresources and funding