Case Study Wall-Mart Stores
Human Resources Management Introduction In this case study I will be discussing the company Wall-Mart Stores: Every Day low Prices in China.
By the time 2005 rolled in China has become the most prominent country to set up a branch for stores. China had a huge open market and it was time for the company to take advantage of the opportunity that was happening in China. Wall-Mart has become the world’s largest retail chain. This can only mean one thing and that is expansion.
The strategic move to expand the company chain stores to China was based off of the following factors.
First factor was China size as far as land, population. They also had a booming middle class that was in the position to spend money due to their expanding economy. It became the Ideal place to invest especially considering the population alone would be beneficial to the company because It had way more consumers that were eager to buy Wall-Mart goods. The company branded the phrase “Every Day Low Prices”.
This was known worldwide by anyone who mentioned a Wall-Mart store. When Wall-Mart former Chinese president resigned in March of 2005, the company they were struck with a problem because now management was changing and that would in fact affect sales in that country.
In china they were faced with competition from other retailers, they dropped in rank to number twelve in sales among china stores. This was a huge let down for the company that seemed to dominate everywhere they go. The big question is how do they come back from this blow and regain their top status.
They suffered a defeat In Germany regarding expansion and id not want the same thing to happen In China where so much opportunity was there to make money. Wall-Mart history Is really an Incredible story. The company first started out in Rogers, Arkansas by Sam Walton in the summer of 1 962 (Farmhand, A.
F. , Wang, 1. , September, 2008). He was a visionary and was brilliantly thinking of how he could help the average American save money but still getting a product and service that would make them come back.
At this time there was major competition that provided good products and service too consumers but none could come close to what Walton had in mind.
Wall-Mart had a lot going for it they had a variety of products, good customer service and friendly, They also had free parking with an Incredible low prices made the store a house hold name literally over night. No one could compete with what the company was bring to the Industry especially after when so many people doubted the company ability to even serve and last In the Industry. That Is why the company Is so huge today due to those simple factors.
People want to go Into a place where they can get the best bargain for their money and have a wide selection to choose from. I Nils Is winy ten expansion project In Canaan was so critical to ten company Decease they have done so well in other countries with the same concept and idea. Wall-Mart does not take losing as an option and wants to provide the best quality service to their customers.
In order to do they needed to come up with a plan that would appeal to everyone not Just a specific group. Every day low prices was a phrase that the company took on almost like a slogan and it stuck with them.
They came up with the idea of playing on other competition objective. For example if you shop at Sears you want to know about the sales and how much of a discount you can get. Those kind of stores relies on sales to bring in their customers because a majority of their customers can’t afford to shop at full price very often. The difference with stores like Sears and Wall-Mart is that Wall-Mart doesn’t uses sales they always keep their prices so low that customers can afford to make daily trips to store without having to rely on a sale to keep them satisfied.
Another strategic moves that Wall-Mart made was that they constantly monitored their competitors. Their goal was to present their customers with the lowest price possible. The objective was offer a price lowers than other local stores. According to the article experts says that Wall-Mart customers saved at least 15% on a typical cart of groceries (Farmhand, A. F. , Wang, 1.
, September, 2008). The major issue for Wall-Mart was how to salvage the investment they made in China. They had these entire great strategic plan that worked in other countries that seemed to have done great.
By 1996 the company decided to move a branch into China they started with a superstructure and a Cam’s club. The business did not take off the way they hoped and planned. The company started to lose money since it opened stores in China.
The company thought that the problem was that they had only one store in such a huge market. The fact of the matter was that the Chinese government turned down the company request to expand further in different parts of the country. The government was not convinced that Wall-Mart would be successful with all the new competition that was being implemented in other areas.
Conclusion Wall-Mart learned that businesses in other countries may impact the benefit of an investment and is also learning that it’s going to be trail and error. They can only hope that they can endure their place there so that they can have the potential to grow as a brand. I recommend that the company continue to research and discover what is in those local stores that are driving their consumers to keep coming back for more.
References Farmhand, A. F. , Wang, l. (September, 2008). Wall-Mart stores: Everyday Low Prices in China (Case Study).
Retrieved from Harvard Business Online website.