Competitive dynamics in china - Optimal Resume at KAPLAN
Download
Report
Transcript Competitive dynamics in china - Optimal Resume at KAPLAN
Walmart Consultants: Annette Tomazin
Marguerite Walker
Joel Westfield
Danielle Wiede
Increase market share
Bailian Group
Kangcheng
Carrefour
Walmart
Huaren Wanjia
Nonggongshang
Haoyouduo
Tesco
Wumart
0
2
% of Market Share
4
6
8
10
12
Increase profitability: Harness the potential
World’s second largest GDP
GDP ($ Trillion)
15
14
12
10
8
6
4
2
0
U.S. China Japan
Per capita GDP 45 years behind Japan
Increase profitability: Harness the potential
Positioning for future growth
1.35 billion people and growing
Rapid urbanization
Eastward shift?
Give consumers what they want
One China, many markets
Quality/price mix
Analysis of the Political, Environmental,
Social, and Technological climate in China
Government
Local
Protectionism
International
Weak
Regulations
Trade Barriers
Court System
GDP growth and inflation concerns
Relatively unfazed by global economic crisis
Consumer spending & retail sales trending up
Capital markets controlled by government
High freight costs
The typical consumer shops only for essentials
Frequent trips/less items per trip
Social event – a reason to get out of the house
High quality groceries are in high demand
Disparity between lower and middle classes
Utilization of the Internet
Global communications technology
Radio frequency technology
Lack of IT information network
Achieving Optimal Operational Efficiency
By Understanding the Competition, Customers,
Suppliers, and Partners
Porter's Five Forces of
Competitive Position
Supplier Power
1 Energy efficiency
requirements
2 Working conditions
requirements
3 Local suppliers cut out
middle suppliers
Threat of New Entrants
1 Restrictive policies
2 Poor distribution channels
3 Phase by phase entry
4 Government alliances
Competitive Rivalry
1 Squeezing margins
2 Lowering costs
3 Government favor
4 Battle for market share
Threat of Substitutes
1 Cheap digital music
2 Rise of fast food
3 Electronic shopping
Buyer Power
1 High quality products at
low prices
2 Fresh/live produce and
perishables
3 More selective and more
trips to the store
Threat
of entry of new competitors is low
Substituting
fast food for groceries
E-commerce
and digital distribution
Chinese buyers’ behaviors give them power
Walmart has power over its suppliers
Competitive rivalry is intense
Battle for market share
Understanding the customer
Squeezing Margins
Walmart’s home country business climate
Partnering with/within other countries
Competitors’ countries: France, Germany, others
Suppliers’ countries
Supplier standards: Cheap labor, high oversight
Local suppliers for fresh (live) produce
Suppliers’ countries
Customer country quite different from U.S.
Supplier standards: Cheap labor, high oversight
Local suppliers for fresh (live) produce
Customer shopping and saving behaviors
Customer tastes: Competition knows better
The Next Generation Walmart China
Offer high-end products in stores and dot com
Improved affluence due to low birthrate
Demand for foreign products is high
One-year pilot project
Chinese population moving to eastern cities
Region
East Coast
E. Central
Far West
N. East
All others
0
Share of Growth (%)
25
50
75
100
82.8
8.8
4.8
4.2
-0.6
Transforming western border cities
Partnering with the government in Xinjiang
Start with Walmart’s board of directors
The head of operations in Asia is American
CEO of Walmart China is American
Chinese legal team in China
Internship program to develop corporate leaders
Scandals
Intensify
Continue
shake reputation of foreigners
oversight to build trust
social and community programs
Especially
important in the west
Upscale products: Existing supply chain
Ministry of Commerce, People’s Rep. of China
Director search: Heidrick and Struggles
Shanghai University: Dr. Chen Xian
Ethics training for store management
All eyes on Chinese aisles. (2011). Economist, 398(8734), 69-70. Retrieved from: http://www.economist.
com/node/18712457
An introduction to China’s provinces, municipalities and autonomous regions. (2011). Retrieved from:
http://www.china.org.cn/english/features/ProvinceView/156243.htm
Annual report. (2011). Retrieved from: http://walmartstores.com/sites/annualreport/2011/ financials/
Walmart_2011_Annual_Report.pdf
Background note: Brazil. (2011, March 8). Retrieved from: http://www.state.gov/r/pa/ei/bgn/35640.htm
Background note: Sri Lanka. (2011, Apr. 6). Retrieved from: http://www.state.gov/r/pa/ei/bgn/5249.htm
Background note: Turkey. (2011, May 13). Retrieved from: http://www.state.gov/r/pa/ei/bgn/3432.htm
Chandler, Clay ( 2005, July 25). The great Walmart of China. Retrieved from: http://money.cnn.com/
magazines/ fortune/fortune_archive/2005/07/25/8266651/index.htm
China. (2011). Index of economic freedom. Retrieved from: http://www.heritage.org/Index/Country/China
China business strategy: Walmart and Chinese culture. (2009). Fili’s World. Retrieved from:
http://www.filination.com/blog/2009/03/14/china-business-strategy-walmart- chinese-culture/
China’s political system. (2008, Aug. 25). Retrieved from: http://al.china-embassy.org/eng/
zggk/t514665.htm
China’s retail sales up 17.2% in July. (2011, Aug. 9). China Daily. Retrieved from:
http://www.chinadaily.com.cn/imqq/bizchina/2011-08/09/content_13080577.htm
China to build bustling border towns in Xinjiang. (2011, Nov. 6). Retrieved from: http://www.china.org.cn/
china/2011-11/06/content_23835229.htm
Cox, W. (2011, May 4). China: Urbanizing and moving east: 2010 census. Retrieved from:
http://www.newgeography.com/content/002218-china-urbanizing-and-moving-east-2010-census
D’Altorio, T. (2011, Feb. 14). Fast-food culture grows in China. Retrieved from:
http://www.investmentu.com/2011/February/fast-food-culture-grows-in-china.html
Erickson, G., & Kelly, E. P. (2007). International Aspects of Radio Frequency IdentificationTags: Different
Approaches to Bridging the Technology/Privacy Divide. Knowledge,Technology, & Policy, 20(2),
107-114. Doi:10.1007/s12130-007-9011-y
Farhoomand, A. (2008, Sept.). Walmart stores: Everyday low prices in China. Harvard Business Review.
Retrieved from: http://cb.hbsp.harvard.edu/cb/product/HKU590-PDF-ENG
Flannery, R. (2011, Sept. 23). Chinese consumer spending seen expanding despite global economic tumult. Forbes. Retrieved from: http://www.forbes.com/sites/russellflannery/
2011/09/23/chinese-consumer-spending-seen-expanding-despite-global-economic-tumult/
Global responsibility report. (2011). Retrieved from: http://walmartstores.com/sites/
ResponsibilityReport/2011/WalmartGRR.pdf
Heidrick & Struggles. (2011). Retrieved from: http://www.heidrick.com/ExecutiveSearch/Functional/CEO
BoardofDirectors/Pages/ChiefExecutiveOfficerBoardofDirectors.aspx
Hornblower, S. (2004). Walmart & China: A joint venture. Retrieved from:http://www.pbs.org/
web/pages/frontline/shows/walmart/secrets/wmchina.html
Hourly compensation costs for production workers: Sri Lanka. (2009, Nov.). Retrieved from:
ftp://ftp.bls.gov/pub/special.requests/foreignlabor/pwsrilanka.txt
International labor comparisons: Brazil. (2011, Aug. 16). Retrieved from: http://www.bls.
gov/fls/country/brazil.htm
Johnson, G., Scholes, K., Whittington, R. (2008). Exploring Corporate Strategy (8th ed.).
London: Prentice Hall.
Kennedy, J. (2010). IFPI digital music report. Retrieved from: http://www.ifpi.org/content/
library/DMR2010.pdf
Mahajan-Bansal, N. (2009, Oct. 20). Walmart’s Strategy through the world. Retrieved from:
http://business.in.com/article/magazine-extra/walmarts-strategythrough-the-world/6042/1
Mello, J. (2011). Strategic human resource management (3rd edition). Mason, OH:
South-Western, Cengage Learning
Ministry of Commerce People’s Republic of China. (2011). Retrieved from: http://english.mofcom.gov.cn/
Mufson, S. (2010). In China Wal-Mart presses suppliers on labor, environmental standards.
Washington Post. Retrieved from: http://www.washingtonpost.com/wp-dyn/content/
article/2010/02/26/AR2010022606757_3.html
Olsen, R. (2011, Oct. 18). China’s slower GDP ‘just what the doctor ordered’. Forbes. Retrieved
from: http://www.forbes.com/sites/robertolsen/2011/10/18/chinas-slower-gdp-just-whatthe-doctor-ordered/
Output, prices and jobs. (2009, Mar. 12). Economist. Retrieved from: http://www.economist.
com/node/13278698
Porter, M. (2008, January). The five competitive forces that shape strategy. Harvard Business
Review. http://docsharing.next.ecollege.com/(NEXT(d771b20b2f))/Main/CourseMode/
DocSharing/ListCategoriesAndFilesView
Porter, M. (2008, January). The five competitive forces that shape strategy. Harvard Business
Review. http://docsharing.next.ecollege.com/(NEXT(d771b20b2f))/Main/CourseMode/
DocSharing/ListCategoriesAndFilesView
Ross, J. (2011, June 26). China’s global companies: Strengths and weaknesses. Retrieved from:
http://www.china.org.cn/opinion/2011-06/26/content_22855094.htm
Shanghai University. (2011). Retrieved from: http://www.shu.edu.cn/en/CollegeInternational.htm
Sri Lanka. (2011). Retrieved from: http://www.heritage.org/Index/Country/SriLanka
Suppliers. (2011). Retrieved from: http://walmartstores.com/suppliers/
Spulber, D. (2007). Global Competitive Strategy. New York: Cambridge University Press.
The other side of foreign brands. (2011, Nov. 3). China Daily. Retrieved from: http://www.china.org.cn/
opinion/2011-11/03/content_23804899.htm
Turkstat. (2011, Nov. 13). Retrieved from: http://www.turkstat.gov.tr/ PreTablo.do?tb_id=27&ust_id=8
Turkey. (2011). Retrieved from: http://www.heritage.org/Index/Country/Turkey
Vigne, Q. (2011, Feb. 1). The Carrefour scandal. Retrieved from: http://www.china.org.cn/opinion/201102/01/content_21858261.htm
Walmart Announces Global Responsible Sourcing Initiative at China Summit. (2008). Retrieved
from: http://walmartstores.com/pressroom/news/8696.aspx
Wal-Mart China CEO quits. (2011, Oct. 18). Retrieved from: http://www.china.org.cn/video/201110/18/content_23656571.htm
Wal-Mart history. (2011). Retrieved from: http://www.sunsetcamp.org/feeders/walmart.htm
Wal-Mart's investment in China hypermarket operator to bring new value to China's shoppers.
(2011). Retrieved from: http://investors.walmartstores.com/phoenix.zhtml?c=112761
&p=irolnewsArticle&ID=967478&highlight
Will digital music in China overthrow the traditional music publishing business? (2006, May
10). Retrieved from: http://knowledge.wharton.upenn.edu/article.cfm?articleid=1469
Woke, Li. (2011, Aug. 25). Walmart China has big plans in small cities. China Daily. Retrieved from:
http://www.chinadaily.com.cn/bizchina/2011-08/25/content_13189621.htm
World factbook, the: China. (2011, Nov. 8). Retrieved from: https://www.cia.gov/library
/publications/the-world-factbook/geos/ch.html
World factbook, the: Sri Lanka. (2011, Nov. 8). Retrieved from: https://www.cia.gov/library/
publications/the-world-factbook/geos/ce.html
World factbook, the: Turkey. (2011, Nov. 8). Retrieved from: https://www.cia.gov/library/
publications/the-world-factbook/geos/tu.html
Yu, C. (2009). Glimmers amid the gloom. Retrieved from: http://www.pwc.dk/da/detail/assets/
glimmers-amid-the-gloom-final.pdf
Zhihao, T. (2011, July 14). Consumption set to gradually rise. China Daily. Retrieved from:
http://www.chinadaily.com.cn/bizchina/2011-07/14/content_12899283.htm