By Group 2E : Abbie Hui Brenda Chan Cecilia Kwan Fiona Lam Kelly Yu Kristie Sze

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

Competitive advantage Cost Advantage Cost Advantage  Cost effectiveness  Superior Distribution Model

Walmart Manufacturers Walmart Customers Manufacturers Distributors Wholesalers Retailers Manufacturers Walmart Customers Tradtional Walmart

Competitive Advantage Human Resources Management Human Resources Management  Emphasis on the role of associates  Incentive for associates to perform better

Competitive Advantage Flexibility and Responsiveness Flexibility and Responsiveness  Management of Information System  Efficient Decision Making  Latitude to Set Price  Committed to ‘Everyday Low Price’ Philosophy  Committed to ‘Everyday Low Price’ Philosophy

Sustainability Embedded into the company-- durable Embedded into the company-- durable Intangible--Immobile Intangible--Immobile Multi-dimensional competitive advantage Multi-dimensional competitive advantage --causal ambiguity  Overall: sustainable  Overall: sustainable

Discount Store Government policies to encourage foreign investments Government policies to encourage foreign investments Intense competition Intense competition  Unfavorable  Unfavorable

Sam’s Club Buy in small quantities Buy 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 environment New and pleasant shopping environment Good management control skill of Wal- Mart Good management control skill of Wal- Mart  favorable  favorable

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

China Market Discount Store  Discount Store  Sam’s Club  Sam’s Club  Supercenter  Supercenter 

Implementation on Growth Strategy in China

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

External (cont’d) Product Strategy Product Strategy  Products:  SAM’s Club  Supercenter -increase the percentage of foreign branded products  Services:  Premier Customer Service: “Satisfaction Guaranteed Policy”

External (cont’d) Pricing Strategy Pricing Strategy  “Every Day Low Price”  Flexible Pricing System:  each store can set their prices accordingly

External (cont’d) Promotion Strategy Promotion Strategy  Advertising  build up brand awareness and image  build up brand awareness and image  Credit Bonus Awards Program:  encourage consumers’ repeat purchase and build their loyalty  encourage consumers’ repeat purchase and build their loyalty

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

WalMart.com : Facts Jan 2000 : Jan 2000 :  E-shopping service launched  Separately managed : Accel Partners  WalMart owns 80% Website currently shut down Website currently shut down

WalMart.com : Challenges Increasing Internet access Increasing Internet access  40% of towns do not have access  Recommendation  outsource Channel conflict Channel conflict  How not to lose sales to physical stores  Recommendation  market segmentation

WalMart.com : Challenges Providing quality customer service 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

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

Q & A

Growth of WalMart.com By mergers, buyouts and partnerships 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 Goes public  resources and funding