Sosuke Sugisaka (Chris). Tan Ming Jiang (MJ)

Company overview and main business in the worldWalmart business model analysisWalmart in China How Walmart understand Chinese market & consumers?Situation and competitors anaylsis (local and international)Major problems facing Walmart Content What’s the next step for Walmart?

MNC - Largest Retailer in the World Large Discount Departmental Stores 2 nd Largest Corporation in the World Company overview and main business in the world

Founded in

Regional to National Giant (1980 – 1990) Most Profitable & Largest Retailer in US by 1989 Largest Grocery Retailer in US Generated 51% of US$258B Sales in Grocery Business in US 2009

10, Countries E- commerce in 10 Countries 2.2M Associates around World Unsuccessful in Germany, Russia, South Korea

Osterwalder’s 9 point decomposition of a Business Model (Chesbrough, 2010) Everyday low price Shoppers convenience Saving time & money Owned & Direct Low Cost Engagement Mass Media Co-creation of products Mass communication 3 groups of customers Purchasing goods Their delivery (logistics) Total cost control Physical resources Human resources Company culture Strong buyer- supplier R/S Suppliers keep prices & costs low Reaps EOS & optimizes cost structure Cost-drive model – minimizing costs Using technology to reduce costs gaining EOS Passing operating costs to suppliers Retail Sales from customer segment; music D/L Drives its own brand Adv of selling goods before paying Walmart business model analysis

1996 SupercenterSam’s Club Walmart in China

2002: Opening of Walmart’s global sourcing office 2007: Purchased 35% of shares from Trust- Mart 2012: Completed buying all the shares 2011: Walmart’s China eCommerce headquarters in Shanghai established 2012: 51% ownership of Yihaodian – fastest growing e-commerce business in china

90,841 Associates Contributions to China 20,000 Supplier Partnerships 99.9% Chinese Employees Best Employer in China by FORTUNE China and Watson Wyatt Most Generous MNC Donors in China by Forbes China Community Involvement Award in China by the Guangming Daily

Walmart donated over RMB 20M to the Sichuan earthquake- stricken areas (2008) Corporate Social Responsibility Walmart held nearly 400 community activities at 150 stores in over 80 cities across China (2009) “Earth Month” green campaign launched across China – turning off 1/3 of the lighting in the stores during off-peak hours in line with WWF’s Earth Hour program. (2010 Mar – Apr) Environmental protection Community involvement Child welfare Educational support Disaster relief, child welfare, educational support, and disaster relief.

How Walmart understand Chinese market & consumers?

Understanding the Chinese Market Diverse population Too many players Local protectionism Regulatory restrictions Employees – relatively unsatisfied

Reason for shopping Analyzing the Behaviour of Chinese Consumers Like on-site promotions Impulse Driven

Trend of Chinese Lifestyle Frequent shoppers of small amounts Appreciate freshness for food Brand conscious but not loyal

2011 年 Situation and competitors anaylsis (local and international)

“A High and Low pricing” “Everyday Low Price” CONCEPT

LOCATION ・ Suburban areas ・ lower incomes areas ・ Urban residential areas ・ Higher incomes areas

SUPPLY CHAIN “Central distribution” “Local distribution”

E- commerce LocalizationQuality Major problems facing Walmart

Bitter competition for Market Share

Too large store Inconvenient for going on Foot? Not traditional shopping

Low quality Poor in diversity Too cheap

What’s the next step for Walmart?

E- commerce Fascination Delivery Point Syste m

Localization ＆ Quality Community- based store Focus on the Mid and High class Enrich diversity Others