WUMART STORESResources and capabilities

Henrik Engervall (20848@student.hhs.se)Erik Ingemansson (egjin@kth.se)

Karl Nielsen (40201@student.hhs.se)Teresia Schullström (tsch@kth.se)

Principal resources and capabilities that form the basis of Wumart’s competitive advantage:

1. Strategic relations• Extensive network with prime locations thanks to SOE’s• Future expansion potential thanks to good relations

2. The earliest among domestic retailers to realize the importance of information technology in the development of a retail chain

3. Geographical advantage / Physical uniqueness

4. Widely recognized brand image of reliability, quality and value for money.

5. Strong corporate culture characterized by respect, a strong sense of responsibility and co-operation, innovation and learning, and great attention to details.

6. Zhang Wenzhong

yes no yes yes yes yes

yes no yes yes yes yes

yes yes yes yes yes no

yes no yes yes yes yes

yes yes* yes yes yes yes

It depreciates slowly

It is hard to copy

Your company controls its value

It can not be easily substituted

It is better than competitorsʼ similar resources

Pass or fail?

1. Rela

tions

2. IT

3. Geo

graph

ical a

dvan

tage

4. Bran

d, qu

ality

and v

alue

5. Corp

orate

cultu

re

6. Zha

ng W

enzh

ong

Regionally

Wumart’s competitively distict resources (regionally):

1. Strategic relations• Extensive network with prime locations thanks to SOE’s• Future expansion potential thanks to good relations

2. The earliest among domestic retailers to realize the importance of information technology in the development of a retail chain

3.Geographical advantage / Physical uniqueness

4.Widely recognized brand image of reliability, quality and value for money.

5.Strong corporate culture characterized by respect, a strong sense of responsibility and co-operation, innovation and learning, and great attention to details.

6. Zhang Wenzhong

- no - yes yes yes

- no - yes yes yes

- yes - yes yes no

- yes - yes yes yes

- no - no yes? yes

It depreciates slowly

It is hard to copy

Your company controls its value

It can not be easily substituted

It is better than competitorsʼ similar resources

Pass or fail?

1. Rela

tions

2. IT

3. Geo

graph

ical a

dvan

tage

4. Bran

d, qu

ality

and v

alue

5. Corp

orate

cultu

re

6. Zha

ng W

enzh

ong

Domestically

Wumart’s competitively distict resources (domestically):

1. Strategic relations• Extensive network with prime locations thanks to SOE’s• Future expansion potential thanks to good relations

2. The earliest among domestic retailers to realize the importance of information technology in the development of a retail chain

3. Geographical advantage / Physical uniqueness

4. Widely recognized brand image of reliability, quality and value for money.

5.Strong corporate culture characterized by respect, a strong sense of responsibility and co-operation, innovation and learning, and great attention to details.

6. Zhang Wenzhong

- no - yes yes yes

- no - yes yes yes

- yes - yes yes no

- yes - yes yes yes

- no - no yes? no

It depreciates slowly

It is hard to copy

Your company controls its value

It can not be easily substituted

It is better than competitorsʼ similar resources

Pass or fail?

1. Rela

tions

2. IT

3. Geo

graph

ical a

dvan

tage

4. Bran

d, qu

ality

and v

alue

5. Corp

orate

cultu

re

6. Zha

ng W

enzh

ong

International

yes no - yes yes yes

yes no - yes yes yes

yes yes - yes yes no

yes no - yes yes yes

yes yes* - yes yes yes

*

It depreciates slowly

It is hard to copy

Your company controls its value

It can not be easily substituted

It is better than competitorsʼ similar resources

Pass or fail?

1. Rela

tions

2. IT

3. Geo

graph

ical a

dvan

tage

4. Bran

d, qu

ality

and v

alue

5. Corp

orate

cultu

re

6. Zha

ng W

enzh

ong

Other Industry

Easier to expand in other industries regionally than internationally as Wumart since most competitive advantages are local.

Suggested improvements for future success:

• How to sustain regional performance?➡ Guard brand values, political relations, corporate culture and IT➡ Upgrade expansion pace➡ Upgrade inventory/product offer

• How to expand domestically?➡ Upgrade relations outside region➡ Branding➡ Invest in prime locations

Thank you for listening!

Reference list

1. Wumart stores: Chinas response to Wal-Mart

2. Collis, D.J. & Montgomery, C., “Competing on Resources”, HBR, 2008

3. Regnér, P. “Strategy-as-practice and Dynamic Capabilities: Steps towards a Dynamic View of Strategy”, Human Relations, 2008