Wumart Stores:China’s Response to Wal-Mart

Sofia KjellströmLu LeiAnna MononenLukas RoseRomain Aubert

To Wal-Mart by B2 Consulting Ltd.

Wumart’s competitive advantage

Resources: - IT expertise - Corporate Culture - Brand equity - 3 types of stores - Everyday low-price strategy

Wumart’s competitive advantage

Capabilities: - regional knowledge - close ties with the government

- CSR - Local suppliers relations

Wumart’s competitive advantage

Superior to local competitors, Wumart still does not possess the financial assets

and management expertise resources of Wal-Mart

SustainabilityDifficult To Copy

Superior To Competitor

Sustainability Value Control Substitutability

It System No No No Yes Yes

Government Networking

Yes Yes No ? No

3 Stores System No No No Yes Yes

Everyday Low Prices

No Yes No Yes No

Regional Knowledge

Yes No Yes Yes No

Brand Equity Yes Yes (Locally) Yes Yes No

Corporate Culture Yes Yes No Yes No

Csr No No No Yes No

Local Suppliers Relation

Yes Yes No Yes No

Advantages Sustainabilty Relationships with both governments and

suppliers local knowledge Brand equity (locally)

To Wumart by B2 Consulting Ltd.

Use the current strengthsAdvantages: Sustainable Wumart advantages are local Can not be transferred to other countries Advantages are transferrable to other retail industries

Use the current strengthsSUGGESTIONS: Open new type of stores in China : specialized stores, fast

food… Target fast-growing cities, Tianjin, Shenzhen Communicate on their local heritage: both in existing and

new markets Implement corporate culture in franchises Strengthen relationships with suppliers and government.

Looking into the future: Maintain and increase lobbying Franchising existing stores and open new stores once local

knowledge has been gathered Brand extension: fast-food stores would leverage on brand

equity (Keller, Strategic brand management, 2008)

Challenges Time frame: Act really fast before competitors reach new

cities Some of Wu-Mart current advantages could be easily

copied: IT Systems, Everyday Low Prices, CSR.

WARNING:Their strategy has proved to be working in emerging markets, but it could be imitated.

Q & A

Bibliography http://www.slideshare.net/tslohsucram/sse-wumart-group11 http://www.slideshare.net/mynge/sse-wumart-group2 Collis & Montgomery, “Competing on Resources” http://biz.at0086.com/at_News/288/220695165416665.html Keller: Strategic Brand Management, 2008