Strategy Implementation_WalMart

8/20/2019 Strategy Implementation_WalMart

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Situation analysis: Wal-Mart in U.S.

Company

Strong corporate culture: low-cost &customer;EDLP as value proposition;Very centralized management;Hypermarets mainly in small towns!

Customers Hig" disposa#le income;

P! #e"avior: $ew trips & #ig plannedpurc"ase;%rand loyalty;Processed $ood rat"er t"an $res"ness!

Competition'al-(art leader in )!S! Collaborators *ntegrated *+ systems wit" 'al-(art;Low #argaining power;Partners"ips;E,cient logistics!

Contexto union or legal #arriers;

Developed in$rastructure;.ut"orities not #locing!


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Situation analysis: Wal-Mart in China

Company

Strong corporate culture: low-cost &customer;EDLP as value proposition;Very centralized management;Hypermarets in big cities!

Customers*ncome disparity & consumption: ur#an Vs!

rural;Purc"asing #e"avior: many trips - littlepurc"ase;/omparing prices in di0erent s"ops;*mpulse purc"ase;1res"ness o$ t"e $ood;

S"opli$ting!

Competition*ntensi2ed competition;Local players dominating t"e maret;EDLP standard value proposition;Supermaret as t"e most common $ormat!

CollaboratorsLac o$ *+ integration wit"suppliers: purc"asing &distri#ution more di,cult!

ContextLocal Protectionism: ta3es;

*llegal +olls & lac o$ geograp"ic $rPoor *n$rastructure;La#or unions! & tig"ter la#or regul


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eterson, Management decision model

.daptativemanageme

nt

ScenarioPlanning

(a3imumsustained

yield

%uildresilience

u n c e

r t a i n t y

Controllability

Controllable Uncontrollable

H i g h

L o w

What is the next step…

ScenarioPlanning

Strategy: defning & implementing it (!"#


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Strategy: defning & implementing it

Scenario planning ( simplifed )…

$oreign business restrictions

Low High

H i g h

L o w

Culturalchange

%&'

)*+%SS'%

+%-%.UC)%).)P)'

/0

S)US1U/I love US!

Citien protest

Sticing to traditions

'e want )S out4

(2!"#


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)lternati3es

+ adopting a homogenous bm to local fit

+ usage of established /proven

channels

+ better fit for local needs

+ elimination of cross cultural problems

+ support of local authorities

- risky negotiation process M&A- non-usage of possible synergies

- against global/uniform strategy

+ higher decentralization (growth potential

+ follows !al-Mart global strategy (Me"ico

+ higher responsiveness to meet local needs

+ support of local authorities

- unions problem remain

- loss of control

+ no union problem

+ no change of value proposition

+ short time horizon

+ known losses

- not following global e"pansion strategy

- loss of the future market

- not following global e"pansion strategy

+no change of value proposition

+usage of synergies

-still union problems

-very long time horizon

-no possible short term measures

-ignore local disparities


Aggressive(local supermarket chain

Exit(!ithdraw from that market

Re-educate(educate chinese

Adaptation(changing store format

-4year

s

5-"year

s

6month

s

7 -5

years

(4!"#


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Scenario planning" .lternative selection

$oreign business restrictions

Low High

H i g h

L o w

Culturalchange

%&'

)*+%SS'%

+%-%.UC)%).)P)'

/0

S)US1U/

).)P)'/0

(8!"#


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Strategic +oad Map (5!"#Strategy: defning & implementing it

%9cient sta 5corporate culture6

;ey

Local autonomy5org! structure6

China co3erage5control org! size6

*uanxi5e3t! environment6

Strategic imperati3es


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Strategic +oad Map (6!"#Strategy: defning & implementing it

; e y

L o c a l

a u t o n o m

y

5 o r g ! s t r u c t u r e 6

% 9 c i e n t

s t a :

5 c o r p o r a t e

c u l t u r e 6

st year 2nd year 4rd year 8th year 5th year

#$%dentify change agent & involve

$'onvince & involve key stakeholders

$)upport from top-management

*$'ommunication

#$Adapt !al-Marts 'hina mission & vision statement to 'hinas culture

$'reate organizational chart (national, regional, local

$efine clear responsibilities & power for decision making

*$%ncentives to foster commitment

.$evelop profit centers

#$ onus and compensations system

$ 0erformance review system

$ 1raining

Critical initiati3es


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C h i n a

c o 3 e r a g e

5 c o n t r o l & o r g ! s i z e 6

* u a n x

i

5 e 3 t !

e n v i r o n m e

n t 6

Strategic +oad Map ("!"#Strategy: defning & implementing it

st year 2nd year 4rd year 8th year 5th year

#$2stablish budget for business related meetings

$'ontact & develop relationship influencer

$3etworking events4 'hinese 3ew year

*$evelop relationship with local 5overnment

#$Marketing research to understand needs

$1aylor product offering

$6aunch new supermarket format

Risks(a 'hinas 5overnment4 tighter restrictions to foreigner

(b 0roduct offering not aligned with local tastes4

Market research

enchmarking

0ilot trial with only a set of stores

-

Critical initiati3es


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+"an you $or your timeea

Strategy Implementation_WalMart

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