Question

Wal-Mart Case: Customer Profiling

1. Why has Wal-Mart been so much more successful than its competitors?
2. What market segment does its business model attract?
3. What is Wal-Mart’s competitive advantage?
4. Please list and explain all the factors that contributed to Wal-Mart’s failure
entering the Chinese market?
5. What mistakes did Wal-Mart make profiling their Chinese customers?
6. If you were the manager in charge of this international expansion, how would
handle this situation? Please provide a plan of action.
7. based on your analysis, what would you advise the Wal-Mart’s Board of Directors
to do? Should Wal-Mart remain in China or should they opt to withdraw from the
market?

Answer 1

Wal-Mart's success is attributed to economies of scale and cost leadership, which attract price-sensitive consumers. Challenges in China included poor customer profiling and understanding of local market dynamics. A localized approach would be key to future international expansion plans.

Step-by-step explanation:

Wal-Mart's Competitive Edge and Its Challenges in China

Wal-Mart has been much more successful than its competitors primarily due to its ability to leverage economies of scale, offering lower prices, and a wide range of products efficiently distributed through its strong logistics network. This business model primarily attracts a market segment focused on value and convenience.

Wal-Mart's competitive advantage includes its massive purchasing power, advanced supply chain, and cost leadership strategy. However, in China, Wal-Mart struggled due to various factors, including underestimating cultural differences, failing to adapt to local consumer preferences, and a lack of understanding of the competitive landscape, which were critical for customer profiling in the Chinese market.

As a manager in charge of international expansion, it would be vital to conduct thorough market research, customize product offerings to local tastes, build strategic partnerships with local businesses, and engage in community relations to better assimilate the Wal-Mart brand into the local culture. If advising the Board of Directors, I would suggest a reassessment of the strategy emphasizing localization and possibly continued investment if a viable adaptative strategy can be implemented, else a strategic withdrawal could be considered.