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Sse wumart group6b_2011

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  • 1. Wumart:China’s Rising Retail Star
    Erik Bywall
    Niklas Gilmark
    Robert Borowiec
    Pat Hulsy
  • 2. What are the sources of Wumart’s competitive advantage?
    Strong regional foothold in fast-growing Beijing region
    Extensive bargaining power
    Supplier relationships ensure lower price offerings
    Relationship with government
    Allowed quick and cheap expansion purchasing SOEs
    Political and philanthropic connections
    *Standard & Poor’s Compustat
  • 3. What are the sources of Wumart’s competitive advantage?
    Superior inventory management
    Methods developed by Zhang
    Technological prowess
    Multi-format store offerings
    These factors allow better position vis-à-vis foreign competitors
  • 4. How sustainable is Wumart’s competitive advantage?
    Wumart should enjoy continued growth within China vs. competitors
    Connections with government and local suppliers difficult for foreign competitors to copy
    Guanxi and understanding of Chinese tastes in fractured domestic market difficult for competition to crack
    Imitation difficult
    Purchase of local Chinese competitors vastly reduced domestic competition
  • 5. Will Wumart be able to extend its competitive advantage abroad or in other formats?
    Difficult prospects for international growth
    Competitive advantage is relationships and knowledge within China
    Competitors are bigger and already entrenched internationally
    Consultant’s suggestion: Focus domestically; if necessary, expand in areas with large overseas Chinese population to gain foreign footholds
    Growth in other formats
    Wumart has experience already in hypermarkets, supermarkets, and convenience stores
  • 6. What should Wumart do to sustain its performance?
    Challenges
    Vast resources and experience of foreign competitors
    International growth experience of Walmart, Carrefour, etc.
    Suggested response
    Due to urbanization and staggering economic growth in Chinese market, greatest opportunity is domestic
    Utilize competitive advantage in China
    Focus on extending ties with government and suppliers throughout China
    Continue policy of purchasing local Chinese competitors to further local focus