The document identifies six sources of competitive advantage for Wumart in China: brand image, technology, store formats, political connections, locations, and consumer insights. It analyzes which of these advantages are most sustainable in China. It recommends that Wumart focus on expanding carefully within China using various brands, committing to quality and fair prices, leveraging its political and business connections, introducing private labels, staying focused on customers, and innovating in its stores.

1. 1/23/2011 Stockholm School of Economics - Media Management 2011 1
Analysis of your
competitive
advantages
KegWimsey Consulting
Group 1b
Nadine Nordland, Sven Ahrens,
Anton Israelsson, Fredrik Kihlberg

2. Six sources of competitive advantage identified
1/23/2011 Stockholm School of Economics - Media Management 2011 2
1
Brand Image
Technology
Store Formats
Political Connections
Locations
Consumer Insights
• Strong on local market
• High bargaining power with suppliers
• Modern IT systems
• Thorough use
• High fit with 10$ average spending
• Necessary in Chinese retail landscape
• Access to prime locations
• Close to customer
• No car needed
• Deep understanding of buying habits
• Fast identification of needs/buying trends

3. Most competitive advantages sustainable in China
1/23/2011 Stockholm School of Economics - Media Management 2011 3
2
Brand Image
Technology
Store Formats
Political Connections
Locations
Consumer Insights
• People know and love Wumart
• Carrefour/Metro/Walmart unknown  time needed
• Easily imitable
• Buying habits change
• Competition could change hypermarket focus
• Establishing “face” is difficult and timely
• Patriotism
• Prime locations in Beijing are locked
• Easier access in other cities
• Chinese understand Chinese better

4. 1/23/2011 Stockholm School of Economics - Media Management 2011 4
What to do in
2011?
Wumart
Inhouse
Consulting

5. International expansion difficult
1/23/2011 Stockholm School of Economics - Media Management 2011 5
3
Brand Image
Technology
Store Formats
Political Connections
Locations
Consumer Insights

6. Expansion into other areas only with great care
1/23/2011 Stockholm School of Economics - Media Management 2011 6
3
• Brand dilution – watch out!
• Fast food?
• Electronic devices?
• High-quality supermarket?
• External expertise needed
• Market analyses
• Financial requirements
• Legal issues

7. Turn challenges into opportunities
1/23/2011 Stockholm School of Economics - Media Management 2011 7
4
CSR Imitation
Competition Buying Habits
1
2
3
4
5
6
7
Expand in China with
various brands
Commit to quality and EDLP
Play nice, play fair, and give
Use our network, both in
politics and business
Introduce private labels
Never forget our customers
Innovate in the stores

8. Bibliography
1/23/2011 Stockholm School of Economics - Media Management 2011 8
B
• Various presentations of MM 2010
• http://www.wumart.com, accessed via Google
Cache on 22 January 2011
• Collis & Montgomery, Competing on
Resources
• Regnér, Strategy-as-practice and Dynamic
Capabilities: Steps towards a Dynamic View of
Strategy