Wumart Stores is a Chinese retailer that responded successfully to competition from Wal-Mart by leveraging its strong relationships with local governments and markets, prime store locations, and systematic distribution capabilities. While Wumart faces challenges from increasing competition and income disparities, it can sustain its performance by deepening existing strengths like local customer relationships and political connections, as well as developing its brand and using franchising.

1. CHINA’S RESPONSE TO WAL-MART Wumart Stores

2. Wumart’s Principle Resources & Capabilities Collaboration with Government Knowledge of and connection with local markets Relationship Network Strong brand name locally Prime store locations Systematic Management, Distribution Commitment to Information Technology Strong corporate culture

3. Appraising Wumart’s resources and capabilities Relative Strength Strategic Importance Superfluous Strengths Key Strengths Zone of Irrelevance Key Weaknesses 1 1 5 10 5 10 Local Brand Strength Knowledge of Local Market Store Locations Philanthropy Government Collaboration Relationship Network Distribution IT Commitment (Hypothetical only) Grant 2008

4. Transferability of Competitive Advantage Other countries: Unique market situation… Right place, Right Time Other retail sectors and formats: Domestic Political Connections

5. Sustaining Performance Challenges: Strong competition from domestic and international players Expansion Operating in a market with high income disparity Maintaining IT advantages

6. Sustaining Performance Deepen relationship with local market Customers Government Supply Distribution Further develop the brand Franchising Local leaders with political connections Entrepreneurs with financial resources