Walmart in China

2012 第 15 屆科技整合管理研討會 June 16, pp1-17

Culture Implications for the Operations StrategyWalmart Experience in China
Ming-Ling Chuang1 James J. Donegan2 Michele W. Ganon3

Abstract
Many multinational corporations are aware of the topology of the Chinese market, what they lack is an in-depth understanding and the skills needed for effective operations. The paper describes the challenges faced by walmart as it attempts to replicate in China their lean retailing successes elsewhere in the world. Walmart has so far failed to extend their oligopolistic dominance to the Chinese market. We identified some issues: (1) the formation of partnership alliances and their impact on store location choice; (2) the effect of under-developed infrastructure on distribution and logistics; (3) the unique Chinese business culture - GuanXi (using social capital to build business relationships) and its influence on supplier relationships; (4) the variety of consumer behavior and its effect on procurement and sourcing; and (5) an immature information technology environment which impedes information sharing between supply chain partners. While walmart had some degree of success, it has not been able to match the combined growth of their larger Chinese competitors. Walmart faces significant obstacles as they challenge China’s largest domestic retailers. Keywords: Chinese Business Culture, Cross Culture, Supply Chain Management, Chinese Retail Market, Operations Management

I.

Introduction
China’s hosting of the 2008 Olympics in Beijing was a celebratory demonstration of the

progress made by the People’s Republic over the last three decades. Moving from a stagnant, under-sized, centrally planned economy to the most vibrant in the world, China today is both a gargantuan exporter of manufactured goods and the fifth largest consumer market. Since the economic reforms begun under Deng Xiaoping in 1979, China’s economy has continued to grow at a rapid and steady pace. The average

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