Key Points
- Responding to dynamic business challenges – strategically and operationally. Facing a rigorous competition, Chinese subsidiaries of Wall-Mart had to resort strategies that would increase their competitive edge and provide more perspectives for development and high profitability.
- Values-based leadership and the strategic focus on people. The new strategic management intervention has made a shift to new priorities. Specifically, health people and health food have become a priority.
- Creativity, innovation & dynamic change: more emphasis is placed on administrative, judiciary, and legal norms to introduce a fair and sound competition and increase sales through implementation of innovative approaches. Particular attention should be paid to the analysis of cultural diversity and its role in creating multinational corporations.
Analysis
Setting Goals. Because former executives of Wall-Mart failed to achieve growth in China due to fraudulent activities, including price deception and dates prolongation, the management changeover was necessary to re-evaluating the situations and understanding the reasons why the department store undertook critical situation.
In this regard, the interim CEO managers decided to pay close attention to political and administrative measures of controlling food safety. They have realized that the previous managers had underestimated the importance of mom-and-pop shops in china that significantly influenced price policy in global chains.
Presenting Action Plans. In order response to the critical situation, the new management team has established alternative concepts to follow. First of all, the Chinese department should be more oriented on global sales standards.
Due to the fact that Wal-Mart operations in China are relatively small, the accent on developing this sector should be significant. Only 2 % of global sales allowed the department to be the first largest retailer in the world after Sun Art Retail.
Next strategy implemented involves local adaptation of Wal-Mart department to the Chinese market. Reference should be made to changing the concept of “freshness” that differs significant from the American style of wrapping and delivering products. Third, retail store in China should be expanded to attract middle class target buyers.
Reviewing the Progress. Despite the presented problems, the recent annual report on Wal-Mart sales has presented significant growth due to the departments located in China, Mexico, and Brazil. In addition, the government has also been involved into the problem and has introduced strict measures for consumer-goods makers.
The government has also established new standards and bans for food production to prevent the introduction of unhealthy food.
Appraising Performance. Judging from the above-interventions and action plans, the implemented changes to management have been crucial for eliminating the existing crisis in growth. Management changeover, therefore, can contribute to the development of new, global-oriented polices.
Conclusion
The article under analysis presents a number of problems that can relate to the retail departments in other countries. In particular, failure to take the peculiarities of the national market, inability to identify the target market, and reluctance to introduce solid political and administrative rules led to the recession of the production and sales.
In order to eliminate unlawful and unethical actions carried out by the Chinese managers, the new executives and departments have introduced new managerial and ethical values that should lead the company to the renewal of process.
What is more important is that new managers should take into deeper consideration the corporate culture within the department. There is no doubt that global orientation is the key to successful operations and economic development of China.
In addition, ethical and cultural peculiarities of product introduction should also be considered to make necessary changes to the marketing process.
It should be stressed that the Chinese market is a very difficult place to navigate and introduce new international standards of marketing due to the reluctance of the nation to accept the ongoing changes to the global marketing.