International Business and Global Marketing
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Walmart has recently announced plans for expansion to China. Already a retail giant in the United States, the company now hopes to tap into a growing and potentially lucrative new market. However, such expansion is not without risks. Doing business in China is a much different environment than doing business in the United States. Furthermore, the Chinese government has announced plans for a series of ambitious new reforms that add to the level of uncertainty and may change the business environment for international firms.
Read the following two articles and do some of your own additional research on Walmart and the new environment in China:
Roberts, M. (October 24, 2013). Walmart China Expansion Aims to Tap Urbanization, Business Week, http://www.businessweek.com/articles/2013-10-24/walmarts-china-expansion-aims-to-tap-urbanization
Yao, K., Blanchard, B. (November 15, 2013) China unveils boldest reforms in decades, shows Xi in command, Reuters, http://www.reuters.com/article/2013/11/15/us-china-reform-idUSBRE9AE0BL20131115
How will economic reform in China impact the success of Walmart's expansion plans?
In your answer, consider the following issues:
A. The risks involved in expanding to China
B. How specific aspects of China's economic reform will impact the business enviornment that Walmart will face
C. The potential benefit of Walmart's expansion to China
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Solution Summary
A review into global marketing and business operations in China to reach success.
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How will economic reform in China impact the success of Walmart's expansion plans?
Mainly, the strategy for large corporations such as Walmart relates toward continuing business in China due to the advantage of connecting with the targeted consumer base. Also, the companies within the competitive marketplace of Walmart and not within the same marketplace still consider China as promising avenue for investments, basically, the hurdles of economic reform is a challenge for most but still offer potential for large profits. Consider the main reasons for corporations to expand into global marketplace that reinforces a mission to reaching desired goals for increasing brand identity through economy positioning for long-term success.
Thus, Walmart's expansion plans offer the primary objective for facilitating the increasing of brand identity long-term within the global marketplace. China is one of the most emerging global markets in the world with the largest economy, mainly due, to the billion consumers of people seeking products. Therefore, the strategic move by Walmart is on par to reaching the targeted goal suffices in entering into China consumer marketplace. Some key areas that should consider in the final resourced entails the unpredictability and the predictability in conducting business in the China global marketplace:
1) The labor market for manufacturing products is much cheaper than in other countries on the global marketplace (Try and consider that Walmart weighs the pros and cons to considering the overall operations costs within the foreign marketplace compared to another, such as, in the United States with higher wages)
2) The Chinese economy continues to grow towards a way that attracts companies to sustaining in the market to increasing their brand identity = brand equity = enormous profitability long-term - over time. According to Time Inc (2013), the Chinese economy continues to grows amidst changes and restrictions in some categories, such as, the ...
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