Wal-Mart's expansion model:
Summarizing Wal-Mart's successful experience in expanding overseas markets, including China, is to effectively combine the global management system with the localized operation system and achieve success. The main methods are as follows:
1. Select products: select one or several product series as the vanguard of globalization.
2. Choose the market: through careful analysis, choose the right market.
3. Choosing the way to enter the market: After selecting the target market, the enterprise should determine the ratio of export products to local production.
4. Transplant corporate culture and experience: bring the business model of the enterprise into the target market.
5. Win the local market: estimate the requirements and actions of local customers, competitors and the host government, and make corresponding adjustments and responses.
6. Gain hegemony: In the end, horizontal mergers and acquisitions will be implemented with absolute advantages, and low-priced competitors have no room for bargaining.
Wal-Mart localization steps:
For Wal-Mart, an important reason for its success in the highly competitive retail market in China is its better localization. To sum up, there are two steps for Wal-Mart to localize and win the local market:
1) Understand the local situation and determine the scale and content to be localized;
2) Respond to the actions and reactions of local competitors.
Experience of Wal-Mart in China:
Localization is the guarantee of Wal-Mart's internationalization. His practice in China best verified his strategy:
1) In order to cater to the habits of China people, the opening of a hypermarket refers to a giant hypermarket with diversified commodities under one roof, ranging from mass consumer electronics to daily groceries. Wal-Mart has three different business forms in China: Wal-Mart Shopping Plaza, Sam Member Store and Wal-Mart Community Store. In China, different combinations of stores are used according to specific market conditions.
2) Localization of management team. Wal-Mart understands that to truly realize its global expansion strategy and take root in China, it must resolutely implement its localization strategy. Talent localization is the management foundation of Wal-Mart. Local employees are familiar with local culture and living habits. You also know how to save costs in operation, so the localization of personnel and management can enhance the competitiveness of enterprises. At present, foreign managers in Wal-Mart's China headquarters account for% of the total employees in China, and they are developing in the direction of localization. According to the business development trend, the company strengthens professional training and appoints excellent local business managers for management.
3) Localization of procurement. "Purchasing China" is a part of Wal-Mart's development strategy in China. Localized procurement can not only effectively save costs, but also promote relations with local governments and business circles, killing two birds with one stone.
4) Localization of operation mode. Wal-Mart's localization strategy in China has achieved initial results. In recent years, in addition to training talents in China, Wal-Mart has been making adjustments to adapt to the China market. Recently, Wal-Mart's newly opened store has changed a lot from its original store in China. The scope of adjustment includes not only the product structure, but also the mode of operation. Wal-Mart's newly opened stores in Shenzhen Overseas Chinese Town and Dalian have counters, while foreign-funded Wal-Mart stores have no counters.
5) Localization of store layout. Wal-Mart pays great attention to skills in store layout and product promotion, which can cater to consumers' psychology well. In addition, the price advantages of some international brand goods are also very obvious. Wal-Mart has been making adjustments to adapt to the China market, including not only its product structure, but also its business model. For example, setting up counters has changed from the initial shopping plaza to the current hypermarkets and community stores. Wal-Mart implements multiple formats simultaneously, forming a pattern with large supermarket stores and member stores as the "outline" and small but numerous community stores as the "target".
6) The decoration is simple and unpretentious, rejecting flashiness and striving to build low-cost competitiveness-global brand network. Due to the fierce competition in China, some retailers try to create a more attractive environment in their stores by installing high-grade floors, very spacious passages and exquisite ceilings. These characteristics not only make the investment per square meter of sales space almost double, increasing the cost, but also mislead the price-sensitive consumers in China, making them think that the prices offered by retailers are very high. Wal-Mart will reduce costs through simple and simple decoration, spend more money on the display of new products, or add additional cashiers at the cashier's office, which is naturally more acceptable to consumers.
7) Refuse to be ambitious and open stores of different sizes and types in different locations. For big cities, the population density is high, and the general store scale is large, while small and medium-sized cities have low population density and income, so they need small and medium-sized stores with low supporting facilities. Wal-Mart has launched three formats in different markets, including Wal-Mart Shopping Plaza, Sam Member Store and Wal-Mart Community Store.
8) Depending on the location, the goods sold in the store are also different. If the store is close to the business circle, it will generally provide more commercial supplies, but less daily necessities. And if it is closer to residential areas, it will provide more daily necessities. By grasping the people in different places, we can provide more targeted goods instead of simply implementing unified distribution.
9) Flexible localization attempt. Wal-Mart has made many attempts in China market to find the most popular store form. One of them is the Shenzhen Super Shopping Center, which adopts a mixed form and combines the characteristics of commercial centers and warehouse shopping stores. It not only adopts membership sales, but also provides "special goods for the day" to non-members. In addition, Wal-Mart has set up some smaller satellite stores for experiments, trying to grasp the development trend of China's traffic and shopping and adapt to the shopping habits of China people. Moreover, Wal-Mart, like the retail enterprises in China, has also extended the payment period for suppliers-the payment settlement period for suppliers has been extended from the previous 3-7 days to next month. Wal-Mart's localization strategy is part of its global expansion. Only when it is completely localized can it be connected into an international multinational enterprise, which is the Excellence of Wal-Mart.
The essence of localization is to better understand consumers' consumption habits and needs. Only by meeting the consumption habits and needs of consumers can enterprises survive and develop better. Wal-Mart and other foreign-funded retail enterprises have grown stronger through localization and are gradually in an advantageous position in the fierce retail market competition. For domestic national retail chain enterprises, we should learn from some advanced experiences and systems of Wal-Mart and other enterprises with an open mind to learn from each other's strengths. At the same time, combined with its own advantages, we will continue to innovate and develop. Only in this way can China's retail enterprises survive better in the competition with multinational chain giants.