Sauder Student's blog

In fact, Wal-Mart is one of the most successful retail companies in US, but it failed to achieve triumph in Chinese market. In my blog, I discussed the factors which lead Wal-Mart to its peak of success in US market, but I neglect its shortcoming which presented in Chinese market. In ????’blog, his analysis about s and why it can not be very successful in Chinese market really capture my attention. It not only helps me to recheck Wal-Mart’s disadvantage but also create some new thought about the company. In his blog, he claimed that logistic problem is one of the reasons. In fact only two main supply chain which centre in Shenzhen and Tianjin lead to its increasing operational cost in China. In addition he argued it did not formulate proper international market strategy which suit Chinese local environments. Wal-Mart simply copy its own market strategy which failed to adapt to the local culture in China. In my opinion, Wal-Mart should not be too confident before it enters Chinese market. A business model seems perfect for one country does not mean it is flawless in any other countries. Also Chinese culture is mysterious and Chinese market thus become complicated. The company should really do plenty of marketing research before it reaches the Chinese market.

link:

https://blogs.ubc.ca/huayuzhou/2013/10/07/whats-wrong-with-walmart-in-china/

photo via:

http://graphics8.nytimes.com/images/2006/08/02/business/600-walmart.jpg

According to the article, Warmart and Target clearly understand what role they should play in the market, enhance advantage and avoid shortcoming, focus on specific and targeted customers; indeed they understand how to reach the market properly. However, although Kmart defined itself as “mass merchandising company that offers customers quality products through a portfolio of exclusive brands and labels,” customers has their own feeling, their own way to identify the company, and their own needs. If the company can not play an reasonable role in the market and meet the needs of its targeted customers, they will fail to stay competitive.

Undoubtedly, clear concept about how to position itself is significant for the company; however, low-cost structure is also a factor contributes to Wal-Mart’s success. In fact many company (such as Yasiya which is Chinese company) would like to spend lots of their capital on decorations and fancy advertisement in order to capture mass customers’ interest. Nevertheless, they will experience high-cost structure, which means customer and company will share the burden. If other better-control-its-cost companies emerge and the price of same products will present lower in the market, customers are keen of judgments and tend to choose the low-price products or service. As a result, those companies which fail to minimize their cost will lose their cost advantage and likely to be replaced other competitive companies.

link:

http://blogs.hbr.org/2010/12/why-cant-kmart-be-successful-w/

photo via:

http://www.therundown.tv/wp-content/photos/targetwalmartkmart3.jpg

In Yutong Xiong’s blog, he discuss the main reason of decreasing sale of LVMH is because expansion of store. My discussion on LVMH’ control-distribution strategy, which present in my blog, can also explain the fact of sale decreasing of LVMH. When the products only target on few cutomers(specially rich people), buyers who gain the bag will feel the product is valuable and obtain recognition and admiration.

However, Xiong did not investigate why Louis Vuitton experienced quick expansion in China. Indeed Chinese economy boost and the mainland market grow extremely fast. Although the gap between rich and poor has widened, more and more Chinese people become wealthy and upper-class. Undoubtedly the demand for luxury increase, and thus LVMH open more and more store in order to capture the opportunity. However blind expansion in order to maximize the profit lead to the lack of maintaining the image. It really cause the decline of the sales.

link:

 https://blogs.ubc.ca/xyutong/2013/11/13/louis-vuitton-loses-value/

photo via:

http://marketingtochina.com/wp-content/uploads/2012/05/louis-vuitton-shanghai.jpg

Many Chinese women think owing LV goods is the way to show status. Due to its unique and noble and stylish products, LVMH attract innumerable loyal customer and become extremely successful in Chinese market. Indeed one of the main reasons why Louis Vuitton becomes successful is its premium position. LVMH always focus on high-end market and meet customers’ needs of recognition; it also gives sense to the customer that they are the wealthiest people in the world when they own the LV bag; undoubtedly it seduce countless elite-class Chinese customer who need recognition and symbol of wealth. In addition, its exclusive distributions also contribute to its success. In fact LVMH does not scale up its productions to reach the mass market. Indeed, only few customers, especially rich people, obtain its product and thus consider the products as valuable and unique. In my opinion, the article overlooks the importance of its show-case strategy. In order to maintain its noble image, the company spend millions and millions dollars on design and decoration of LV show-case. It not only attract millionaires and nobles to purchase its bags, but also attract countless people (even if some are not rich) to view and admire its products. It really can create prestige and maintain nobility.

Link:

http://marketingtochina.com/louis-vuitton-in-china/

photo via:

http://static1.therichestimages.com/cdn/590/220/70/c/wp-content/uploads/2013/08/Louis-Vuitton-to-open-jewellery-flagship-store-in-Paris.jpg

According to the article of Nike, the owner of Nike Company, Carolyn Davidson, utilize their branding strategies, which help the company become a supper victor in the world of brands. Even though at the beginning the company was small and nobody believed Nike would become extremely successful at that moment, Davidson still insist to copyright the company’s name as well as the trademark. However the article does not clearly reveal the importance of copyright the trademark and brand name.

To begin with, the enterprise should really make effort to create customer loyalty. Undoubtedly loyal buyers can help boost the sales. Copyright and branding can help differentiate its products and service from its competitors; the company also can build a bond with its buyers and establish customer loyalty. In addition, without copyrighting the trademark, once the company expends and builds a good reputation, it is possible and easier for other people to counterfeit. This could affect the company from financial perspective and undermine the company’s reputation. Indeed, a famous trademark can really be benefited from stronger protection.

Link:

http://womeninbusiness.about.com/od/growingyourbusiness/ig/Successful-Branding-Examples/Nike-Branding-History.htm

photo via:

http://media.onsugar.com/files/ed3/192/1922729/51_2009/1b410ef573c36071_Nike.jpg

Thirty years ago, IBM achieved phenomenal success and seems unbeatable. However after a decade, IBM experienced a huge loss (8 billions) and was near death. Because increasing demanding customers and nimble competitors emerge, they seem to be defeated during the period of crisis. In order to tackle the hardship and re-earn prominence in the market, IBM figure out two noble experiences which play a vital role to help IBM re-birth.

Global thinking, which is its most valuable experience, helped the company find the way back. In fact globalization change many people’s insight about the world and seduces them to seek new way to fulfill their needs. If the company still clings to outdated operational strategy and adopts the old and outdated way to answer customers’ demand, it will easily lose advantage in the market or be likely to be replaced by other companies which develop significantly in order to adapt to new challenge and new opportunity because of globalization. In my opinion, even though customers become more and more demanding and picky, they hope someone can understand what they really need. If the company can correctly target the specific customers and design a right products which can satisfy their real need, their sales will undoubtedly increase in the competitive market. However it is not easy; to investigate customers’ satisfaction base, the company should aim at plentiful resource from marketing research when product is designed.

LINK:

http://www.forbes.com/2010/07/07/ibm-transformation-lessons-leadership-managing-change.html

photo via:

http://finalbullet.com/wp-content/uploads/2012/11/IBMlogo1.jpg