The economic basis of Wal-Mart's branch expansion lies not only in its use of the huge space for the development of the circulation industry, which caters to the trend of the retail era, but more importantly, it attaches great importance to the promotion of its core competitiveness, so as to make full use of the brand, unified business model (organizational system) and modern information technology to realize the "replication" and "selective intervention" of the branch.

The first is the brand foundation. The predecessor of the brand is just a special mark branded by people on their own property (cattle, sheep, farm tools, etc.). ) in order to clarify private property rights. Only by the development of exchange economy can the logo become an economic promise and signal: if there is a problem with the product quality, you can claim compensation from the seller according to the logo. Sellers use their unique signs to distinguish their competitors' products. Once a trademark has established a good reputation in the market, it can effectively promote subsequent transactions and expand the scope of transactions. There is a huge scale economy implied here, which urges individuals (or organizations) in the exchange economy to "invest" in labels constantly, thus leading to a fundamental change: labels originally used only to clarify property rights have changed into brands as intangible assets. The emergence and development of brands and the economies of scale implied by brands mean the natural expansion of brands. Almost all large international circulation enterprises are using their powerful circulation brands to expand globally. Wal-Mart deeply understands and attaches great importance to brand building, and always puts the interests of customers first. Sam walton taught employees two lessons: ① The customer is always right; (2) If the customer is wrong, please refer to Article 1, Wal-Mart's "low price every day" policy, which has gained worldwide reputation. In addition, Wal-Mart also strengthened its brand through public welfare sponsorship. After just eight years in China, the accumulated charitable donation has exceeded 9.6 million yuan, and in June 2004, it won the first Guangming Public Welfare Award (Best Community Award for Multinational Corporations) issued by Guangming Daily. Wal-Mart's own brand building and a large number of news media rendering will help Wal-Mart form a strong circulation brand and expand its branches.

Secondly, it is the basis of a unified business model (enterprise system). A unified business model or management system is the basic content of "replication" of Wal-Mart stores. In fact, the system is just a series of norms that restrict and motivate people's behavior, including both formal laws and regulations and informal culture and habits, but the core element of the system is people. For enterprise organizations, its institutional efficiency mainly lies in the management and encouragement of employees, and the incentive efficiency can comprehensively reflect the management level of enterprises. In the early days of the company's establishment (1960s), sam walton always believed that wages, as the main cost, would inevitably conflict with the policy of "low prices every day", which led to the tension of trade union strikes and the deterioration of labor relations. In 1970s, Wal-Mart began to transform the employment concept into the cooperation concept and put it into practice. The average annual profit shared by employees is close to $654.38 billion. Allow employees to buy shares of the company at a price lower than the market value 15% through salary deduction; Announce the profit, purchase, sales and price reduction of the store to all employees; 100% of the chairman received petitioners; Grant ordinary employees certain decision-making power; Try to promote the manager from within. More than 60% of Wal-Mart's managers started as hourly workers. Li Scott, who became the president of the company in 2000, has worked for Wal-Mart for 22 years. Wal-Mart's cooperative corporate culture keeps the management cost of the whole company at about 2% of the total sales, while the industry average is 5%. The loss rate of commodities is maintained at around 1.2%, while the industry average is 3%-5%. Wal-Mart's amazing management performance is inseparable from its cultural concept that employees are "first-line customers". Of course, Wal-Mart's management system in other aspects is also quite perfect, such as the distribution of decision-making power between superior and subordinate, procurement, logistics, finance, service and other systems, especially its perfect logistics procurement system, so that its procurement cost only accounts for 3% of the total cost of goods, while the industry average is 4.5%-5%; The supply ratio of distribution center is 85%, while the industry average is only 50%-60%; The average replenishment time is only 2. Days, while the industry average is 5 days (Jerome Giles, 2004). These systems and business models can be "replicated", and this "replication" is not only suitable for adding new branches, but also for system reengineering after merging other stores. In fact, Wal-Mart stores around the world are unified in many aspects, such as business philosophy, business slogan, management system, and even store design, employee clothing, polite language and so on. The expansion of Wal-Mart stores is more like a "copy/paste" process.

Wal-Mart's China Risk

Wal-Mart (China) has cut prices for the third time since it started the price reduction promotion in May 438+February last year. As a global chain retail giant, Wal-Mart's price reduction promotion has naturally attracted much attention.

How should we evaluate Wal-Mart's price reduction promotion and predict its strategic future?

For Wal-Mart, the crisis is an opportunity for development.

The latest issue of Barron's Weekly writes that whenever the American economy is hit hard, Wal-Mart can get development from it.

In the first quarter of 2008, the price of crude oil soared to more than $0/00 per barrel, and the price of gasoline exceeded $3 per gallon. Rising energy prices mean rising prices and living costs, and consumers are more inclined to go to Wal-Mart to buy cheap goods. In the first quarter of last year, Wal-Mart's share price rose by 65,438+00%, making it one of the best performing stocks on Wall Street.

When the financial tsunami broke out, the federal government used tax rebates to stimulate consumption, and each American family could get an average tax refund check of $65,438+0,250. Usually, Wal-Mart is the first choice for American families to cash tax refund checks.

Investment banks and brokers raised Wal-Mart's stock price expectations.

JPMorgan Chase even published a research report saying that Wal-Mart has three positive factors: First, the psychological satisfaction of Wal-Mart consumers has begun to improve, and the improvement of consumer satisfaction will help Wal-Mart's sales when the store retail is obviously better than before. Second, the loss of profits in the international market will be conducive to the expansion of the overall scale, especially in Japan. Third, the repositioning of asset allocation will significantly improve the cash flow and return on investment in 2009.

Wal-Mart's three-wave price reduction promotion in China seems to echo Wal-Mart's headquarters at a distance, verifying Wall Street's prediction.

Chen's Walmart (China) Revolution

Wal-Mart is not invincible. In 2006, Wal-Mart successively withdrew from Korea and Germany. In the Japanese market, despite years of expansion, the performance is not good.

Wal-Mart, which entered China from 65438 to 0996, has been in a downturn in China. Compared with Carrefour and Trust-Mart, its expansion speed is very slow. When Wal-Mart acquired Trust-Mart in 2007, the number of Wal-Mart stores was only 73, while the number of Trust-Mart stores in China during the same period was 10 1 home.

Chen took over Wal-Mart (China) in February 2007, which changed the traditional style of Wal-Mart and made a thorough revolutionary change. Chen's revolution generally includes three aspects:

First, high-level exchange of blood, middle-level layoffs and slimming; The second is to change the past "everyday parity" into regular discount promotion, push "special goods" and fight price wars; Third, the pace of expansion has accelerated.

In 2005, Wal-Mart opened 13 stores in China and 15 stores in 2006. In 2007, the speed increased significantly, reaching 23, and 20 new stores were opened in 2008. It is reported that in the next few years, Chen's goal is to open 50 stores every year, with total sales reaching 654.38+00 billion.

In 2007, Wal-Mart's sales in China (including Trust-Mart) were RMB 26,543.8+RMB 300 million. It is conceivable that Wal-Mart (China) will open new stores and conduct mergers and acquisitions very frequently in the future if it wants to achieve its goals.

Wal-Mart (China), Dancing on the Blade?

There is no doubt that Wal-Mart has brought advanced business model and business philosophy to China. It has brought management support to more than 20,000 suppliers in China and trained a large number of small and medium-sized enterprises. Only by improving cost control, quality management and logistics supply chain management can enterprises become suppliers of Wal-Mart. Wal-Mart does not adopt the usual result management of domestic enterprises, but adopts process management based on data analysis. It always helps its suppliers and logistics partners to provide suggestions for improving the process.

The question is, where is the basis of Chen's rapid expansion and big price war?

I admire his predecessor, American Joe, more than Hong Kong resident Chen. Perhaps China truly abides by Wal-Mart's core ideas and basic values.

As an airborne soldier, Chen parachuted into Wal-Mart on June 5438+065438+ 10, 2006, and took over from Zhong in February the following year, taking charge of Wal-Mart's business in China. Previously, Chen worked as an executive in Hong Kong Milk Group.

Before retiring, Zhong admitted that Wal-Mart's business expansion in China lagged behind Carrefour for three reasons: first, suppliers; second, logistics system; and third, talents.

In terms of logistics cost, Wal-Mart's logistics cost in the United States is 4%, while it is as high as 16% in China.

How can Wal-Mart (China) effectively reduce costs and support its price war? This is a big question about Wal-Mart's core values!

Wal-Mart's China Risk

To be fair, Wal-Mart (China) has many ways to reduce costs. Lower supplier prices, delay payment, close rent, etc. Can be a means of pre-selection. Just like Gome and Trust-Mart.

Take Gome as an example. In 2008, its total payable to Kelon was as high as 70 million yuan, and its payment to Skyworth was generally close to this amount.

With the strong brand of Wal-Mart, suppliers simply don't have much bargaining power, so they can completely occupy the funds of suppliers for low-cost expansion and realize the rapid growth of Wal-Mart (China).

The advantages of chain retail such as Wal-Mart lie in three aspects: first, the size of stores (single store), second, the size of chain stores (there are enough chain stores), and third, the efficient logistics distribution system. These three advantages eventually lead to low cost and low price. But this is America.

In China, most local retail chains operate in debt, using bank loans and suppliers' funds to maintain false prosperity. If all the bank loans and payables are invited, it may not last a day.

Therefore, it is simply wrong for Wal-Mart to promote industry reshuffle through price war in China. This value chain in China is very distinctive. Strong channel providers owe money to manufacturers, strong manufacturers owe money to parts suppliers, and those small and medium-sized parts manufacturers owe workers wages and social security benefits.

When Wal-Mart's price war continues, you also find that many peers can accompany you shopping at a price below the cost. It is Wal-Mart itself that can't persist.

The future, the return of core values

Wal-Mart's success is attributed by domestic critics to its ability to control costs. This is not comprehensive. In fact, Wal-Mart's success is created by the interaction of two factors: the first is its excellent business model, and the second is its faithful implementation of the core values of corporate social responsibility.

We usually think that Wal-Mart is very harsh in price negotiation, but we don't pay much attention to its corporate social responsibility inspection mechanism and factory inspection system. No matter how much profit it will bring to Wal-Mart, you will never dare to touch low-priced labor reform products and child labor products. Its ex-factory inspection indicators include environmental protection, labor protection and work safety.

Once sweatshops, child labor products and reform-through-labour products are involved, powerful non-governmental organizations, media and churches will launch a boycott movement, and Congress may hold a special hearing, and you will be condemned.

In fact, Wal-Mart, Hewlett-Packard, Apple and Nike all need to walk a tightrope between performance and social responsibility.

I have no doubt about Chen's fighting ability. He can expand at low cost and high speed, and he is fully qualified to launch a price war and achieve beautiful short-term results. He can pass on the extra cost generated by the price war to the supplier. When suppliers can't bear the cost pressure and don't want to lose Wal-Mart's orders, they are often the most prone to accidents.

Maybe this is why Zhong is conservative.

Today, with great pressure on performance, what Sam, Arkansas needs is turnover and profit. When NGOs are in full swing, SAMs will find it is time to return to core values.