In the first class in Intensive in American Business, we discussed the reading assignment John D. Rockefeller and the Modern Corporation in Forbes. During the discussion, the professor mentioned Wal-Mart, a well-known retailer that owns large supply chain as The Standard Oil Company did to achieve its success. Being the largest retailer in the world, however, Wal-Mart may be relatively unfamiliar to students like me from Taiwan since it does not land here even though it planned to do so.
In fact, it was actually my trip to China several years ago that makes my first reach with Wal-Mart. And after the class, I started to wonder, with the outstanding supply chain system, how and why could Wal-Mart stop its step developing in Taiwan? Does this fact mean that a nearly wonderful supply chain doesn’t mean everything in market? So, does this also show that maybe under certain circumstances, Rockefeller and his company cannot accomplish such success? Save Money. Live Better.
Wal-Mart, the largest retailer in the world, owns a huge supply chain as The Standard Oil Company did, which enables Wal-Mart to provide the cheapest products to its customers and makes its success. As The Standard Oil Company broaden its supply chain by from setting up barrel-making operation to controlling transportation problems including terminal warehouses and pipeline networks, Wal-Mart combines the supply chain from transporting and delivering to ordering and purchasing, which largely reduce the logistics costs and allow Wal-Mart to supply customers with the best price.
To be more specific, for example, when linking up the suppliers, Wal-Mart provides them a system that can be directly entered by suppliers so as to realize the selling situation, predict the demanding amount of products, and decide the producing amount. In this supplying chain, Wal-Mart ought to make the whole supplying chain a very smooth, fluent, and steady one to save much money. Dedication to Charity However, like the resistances Rockefeller had encountered owing to the monopoly of the market, the protests against Wal-Mart are also occurring in not merely America but the world.
For instance, a documentary named WAL-MART: The High Cost of Low Price points out several disadvantages brought by this huge retailer such as cheap labors without insurance and welfare, bad working environment and, what may causes the most attentions of other similar industries, the opportunities being taken away by Wal-Mart from local small-scale industries. Probably because of this, in my personal opinion, Wal-Mart dedicate to charities to make the public think that it do carry out corporate social responsibility and to increase the reputation so that they can eliminate, or at least decrease, the protest against it. Both Rockefeller and Wal-Mart actually fail to entirely assuage public resentful though. ) Wal-Mart in Taiwan So, the problem that attracts my attention most is that in my home country Taiwan, we have certain wholesalers like Costco and Carrefour and retailers like Wellcome and PXmart. Nevertheless, Wal-Mart, the largest retailer in the world, has never landed here even though it had planned to develop from the southern part of Taiwan by merging. Why? To my personal viewpoint, there are two main reasons of this condition basing my observation and analysis.
First, the market for no matter retailing or wholesaling in Taiwan has already saturated. Even Carrefour, the market share champion in wholesaling in Taiwan, is having difficulties in its expansion. Not to mention the earlier comer Costco who has dominated the market of import goods. When most people in Taiwan, like my family, intend to buy plentiful imported goods, they would most likely opt to purchase at Costco. If Wal-Mart, a similar store to Costco, enter the market in Taiwan now, people are certain to compare both of them.
And it is likely that customers already have their loyalties and would tend to choose Costco, the store they are used to instead of Wal-Mart, the one that they are still unfamiliar with. Consequently, only when Wal-Mart supplies some exclusive businesses or comes out with other attractive strategies can it be competitive and able to compete with the wholesalers that are already in Taiwan now. In addition, because of the geographic reason in Taiwan, which is a comparably small island with crowded people, it seems that it is more suitable for small supermarkets to thrive here.
For one thing, the cost of the estate here would be expensive since Wal-Mart is undoubtedly required to own a vast place for it to be built. What’s more, it is not that necessary for people in this crowded island to drive far away to buy groceries. Instead, they can simply walk to the supermarket around the street corner near their homes. For example, popular retailers, especially PXmart, claims to provide the cheapest price to their customers and that by the VIP system, customers can become VIPs for free and save every dollars in each of their purchase.
Sometimes the prices are even lower than the ones in wholesale shops such as Costco. Moreover, they open like almost anytime and anywhere. That is to say, people in Taiwan do not actually have that much demand on the existence of such a large market place like Wal-Mart. Currently, Wal-Mart finally converts its concentration to the expansion of the relatively potential market in China. In sum, in my point of view, even though Wal-Mart owns a complete and beneficial supply chain system that operate well in the U. S. nd many part of the world, it is not an a-hundred-percent promise to guarantee that it will work no matter when and where. The conditions in the market, the consumption habits of customers, and the competitors of yours are significant considerations as well. In other words, it is always essential for businesses to evaluate the market circumstances before they invest their money in a new place. (WAL-MART: The High Cost of Low Price teaser trailer on YouTube: http://www. youtube. com/watch? feature=player_embedded&v=hiSmlmXp-aU)
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