Mini-Case on Sam’s Club (Chapter 3, pages# 91-92, Question 1)

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MINI-CASE ON SAM’S CLUB Kevin Fey/Shutterstock SAM’S CLUB IS BOOMING IN CHINA Sam’s Club in the United States has struggled to attract affluent shoppers. However, in China, Sam’s Club targets high-income consumers, and specifically affluent mothers with young children. Sam’s Club does a great job at positioning itself for the wealthy Chinese target market. Advertised as a trusted place with imported goods and high-quality foods, Sam’s Club stores are located in China’s most affluent cities. Its success thus far in China can be attributed largely to its cffective market seg- mentation, targeting, and positioning, Many large firms have trouble doing business in China despite the country’s high GDP, rising levels of disposable income, shift to becoming a high-tech nation, and growing middle class. But Walmart’s Sam’s Clubs are booming in China. Three of the top five Sam’s Clubs by sales are located in China. Rather than positioning itself as a place for bulk items and closcouts, Sam’s Clubs in China are positioned as a place for high-quality products and foods. For example, eggs are guaranteed to be less than 12 days old and all have a serial number that customers can enter into their smartphone and see the production date and origin. Sam’s in China benefits from not having to do battle with Costco Wholesale; Costco does no business in China. Sam’s has roughly 2 million members in China, many whom are affluent momsage 35 to 40, a primary target group. The number of Sam’s stores in China is expected to increase from 20 at the start of 2018 to 40 by 2020. Sam’s in China recently provided “two-kid seat” carts in all stores to take advantage of China recently relaxing its “one-child policy.” Another feature of Sam’s stores in China is extra large parking lots: nearly all customers drive to Sam’s and ample parking is greatly appreciated in a country where crowded and expensive parking is the norm otherwise. Sam’s strategies in China are an excellent example of how a fin must adapt it policies, procedures, features, and actions when it enters a foreign land to capitalize on extemal opportunities and threats in that country. What works in one country quite likely needs changing in another, pushing the same business model globally has spelled doom for many firms that enter China, and then soon withdraw. Questions 1. Consider the following two-dimensional matrix with weights on the y-axis and ratings on the x-axis, as given in Figure 3-5. What are example opportunities and threats that could possi- bly characterize Sam’s Club in China in the four corners of the matrix ? Develop a hypotheti cal opportunity and threat for Sams’s that could be positioned in each of the four corners of the matrix. Give a supporting rationale for each factor. Which corner of the matrix do you think characterizes factors most commonly in an EFE Matrix? Why? Which comer of the matrix do you think characterizes factors least commonly in an EFE Matrix? Why? What could you say about the middle of the matrix in terms of factors commonly included in an EFE Matrix? High RATINGS Low High Opportunity 1 Opportunity 2 Threat 2 WEIGHTS Middle Opportunity 3 Threat 3 Opportunity 4 Threat 4 FIGURE 3-5 A Weights-by-Ratings Matrix to Exemplify EFE Matrix Logic Note: A purpose of this mini-case is to give students practice thinking about when, in developing an EFE Matrix, could a particular factor receive the following weights and ratings 1. a low weight and high rating 2. a high weight and high rating 3. a low weight and low rating 4. a high weight and low rating Source Based on Wayne Ma. “In China. Sam’s Goes Up Market and Scores.” Wall Street Journal, December x 2017 BI.

Mini-Case on Sam’s Club (Chapter 3, pages# 91-92, Question 1)

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