Walmart has recently announced plans for expansion to China. Already a retail giant in the United States, they now hope to tap into a growing and potentially lucrative new market. However, such expansion is not without risks. Doing business in China is a much different environment than doing business in the United States for a wide variety of reasons. China is not a democracy, it is a one-party state that enforces strict restrictions on the press and on the Internet. Corruption is also a big concern among businesses that invest in China. Furthermore, the Chinese government has announced plans for a series of ambitious new reforms that add to the level of uncertainty and may change the business environment for international firms. These reforms include an increasingly high profile crackdown on corruption, reforms in regulations that impact the role of state-owned enterprises, freedom of migration to large cities, a decreasing role of state-owned enterprises, and many other reforms that may significantly change the business environment in China.
Read the following three articles and do some of your own additional research on Walmart and the new environment in China:
Best, D. (Oct. 24, 2013). China: Walmart emphasizes plan to still expand in China. Just Food Global News. [Available in ProQuest]
Evans-Pritchard, A. (Nov. 16, 2013). China strides towards free market future. The Daily Telegraph. [Available in ProQuest]
Chinas Third Plenum: A Primer (Nov. 8, 2013) Voice of America News [Available in ProQuest]
Chinas Bolsters Corruption Crackdown (Dec 13, 2012). Voice of America News / FIND. [Available in ProQuest]
Case Assignment
After researching these issues, write a 4 page paper answering the following question:
a? How will the new reforms in China impact the success of Walmarts expansion plans?
In your answer, consider the following issues:
A. The risks involved in expanding to Chinaa include political and legal risks as part of your answer along with other risks that you think may be relevant.
B. How specific aspects of Chinas reform plans and political changes will impact the business environment that Walmart will face. Include proposed regulatory reforms and the recent crackdown on corruption in China as part of your answer.
C. The potential benefit of Walmarts expansion to China.
Helpful Tips:
First read in-depth the background materials for Module 1.
a? Identify key concepts in the background materials, write a list, and study them.
a? Read the case in-depth and conduct additional research, if necessary.
a? Develop arguments by applying the concepts of international business from the background materials to Walmarts expansion plan in China.
Assignment Expectations
a? Answer the assignment questions directly.
a? Stay focused on the precise assignment questions; dont go off on tangents or devote a lot of space to general background materials.
a? List supporting references and cite sources in proper format. See this link for Tridents basic writing guidelines: Student Guide to Writing a High-Quality Academic Paper.
a? Optional Reading
a? Here are some textbook references for all useful for all modules:
a? Butler, K. (2012). Multinational Finance : Evaluating Opportunities, Costs, and Risks of Operations (5th Edition). Wiley, Somerset, NJ, USA [Available in Ebrary]
a? Ajami, R., Cool, K., & Goddard, G. (2006). International Business: Theory and Practice. M.E. Sharpe, Inc., Armonk, NY, USA [Available in Ebrary]
a? Rao, P. (2010) Introduction to International Business, Global Media, Mumbai, IND [available in Ebrary]