When Wal-Mart sent an advanced team of executives to China in 1994, they were tasked with researching this huge untapped market that offered over one hundred cities with populations of over one million. The external environment that was challenging Wal-Mart's expansion into the Chinese market was complicated. Wal-Mart opened its hypermarket designed to meet the needs of people in the new Chinese market. They couldn't simply adopt the US business model and expect it to last. During the research and development period, the management team in China examined cultural differences and how to bring unparalleled convenience to their new market. Many Chinese tend to shop on foot, living in small apartments with smaller refrigerators, forcing them to visit the store every one or two days. They also found that their new market was made up of more “hands-on” buyers. This comes from the open-air markets that many people are used to shopping at. Wal-Mart needed to understand how its employees' cultural differences would change their superstore operations. According to the text, Chinese people tend to have a high level of obligation to follow directions at work. This fit perfectly with Wal-Mart's style of "red shirts, mass applause, relentless pep rallies, and veneration of a deceased founder." However, Chinese consumers will not consume hot dogs and apple pie. They want their culture represented. Therefore, Wal-Mart has adopted a global geographic divisional structure. Wal-Mart could not offer the same items in Smallville, USA as in Mexico City or Chongqing. The global geographic divide has allowed the China region to adapt to the needs of consumers in that region. Offering Dong's chicken feet alongside Oreos and Gatorade is an example of this structure. Additionally, consumer attraction to “hype” has shifted toward pairing items like wine with Sprite. Wal-Mart also purchases about 10% of its products sold in the United States from China. Companies that join the global geographic divide typically seek low-cost manufacturing within the country, as well as meeting the needs of their customers. One problem with this structure is the autonomy of the division of each region. Wal-Mart needs a horizontal connection between their geographic regions. In this way, new products or operational ideas are not lost due to structural autonomy.
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