Wal-Mart: the New Predator on the African Continent

With reading WS Journal article, I was surprised that the author described Africa as a large source of potential growth. It could be my own ignorance to a middle class on the continent, but I'm taken aback by the amount of risk Wal-Mart is able to impart in Africa. I do, however understand the total wealth that comes from some resource rich countries such as Nigeria, Tanzania, Botswana or South Africa.

But who is supposed to be shopping at the new mega-retailers? Most of the wealth is trickled out the country through energy giants, such as Shell in Nigeria, who for decades never gave back jobs to local Nigerian who live in abject poverty.

-Colin

http://online.wsj.com/article/SB10001424052748704654004575518340229099562.html
"Wal-Mart Roars into Africa"

http://online.wsj.com/article/SB10001424052748703694204575518310750642140.html
"Wal-Mart Africa Trip Takes Well-Trod Path"

H&M to Slow Store Openings Amid Building Slump

H&M is the third largest fashion chain by revenue in the world, falling just behind The Gap and SA (a Spain-based store). The store has been steadily expanding and opening more stores in shopping malls around the world. I know, personally, that the three malls I have back home all have an H&M, and I also remember that when I was in Madrid there were H&Ms every couple of blocks. The point being, H&M is very popular, it serves men, women, and children and their ad campaigns can be found everyone and and very eye-catching. It comes as a surprise to hear that they are not opening up as many new stores as they had planned even though they've had quite the successful quarter with a 23% rise in profits. Some problems the company seems to be facing with opening more stores is reflected in dealing with expansion into the southern hemisphere, because of the reversal of the seasons, the company will have to reverse their sales process as well. This past term, sales were better than the company had predicted, but apparently the prices of their clothes were kept too low to make the significant profit. H&M is a very successful company, and it is likely that it will continue to be so and thrive no matter the economy.

Source: http://online.wsj.com/article/SB10001424052748704116004575521153400543746.html?mod=WSJ_Retailing_leftHeadlines

--Leah Stoltz

Department Store Targeting Generation Y

Department Stores are now targeting a new audience, which is now Generation Y. They are refocusing their marketing strategies to sell to the a wider range of consumers, a more technology based generation. Department stores are trying to go in the same direction as smaller store such as Zara, H&M, and Forever21 who have been expanding a lot more lately and have the popularity with those under 25. Department store are also making it easier for teens who only shop online because everything is supposedly “easier” online by creating their own chain on teenage stores and placing them strategically by the entrance of the store in order to make it easier for the targeted consumer.

This is another few ideas on how retail is adapting to the change in technology in order to survive. I was reading about how a teenage in college no longer wanted tog o out and shop because it was complicated to go to stores and put an outfit together, let alone walk through an entire department store, so people like her, or the Y generation is now affecting the change in retail.

Articles from: San Diego Union Tribune. September 25, 2010

-Sales fell 11 percent last year; decline expected to slow but continue

-Old-Line Department Stores Finally Go After Gen Y

-Jacky Meltzer

Signet Hires New CEO

     Michael Barnes, who is currently Fossil Inc.’s president and chief operating officer will be taking over Terry Burman’s position as the new chief executive of Signet Jewelers. He is starting to work as CEO when Mr. Burman retires on January 29^th. Due to his new job, Fossil is now looking for a successor to Barnes.  As Signet chairman Malcolm Williamson states, Mr. Barnes is a “seasoned and accomplished manager" and said he "will be an able successor to Terry Burman,”

     I believe that in order for companies to succeed, it is necessary for them to hire new CEO’s about every ten years. With new, intelligent individuals comes new and different ideas. I strongly suspect that Signet Jewelers will benefit from Barnes’s new position because he is not only talented with a “business” mind, but will bring new thoughts and propositions to the table. Would you agree or disagree that a change in chief executives is advantageous to a company? Also, a new CEO might attract more customers to the company. With improved ideas, they can think of different strategies to market their product. Thus, an addition of new executives can be extremely essential to corporations in today’s society.

View this at:

http://online.wsj.com/article/SB10001424052748704116004575521843110736192.html?mod=WSJ_Retailing_leftHeadlines

Posted by Tania Dabdoub 

The Power and Challenges of International Business

"China's leading sports-apparel makers," Li Ning Co., has made moves to begin selling its products in the United States. The Chinese company has made deals with divisions of Foot Locker Inc. to sell its shoes in the U.S. Li Ning Co. also has signed "a multi-million dollar sponsorship deal with Evan Turner, the college basketball player recently taken as the No. 2 pick in the National Basketball Association draft by the Philadelphia 76ers" and "already has endorsement deals with Shaquille O'Neal of the Boston Celtics." This was done to "increase its presence in basketball" because basketball is one of the most popular sports in China.

Although Li Ning Co. is working to build up its presence in the United States it also is focusing on over coming competition from Nike Inc. and Adidas AG in China. The power and scope of international business is exemplified in this case; a locally based company has to compete with larger foreign based companies. Li Ning Co. is finding it difficult to compete with such large companies as Nike and Adidas because they are so well known and have such a strong global presence that Chinese consumers chose their products rather than the products of the local company. Li Ning hopes to bring local loyalty to the company.

I think that Li Ning Co. will have difficulty marketing and gaining sales in the United States for the same reason it is losing sales in China; Nike and Adidas dominate the market for sports apparel. International consumer loyalty is invested in the well known brands Nike and Adidas. The iconic Nike swoosh might as well be the "face" of sports apparel. Nike and Adidas have built up a reputation and loyal consumer base that is difficult for any company in the same market to rival.

It will take some time for Li Ning to build up a presence and consumer base in the United States. Sponsorships with professional athletes is definitely a start, but escaping the dominance of international sports apparel behemoths, Nike and Adidas, will challenge Li Ning. I believe that it would better for Li Ning to start small and focus on certain regions of China in order to create a local, loyal consumer base first and then begin to expand to the rest of China, then to the rest of the world.

http://online.wsj.com/article/SB10001424052748704791004575519731522505118.html?mod=WSJ_Retailing_leftHeadlines

Vendors On The Green

         Starting on October 15^th, vendor food trucks will replace the famous Central park restaurant, Tavern on the Green.  They will serve a variety of foods, including homemade soups, dumplings, filet mignon, and tacos. Four food vendors will be replacing the area where the Tavern’s Crystal room once stood.

        This new, emerging strategy of selling food is so unique, which I believe will make it easier for them to be successful in this business. In central park, the only food vendors I am used to seeing are those selling water bottles and hotdogs. Now, with this new business, people will be able to buy exotic foods such as dumplings and soups. Because this food vendor is so different, it will attract a variety of people, for many love “change”. There aren’t many people I know that enjoy eating the same type of food every single day. People love spicing things up; many will be drawn to this for it is something new! Also, the food being sold at these vendors is a bit more “high-class”. Thus, maybe the majority of these consumers will be people with a higher status. With higher-class consumers, they can buy more and bring along their friends. This, in turn , will be great for their business because now they are attracting customers that can afford a lot of their food on a daily basis. Because they are the only food vendors providing this type of food, they don’t have as much competition. As I stated earlier, the only vendors in Central Park sell hotdogs and beverages. I believe with the location and with offerings of unique food, they will make a much bigger profit than those selling the usual hotdog. Central park attracts  a myriad of international tourists and now, those tourists might just be able to eat food from their hometown. This new business not only will attract all kinds of individuals, but will also add an international flavor to Central Park.

View this at -

http://eatocracy.cnn.com/2010/09/17/food-trucks-on-the-green/?iref=allsearch

Posted by Tania Dabdoub

Google v. Facebook in the Advertising Field

I know this might be a kind of a stretch when it comes to finding a new company in the retail industry, but I thought this was very interesting and can be applied. We're all so used to Google advertising to us depending on what we search. Those top couple links aren't actually the number one search, but companies who paid for their link to be placed at the top so that you might just click on it. It's quite a clever advertisement, but now it seems that companies are picking a different internet forum for these ads- Facebook. The (just over 5 years old) social networking site has added a new application called "places" where one can basically "log in" to a place they've arrived at. This promotes these places to create a facebook page and advertise on the space in real-time to users of mobile devices as soon as they log in. Google is seeing Facebook as a threat because it seems that people are using Facebook as the new Google, searching for local businesses and "what to dos." Facebook creates more of a personal and easier to access advertisement as well as making it more user friendly since thousands of people are on Facebook at all hours of the day already.

Article: http://online.wsj.com/article/SB10001424052748703791804575439740544880692.html

--Leah Stoltz