Discuss the nature of problems faced by retailers like Media Market in emerging markets like China.

International Business

Discuss the nature of problems faced by retailers like Media Market in emerging markets like China.

CASE STUDY (20 Marks)

The case discusses the entry of the Germany based electronics retailer Media Market into China and its subsequent exit from the country. Media Market entered China in 2010 after performing a feasibility study. Media Market opened a huge store in Shanghai in November 2010 to mark its entry into China. The store, spread over five floors, displayed and sold a wide range of electronic appliances of various brands. The products came with price tags attached. The store gained huge popularity and experienced high traffic. In China, electronic retail stores usually consisted of vendor representatives who promoted their own products. Customers could bargain and get the product at a lower price. This led to a highly chaotic environment in the stores. Media Market refrained from using this model and positioned itself differently from the local vendors. It did away with the vendor representatives and had its own salespeople manning the stores. The salespeople did not interfere with the customers and provided assistance only when asked for. To keep up the momentum, Media Market planned to open a second store in Shanghai. It inaugurated this store just a couple of days after the exit of US based electronics retailer Best Buy from China. Though Media Market’s first two stores were successful, it could not sustain the momentum. It could not open stores as rapidly as it planned to. Though customers appreciated the modern shopping experience at Media Market, they still preferred to shop at local stores as they could bargain and buy products at a lower price. Faced with high competition and high costs of operations, Media Market decided to exit the Chinese market in March 2013.

Answer the following question.

 

Q1. Discuss the nature of problems faced by retailers like Media Market in emerging markets like China.

 

Q2. Analyze Media Market’s preentry and entry strategies.

 

Q3. Examine the reasons that prompted Media Market to exit the market.

 

Q4. Analyze the retail industry in China.

Discuss the nature of problems faced by retailers like Media Market in emerging markets like China.

 

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