B&Q's Strategies in China
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Case Details:
Case Code : BSTR245
Case Length : 11 Pages
Period : 1999-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : B&Q
Industry : Retailing
Countries : China
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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In December 2001, China began to implement WTO requirements and so the Chinese
government introduced policies allowing in foreign investments in industrial as
well as retail sector. Realizing the huge potential of the Chinese home
improvement market, B&Q went on an expansion spree from 2002 onwards. As of
November 2006, the company had 52 stores across China.5 However, industry
analysts have expressed doubts as to whether B&Q's expansion in China will be
successful as the company faces fierce competition from domestic as well as
foreign retailers in the home improvement industry. As of late 2006, B&Q was
broadening its product portfolio to include home appliances and soft
furnishings, in an effort to maintain an edge over its competitors.
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Background Note
B&Q was set up in 1969 by Richard Block6 and David Quayle (Quayle). The first
store, a 3000 square foot self service home center, was in Southampton,
Hampshire, UK. It sold various home improvement products for use in the home,
garden, car, etc. In the UK, home improvement stores are commonly known as
Do-It-Yourself (DIY) stores, as customers fit the product together themselves
after buying the product pack.
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Initially, the store was named Block & Quayle and
this was soon shortened to B&Q. Quayle recalled, "Suppliers sent us
product in boxes marked B&Q, so that name stuck."7
By the year 1979, the company had 26 stores across the UK. The stores
looked like warehouses. The warehouse type of store was a unique idea at
that time. B&Q's major target customers were those in the middle age
group. To attract older customers, the company employed older people
(over 50 years of age) in its stores.
During the 1980s, B&Q grew rapidly through mergers, acquisitions and
expansion of its operations... |
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