Case Study: Walls (China) Co., Ltd.

Paper Summary:

This paper explains that highly regarded Unilever, who owns Walls Ice Cream, already has established its line of personal care products and food offerings in China. The author reports that, in 1992, Wall's management team concluded that the China population was ripe for expansion in the ice cream market. The paper points out that, although Walls' distribution strategy had been successful in many other countries, it required serious adaptation in China because of the high costs associated with the under-developed transportation and retail infrastructure and fragmented logistics service providers. The paper indicates that these costs were passed on to consumers, who were not willing to pay higher prices for what was perceived to be a local brand. The author concludes that Walls' initial logistics start up resulted in a missed opportunity due to under-utilization of Unilever's vast business network and resources, which were already located in many other regions of China.

Table of Contents:
Executive Summary
Business Analysis
Government
Joint Ventures and Distributors
Retail Market and Consumer Culture
Conclusion of Business Analysis on Walls China
Further Points for Discussion

From the Paper:

"The company retained a series of independent distributors who sold ice cream from the back of trucks to street vendors and small independent retailers in large cities. Walls coaxed vendors into selling their brand exclusively by lending more than 42,000 refrigerators for free, but later found vendors misusing equipment to store frozen products from other manufacturers, and inventory shrinkage due to freezer theft. Walls' refrigerator investment was quite sizable and due to the fact that ice cream demand in China was seasonal, the point of purchase refrigerator investment was not the most cost-effective.

Sample of Sources Used:

• David, Pierre, and Richard Stewart. International Logistics. Ohio: Thomson Corporation, 2008.
• Walls China Co., Ltd. Logistics Operations Startup. Gilmore, Peter. 1998
• Clifford, Mark L (May 1997). "How you can win in China" (http://www.Businessweek.com/1997/21/b352815.htm). BusinessWeek.
• "Major Chinese Retailers and Manufacturers, With Sponsorship Of China's Largest EconomicAssociation, Partner with Retek". (http://www.prnewswire.com/cgi- bin/stories.pl?ACCT=104&STORY=/www/story/09-19-2000/0001316227&EDATE=). Retrieved on 2007-09-23.
• Burke, Bob and Carol Wingard (1998). "The Big Chill" (http://www.chinabusinessreview.com/public/9707/wingard.html). The China Business Review.

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