Facing competition triggered by the entrance of foreign retailers, domestic enterprises in the Mainland are trying to strategically transform themselves to survive in the increasingly difficult market, Sohu News reported.   Advantages of foreign retailers Foreign retailers are equipped with advanced business strategies, high level services, efficiency, and well-established corporate habits and philosophies. They have obvious advantages in business operations and technology.   Multinational coporations adopt advanced information technology to ensure efficient communication within their extensive retail networks. Distribution of products, information and human resources are better organized. For example, Walmart relies on advanced technology and electronic data processing systems as well as information management systems to establish the core for policy support. Such commercial automation of purchasing, sales and wherehousing information is easily communicated between the headquarters, branches and outlets. This is what domestic retailers who still rely on traditional sales and operations systems lack.   For global corporations like Walmart, their Chinese operations are backed by the global network and capital. Walmart has so far invested 9.05 million yuan in Mainland to open 15 stores but succeeded in generating 30 million yuan in sales. On the contrary, Chinese retailers are comparatively small in scale with non-strategic distribution and positioning. For example, Shanghai Lianhua Supermarket Group has opened 606 stores by 1999 with annual sales revenue of 73 million yuan.   Since most foreign retailers that enter China have large-scale operations, they enjoy the advantages of low-cost purchasing. Suppliers feel more secure when dealing with these retailers so they are willing to distribute their products at even lower prices. In contrast, Chinese retailers transfer the risk to the suppliers who are forced to transfer such cost to the consumers by raising the price of the products. Such supply chain systems negatively affect the product prices as well as relations between retailers and suppliers.   Foreign retailers also adopt strategic human resources policies to ensure the retail network is operated and managed by qualified personnel. They work on training their staff, particularly management, in thier specific corporate cultures. They invest in professional training for senior management while giving strong incentives to the ordinary staff. However, Chinese retailers lack an organized and optimized human resources policy which in turn reduces their competitiveness.   Counter-attack strategies Chinese retailers continue to work on optimizing operations scale to maximize profit from their franchises.   Market positioning and brand building are prioritized in restructuring the retail network. Domestic retailers need to strategically position their outlets and products to cater different groups of customers. Both the outlets and the products need to be represented in the franchise’s image and services in order to maintain the customer base. Products should be categorized according to varieties and classes to target customers of varied income level and preferences.   E-commerce should be developed to provide a platform for business development. Retailers should equip their outlets with advanced computer systems, Internet networks and other sorts of electronic payment devices. The modernization of payment and sales serves as an important tool to compete with foreign companies in business operations that use advanced technology.