Wal - Mart can kill 2 birds with one stone.

-Wal – Mart has to show investors better than flat to > 1-2% comp. sales.

-The management team needs to maintain the investment community’s confidence that it is still at the top of the retail food chain in the operations of a retail business. What Wal- Mart is now trying to do is demonstrate through numerous marketing initiatives, the changing/introduction of existing/new product categories and actions such as this partnership in China is their ability to continue growing as merchants.

-This is not an important quantitative move. (Although it continues to demonstrate Wal – Mart’s move into new and lucrative markets.) The partnership is giving visibility to the investors the forward thinking and agility in business planning that management is capable of and can be executed.

-In the grand scheme of things a $1 – 1.5 billion dollar business deal for Wal Mart is more than a blip but not a tremulous move.

-Wal –Mart has been operating in China and has proven that the company can adapt to the cultural nuances of the varied markets they are entering and are showing the proper restraint not to jump in head first. They are going to grow their international business organically but use "miracle grow" in the soil to enhance their presence, metaphorically speaking.

-With China proving time and time again it’s diversity among their quickly expanding middle class, Wal – Mart has learned that it has to treat this highly fragmented consumer with multiple business plans. What works in the south east may be a disaster in the north.

-All the aspects of assortment planning, merchandising, planning and allocation, associate communication, operations, store design and the myriad of other processes that Wal – Mart knows from operating in domestically do not apply to the new emerging markets. Management realizes this now (we have all seen the news stories of Wal – Mart selling exotic turtles in some of their Chinese stores or a strange vegetable we have never seen) and is showing the mandatory restraint by learning from the existing businesses they are acquiring, and in taking interest in and their aligned foreign competition's business  tying to capture the same demographic. (Tesco is a good analogue to examine).

-Wal – Mart and all the other foreign retailers are realizing that this market is not “the low hanging fruit” they initially envisioned but is instead a very complicated dynamic with differing country, provincial and local statutes that need to be understood and dealt with. There is not only a different quantitative mind set required but an agile operations plan and team needed to ensure success in all the differing sub markets existing in China.

-The Chinese government is very happy and welcoming to foreign investors but after a company has been wined and dined and signed their "letters of intent" they will be treated like every other “Freshman” on the team. The “varsity team” will always be the Chinese based companies while the Carrefour’s, Tesco’s, Wal –Mart’s and others will remain on the “special teams”. The feeling today is that the Chinese government does not want to see foreign ownership accounting for more than 5% of  the mainland's retail sales.

- In summation Wal – Mart is deadly serious about entering and thriving in new markets but right now they want the dynamic to be very noisy to distract their investors from their current sluggish growth and problems they are incurring domestically.