wal-mart's entry in india

7/29/2019 Wal-Mart's Entry in India

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International Business Environment ProjectGROUP - 5


2/8

Project MethodologyPerson Contacted from Wal-Mart: Vivek Bucha

Questionnaire :https://docs.google.com/a/fms.edu/spreadsheet/viewfor m?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQ
https://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQhttps://docs.google.com/a/fms.edu/spreadsheet/viewform?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oSHc6MQ


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Core Strength Every day Low price Selling brand products at low price

Business Model

The IT capability of Walmart is best next to Pentagon in US WMS, TMS, RFID, SCEM , APS etc Best Satellite communication network

IT Technology

Maximum Number of Truck Fleets (6100) after US Army Maximum number of aircrafts than any other private non airline company Cross Docking facility at Distribution Centre

OperationalExcellence

No more than 4 % of total product from a single supplier like P&G, Johnson& Johnson etc.

Development of facility center (stores) at smaller location (First mover advantage)

Strategic Decision

Profit Sharing Policy based on number of hours worked Policy of 50 % of profit sharing from decreased pilferage to particular store 10 feet attitude

Discount stock purchase , promotion from within

Strong workCulture


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Motives for internationalizationDominate the retail space across the world

Cash on the retail boom in emerging economies and capturemarket share

Replicate the success achieved in the US markets and becomethe worlds largest retailer

Rated 5 th most attractive retail market FDI Retail industry ($470 bn in 2011) to grow at CAGR 14.7% Fast urbanization and young demographics Changing preferences, Rising per capita income, Changing consumption pattern Large unorganized sector

India


5/8

Modes of internationalizationDevelop common shared values

Training building international resources

Use of local expertise like Indian resource

Rated 5 th most attractive retail market FDI Retail industry ($470 bn in 2011) to grow at CAGR 14.7%

Unique work culture and other aspects


6/8

Fit with Corporate StrategyWal-Mart's vision statement is, "To become the worldwideleader in retailing

Mission Statement Components:

Customers

Products and services

Markets and technology

Concern for survival, profitability, growth

Self-Concept

Concern for public image and employees

Short term aim: Gain entry into selectedcities[primarily metro and tier-1 cities],consolidatetheir presence

Long term aim : Focus on strategic partnerships,tie-ups and further expansion

Creating Strategic Fit

Advanced Data Mining: IT capabilities can be easilyadapted

Workforce Culture: Corporate culture is transferable butdepends on the nation

Distribution Capability: Neighborhood stores can benefitfrom existing distribution system. However the distributionsystem has to be built from scratch

Partnership relationship with vendors: In order to getcompetitive cost advantage, volume is needed

Corporate Governance structure inIndia:

India's federal cabinet approved a decision to appoint a retired judge to investigate whether Wal-Mart Stores Inc.'s lobbyingactivities in the U.S. violated any Indian laws.

Lobbying of U.S. government representatives is permittedunder U.S. law and the disclosure was required by rulesdesigned to promote transparent governance.

The Bentonville, Ark., retailer had disclosed that it spent $25million on lobbying U.S. lawmakers over the past four years,including on issues related to "enhanced market access for investment in India."


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Why India & Hurdles in Growth

Industry Overview Market Size 500 $ bn ( 1.3 $ bn by

2020, PWC) Organized Retail 5-8% Growth rate 15-20 %

Attract 16 $ bn in next 3 yrs. 14 cr ppl are directly or indirectlyearning from retail

Why India? Large market Size

Low Org. retail penetration Strong GDP growth Rising Personal Income Large num. of aspirational

consumer( middle class, youngIndia, rural pop.)

Hurdles in Growth Can only open store in cities with pop above

10 lakh ( 53 cities as per 2011 census) 30% sourcing from Local SMEs Min. 100 $ Mn investment, 50% of it in back

end Sates final Authority ( only 10 in favor) Opp. From political parties- BJP , LEFT, SP,

Trinmool Congress Fear of Change in Political regime Procurement of Agri & Dairy products Govt.

First right, 7,000 APMC-approved markets Compliance of Over 30 regulations such as

signboard & anti hoarding measures beforeopening store Taxes for moving goods Inter state & even

within state Poor Infra- Roads & Storage (just 6,200 cold-

storage facilities , enough for only 11% of total)


8/8

Referenceshttp://online.wsj.com/article/SB10001424127887323622904578129294224588914.html

http://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cms

http://www.telegraph.co.uk/finance/newsbysector

/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.html
http://online.wsj.com/article/SB10001424127887323622904578129294224588914.htmlhttp://online.wsj.com/article/SB10001424127887323622904578129294224588914.htmlhttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9544107/Tesco-and-Walmart-get-green-light-to-move-into-India.htmlhttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://timesofindia.indiatimes.com/business/india-business/Walmart-Tesco-to-go-slow-on-stores/articleshow/18176892.cmshttp://online.wsj.com/article/SB10001424127887323622904578129294224588914.htmlhttp://online.wsj.com/article/SB10001424127887323622904578129294224588914.htmlhttp://online.wsj.com/article/SB10001424127887323622904578129294224588914.html

wal-mart's entry in india

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