Date post: | 01-Jul-2015 |
Category: |
Business |
Upload: | anirudh-maheshwari |
View: | 290 times |
Download: | 4 times |
Priyanka Anand Anirudh MaheshwariWAL-MART ENTERS
INDIA
INTRODUCTION
Indians who reside in urban India are a potential market opportunity that cannot be ignored for consumer durables, and electronics.
Walmart: $250 B company with $500 B in revenues and only $35 B in revenues from foreign countries.
Top on Wal-Mart’s list of priorities is to gain access to the Indian retail market, a $350 billion industry that is growing at 15% year-on-year.
Takeaway: Wal-Mart has set its sights on the Indian market, and has taken a 2 pronged approach to enter, with wholesale as well as single-brand retail stores.
RETAIL SECTOR, INDEPENDENCE TO1990S:
STORE AND BRAND PROLIFERATION
Reliance Fresh
Hand cart
Takeaway: India had less than 2% organized retail before the 1990s. Today, India is rapidly approaching 10% organized retail.
RETAIL REFORM IN THE 2000S: ENTRY OF THE GIANTS
Takeaway: The Indian retail sector has only recently been opened to single brand retail stores.
THE INDIAN OPPORTUNITY AND CHALLENGE
Th
e o
ppor
tuni
ty
The
Challeng
e
• Retail market will grow to $637 billion by 2015.
• Indian discretionary spending will increase dramatically.
• Organized retail holds only 10% of retail market
• Large investments required
• Legal restrictions on farmer sales directly to retailers, middleman system.
• Cultural barriers
Takeaway: The Indian market has many opportunities as well as challenges.
MODERN GIANTS
Takeaway: The entire ecosystem has adapted to Indian market conditions.
WAL-MART’S GLOBAL STRATEGY
Russia, like India, also challenges foreign entrants with corruption at the local level.
Wal-Mart built small “Todo Dia” outlets in Brazil.
Wal-Mart faces the problem of adapting to local tastes in China.
Wal-Mart used its market power to lower prices and alters production
schedules altered to fit its need.
Takeaway: Wal-Mart has learned from its various experiences the importance of being locally responsive to solve corruption, local product demands, size constraints, and union backlash.
WAL-MART IN INDIA
Takeaway: Given Wal-Mart’s extensive experience in India, it is well suited to open stores in India.
WAL-MART’S RESPONSE TO INDIA’S UNIQUE CHALLENGES
Logistical
Cultural
Political
Takeaway: Wal-Mart faces political, cultural and logistical barriers while in India.
RECOMMENDATIONS FOR WAL-MART
Wal-Mart has international experience and knows how to cater to developing world needs.
Wal-Mart can hire middlemen just like ITC to help understand its customers.
Wal-Mart can invest in educational institutions in its community to get good talent.
Wal-Mart can invest in smaller stores to satisfy customer needs.
Wal-Mart can reduce costs by creating better logistics for its products.
Takeaway: Wal-Mart can be successful by applying a unique Indian spin on its values.
RECOMMENDATIONS FOR LOCAL RESPONSE
Takeaway: Local Competitors can compete against Walmart using this 5 fold strategy.
• Local competitors have already implemented a lot of these actions.
• In particular, they have to focus on deploying the latest technology for sourcing as well as training more of their staff in-house.
• Walmart may be new to the market, but it already has adopted several of these strategies.
• All in all, India offers a dynamic and challenging opportunity for Wal-Mart.
• There are competitive elements in the market that require constant innovation to overcome.
• However, the Indian opportunity is so vast that Wal-Mart cannot afford to give up. Whatever the outcome, India’s retail sector will continue to offer opportunity for millions of entrepreneurs.
CONCLUSION
QUESTIONS