Professional Documents
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International Business Environment Project Group - 5
International Business Environment Project Group - 5
International Business Environment Project Group - 5
Project Methodology
Person Contacted from Wal-Mart: Vivek Bucha Questionnaire : https://docs.google.com/a/fms.edu/spreadsheet/viewfor m?formkey=dENOTWpkNWh4QWdEMzF4cUJ0bk5oS Hc6MQ
Core Strength
Business Model
Every day Low price Selling brand products at low price
The IT capability of Walmart is best next to Pentagon in US WMS, TMS, RFID, SCEM , APS etc Best Satellite communication network
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
Strategic Decision
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)
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
Replicate the success achieved in the US markets and become the worlds largest retailer
India
Rated 5th 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
Modes of internationalization
Develop common shared values
Rated 5th most attractive retail market FDI Retail industry ($470 bn in 2011) to grow at CAGR 14.7%
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 selected cities[primarily metro and tier-1 cities],consolidate their presence
Long term aim: Focus on strategic partnerships, tie-ups and further expansion
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 before opening store Taxes for moving goods Inter state & even within state Poor Infra- Roads & Storage (just 6,200 coldstorage facilities , enough for only 11% of total )
Why India?
Large market Size Low Org. retail penetration Strong GDP growth Rising Personal Income Large num. of aspirational consumer( middle class, young India, rural pop.)
References
http://online.wsj.com/article/SB10001424127887 323622904578129294224588914.html