Kanya Geraldine

201900211

MKTG466 Global Marketing Management

Case 12-2

1. What are the biggest obstacles facing Walmart and other foreign retailers in India?

Retailers from around the world who are targeting India confront unique difficulties. Many Indian
activists and legislators dislike big-box retailing because they believe that it will put some of India's
millions of shopkeepers out of business. Legislators have a mistrust of the company's intentions, which
is a legacy of colonial times and the activities of the British East India Company. They worry that after
driving small businesses out of business, the foreigners will boost prices. Despite Walmart's potential to
positively impact India's retail industry, some industry watchers are wary of the company's presence
there. Walmart and other international big-box retailers will now be able to sell directly to consumers
thanks to regulatory amendments that were passed in the fall of 2012.

2. Summarize some of the elements in India’s political, economic, and cultural environments
that can impact the market opportunity there.

Analysts predict that during the next five years, India's $500 billion annual retail market will expand at a
7 percent yearly rate. The political, economic, and cultural settings in India, however, may have an
impact on the market opportunities there. For instance, India's government maintains strong laws that
used to effectively keep foreigners out of the retail market. The 28 states that make up India reserve the
power to accept or reject foreign-owned businesses. Due to inadequate infrastructure and ineffective
supply chains, Western merchants frequently need to collaborate with local vendors to assist them in
raising their quality. In addition, many Indian activists and legislators despise Western-style big-box
retailing because they worry that Walmart would put some of India's millions of merchants out of
business. Finally, lawmakers have a colonial-era perspective on foreign corporations working in India,
which makes them skeptical of their motivations.

3. Review Figure 12-4. Which quadrant of the matrix applies most directly to India? Why?

India would probably fall under the matrix's "Emerging Markets" quadrant. This is due to the fact that
just about 7% of India's retail market consists of modern outlets, indicating that this market has
tremendous space for expansion. Additionally, due to stringent government regulations, the retail
market in India used to be essentially closed to foreign competitors. However, with the passage of
regulatory reforms in the fall of 2012, Walmart and other foreign big-box retailers will now be able to
sell directly to consumers.
 4. Going forward, to what degree will Walmart be required to adapt its business model in India?

Walmart will need to make significant changes to its business strategy in India. For instance, many
Indian activists and legislators despise Western-style big-box retailing because they worry that Walmart
would put some of India's millions of merchants out of business. In addition, each of India's 28 states has
the authority to accept or prohibit foreign-owned businesses, so Walmart will have to collaborate with
local suppliers and juggle a maze of rules in order to operate there. Finally, because to inadequate
infrastructure and ineffective supply chains, Western retailers frequently collaborate with local vendors
to assist them improve their quality. Walmart will therefore need to modify its business strategy in order
to thrive in India's distinct market climate.