Wal-Mart – Competing in the Global

Market

Rubini Steffi Shirani

09AC35
International business firm – the entry
strategies adopted by it and the reasons
underlying such decisions !!
International Business Firms
International business firms may be defined as
‘Firms engaging in business transactions that take
place across national borders.’
includes the very small firm that exports (or imports) a
small quantity to only one country, as well as the very
large global firm with integrated operations and
strategic alliances around the world
Walmart …..
 What is Wal-Mart?
World’s biggest retailer
Sells Grocery & General Merchandise
One Hour Photo Studio
Pharmacy & Optical Centre
Tire & Lube Express
Gasoline station
Fast Food Outlet
Garden Centre
Pet Shop
Also feature hair and nail salons, a video rental
store, a family fun center, a branch of a local bank
International Business Firms
International business firms may be defined as
‘Firms engaging in business transactions that take
place across national borders.’
includes the very small firm that exports (or imports) a
small quantity to only one country, as well as the very
large global firm with integrated operations and
strategic alliances around the world
 International Entry Choices
INTERNATIONAL ENTRY CHOICES
International firms may choose to do business in a variety of
ways. Some of the most common include
o exports,
o licenses,
o contracts and
o turnkey operations,
o franchises,
o joint ventures,
o wholly owned subsidiaries,
o and strategic alliances.
Exports :
 Expects its foreign customers to deal with the marketing
and sales issues.
 Select an appropriate transportation method, preparing
export documentation, prepare the product.

Licenses:
 Granted from a licensor to a licensee for agreed on
compensation
 The firm can grant a license to a foreign firm to
undertake the production.
Contracts
 Frequently by firms that provide specialized services
 Firms that have talents not being fully utilized

Turnkey Operations
 Firm constructs a facility, starts operations, trains local
personnel, then transfers the facility
 Usually for very large infrastructure projects, such as
dams, railways,
Franchise
Involve the sale of the right to operate a complete
business operation.

Joint Ventures
Shared ownership in a subsidiary company
The decisions on what to share, how much to
share, with whom to share, and how long to share
are all important to the success of a joint venture
 SWOT ANALYSIS (GLOBAL)
Strength
• Efficient supply chain management
• Targeted marketing
• Service innovation and technology
• Growth through adaptability.
• E-tail’s continued development
• Least cost of packaging
• strong penetration strategies
• Infrastructure (financial strength)
Opportunity
• Many countries are still left
• Unorganized retail
• Globalization (diminishing trade
barriers)
• Cold Storage market
• Increase in consumer purchasing
power
• E-business
• Unemployment
Weakness
• Poor public image
• Late entrant in international market.
• Unable to adapt to different countries
• Ununionised & Strict labor laws
• Were unable to handle media
• High law suits against the company.
• Low penetration in European union
Threats
• Terrorism
• Competitors
• Negative publicity
• International laws against anti
dumping
• Campaign against anti
competitive practices
Wal-Mart in India
 What brings Wal-Mart to India?
A tremendous market
Emergence of middle class – 300 million
Consumer class of 105 million growing at rate of 10%
& with an annual avg household income of $3000
Demographics – 60% of Indian population is in age
group of 20-30 & is more inclined towards modern
shopping.
Consumer spending growing rapidly –credit card
Sales on per sq. ft. basis lowest in world
GDP growing about 6-8%
 Opportunities in India
India’s retail trade is estimated at $206 billion & growing

at 5% annually
Only 3% of market organized – shopping malls

India as fastest growing sourcing market

India’s vast market for food retailing

Cold chain - Refrigerated distribution of fruits n vegetables

Can add value to customers by means of low price and

wide range of merchandise

Challenges in India
Protests from small businesses (kirana )

FDI restrictions.

India’s poor infrastructure

Poor public image – predatory pricing , unemployment

India’s diversity and heterogeneity

Competition from Indian

RetailorsincludingPantaloon,Shopper’s Stop ,Piramals

Regional governments are very strong politically
 Present Scenario
Wal-Mart joint venture with Bharti
15 large wholesale outlets over the next seven years
Entering as a wholesaler, because Indian law does not
allow multi-brand foreign retailers to sell directly to
consumers
Govt. of U.P forced several top retailers to shut shop after
local kirana stores triggered unrest.
Other foreign retailers : Carrefour - Wadias ,Debenhams -
Future group
ICRIER study – 12 million stores
Recommendation
 Understand Consumer behavior

 Market Segmentation

 Format of stores– super centers or hypermarkets

 Wal-Mart to adopt a blended model of its traditional

format tweaked to fit the reality of Indian real estate

 References
www.walmartfacts.com
www.gartner.com
www.forrester.com
www.hoovers.com
www.wikipedia.com
www.tsmg.com (Tata Strategic Management Group)
www.finance.yahoo.com
www.ficci.com
THANK YOU