Fate of Walmart

8/3/2019 Fate of Walmart

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By

Arpita

Atrayee

Varun


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y Walmart-USA

y Walmex-Mexico

y Asda-UK

y Seiyu-Japan

y Best Price-India

Do not run by own name unless it has 100% subsidiary in the country


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y Started up in suburbs of Amritsar

y Plans to move north to south

y Plans to open up in Mumbai tying up with BhartiGroup next


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(According to Zenith Management Consulting)

Walmart is Master of manipulating perception

Trap for Customers

Slogan- Always low prices

Business Model- low price enabled by operating efficiency and buyingpower

It sells itself in following two ways:

i) Media advertising central message We have lower price than anyoneelse. Added with second critical element:

ii) The opening price point-it is very low priced , high velocity itemplaced in highly visible spots in all store sections price spin


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Comparison of price of the other items in each section shows:

y Only 15% - 20% of items Walmart sells are actually priced lower thancompeting retailers

y 80% - 85% of itemsWalmart sells are more expensive than competingretailers


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Trap for Vendors

Vendors gets high revenue which is their prime interest if they sell toWalmart

y Ones producer becomes supplier ,Walmart accounts for between 30%-70%of their revenue

y Each year price they will receive for selling each item and quantities theymust sell is fixed

y Each year 5% of price is reduced for items that has not undergoneinnovation

y If supplier is unable to meet Walmarts price and volume demanded,thesupplier is dropped or if the supplier is too large,the number of items

Walmart purchases is significantly reduced


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y Poor Quality

y

Poor Service

y 80% - 85% of items are more expensive than competing retailers

y Customers are not getting what they are thinking

y Vendors do not benefit the way they think they will

y Workers are dissatisfied enough to file lawsuit


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y India : second most populous nation - large potential customers &

employees

y The Indian government opened 51% FDI in multi-brand retail

y The Bharti Group is likely to invest $2.5b by 2015 in the retail sectorwhile entering into a 50/50 joint venture with Wal-Mart

y McKinsey Report : India's $250 billion retail business is the eighthlargest in the world and has the potential to grow 7% by 2012

y Economists expects : - GDP to increase by 7%

- Income growth rate by7%-7.5%

y Siddhartha Roy(Chief economist ,Tata Group) :"Total consumption expenditure is likely to grow at over 6%"


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y Fierce backlash from

-Political parties (like-BJP,Congress allies-DMK,TMC)

-Traders associations (like-Confederation of All-India Traders)

- Mom - and - pop stores i.e. kirana stores

- Retail stores (like-Big Bazar, Spencers)

y Predicting Consequences

- wipe out small unorganized retails

- monopoly

- unemployment

y Attitude of Indian mass


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FATE?

Fate of Walmart

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