WAL-MART EXPANSION TO INDIA

WAL-MART EXPANSION TO INDIA

Presented By:Danish AmeenMuhammad Mubeen Raza Ali AhmedHafiz Hammad AmeenTalha Bin Irfan

Founder of Wal-Mart

Sam Walton did not invent retailing, he simply changed the business model and way of doing business to make it a much more profitable venture.

Walmart

• Headquarter:- Bentonville, Arkansas, United States.

• World President & CEO :-Doug McMillon• India President & CEO :- Krish Iyar

Walmart

Revenue US$ 476.294billion (2013)

Operating income US$ 26.872 billion (2013)

Net income US$ 16.022 billion (2013)

Total assets US$ 204.751billion (2013)

Total equity US$ 76.255 billion (2013)

Owner(s) Walton Family

Employees 2.2 million (2013)

DETAIL INFORMATION OF WALMART

Walmart

History

• Sam Walton Established the Organization in 1962.

• Sam's focus was on selling products at low prices to get higher-volume sales at a lower-profit margin.

• Sales increased 45 percent in his first year of ownership to $105,000 in annual revenue, which increased to $140,000 the next year and $175,000 the year after that.

Walmart

Incorporation

• Incorporated as Wal-Mart Stores, Inc. on October 31, 1969.

• The first stock split occurred in May 1971 at a market price of $47

• Walmart opened its first Texas store in Mount Pleasant on November 11, 1975

Walmart

Wal-mart International

• Walmart's international comprise 4,263 stores and 660,000 workers in 15 countries outside the United States

• the company is the largest private employer in the U.S. and Mexico, and one of the largest in Canada.

• In the financial year 2010, Walmart's international division sales were $100 billion, or 24.7 percent of total sales.

Walmart

• 2006 :- It formed a joint venture with Bharti Enterprises, Inc.

•  2009:- Wal-Mart started doing business in India for the first time.

• Indian Wal-Mart is a wholesale business.

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Entered India with a JV

Wal-Mart Expansion: Past Track Record

Country Mode Strategy ResultCanada Acquired a weak

player, Woolco.• Operating in markets which Very Successful required minimum adaptation.• High Brand Recognition Segment.

Very Successful

UK Acquired ASDA. To give safe exit. Successful Competition with Tesco.

Germany Acquired big player, Werkauf.

Leveraged Acquired Network. Failed – ‘Werkauf’ cultural & operational issues.

China Greenfield Operations .

Sourced from Chinese suppliers; focused on need gaps.

Neutral- Labor Union and Law Suit issues.

The Corporate Level Decision

Wal-Mart Expansion will benefit for India too?

With the opening up of Indian Retail sector for FDI up to 51% in multi-

brand retail, India is set to become hub of Multinational Retailers from

across the Globe.

Increasing per capital income and changing consumption pattern are the

key drivers of fast growing Retail sector in India.

Organized retail are expected to increase its market share from 5.7% in

2011 to about 12%by 2016. Major gainers are expected to be the new

entrants like Wal-Mart and Carrefour.

Strategic Gaps in Indian Retail Sector

Limited mainly to Metros, Tier-I cities. Huge potential lies in sub-urban,

rural markets, Tier-II & Tier-III cities.

Geographical Gaps – Markets like North East are yet to be explored.

Truly Global Shopping Experience missing in Indian Retail Stores.

Competitors in India

Name Category Target Segment Comments Ratings

Big Bazaar(Future Group)

Merchandise Diversified.

Middle Class.

The Main Competitors. High

Pantaloons(Future Group)

Apparels, Accessories.

Upper Middle Class & Lower Upper Class.

Star Bazaar(Tata Group)

Merchandise Diversified.

Upper Middle Class & Lower Upper Class.

String Backing by Tata, Limited Reach.

Average

Growth and opportunities in Indian Retail market

• Fastest growing industry in India

• Changing buying patterns of people

• Middle class and untapped retail market

• Retail industry in India are expected to grow 25% annually

Profitability Analysis

• Bargaining power of customer

• Bargaining power of supplier

• Threat of new entrant

• Threat of substitute

• Existing rivals

SWOT Analysis of Wal-Mart in India

• Strength

• Weaknesses

• Opportunity

• Threats

Key Success Factors for Indian Markets

Cost Leadership – Attracting Masses

Strategic Retail Outlet Location.

Wide Range of Goods/ Variety - keeping ethnic & economic diversity in

mind.

Sales Promotion/ Marketing Campaigns in Festive Seasons

What Wal-Mart should suppose to do?

Wal-Mart should apply its ‘Repeatable formula’ of Lowest price - supported with

efficient supply chain and Information technology for Indian markets as well.

Given the compliance with Regulatory norms and fast market penetration, Wal-

Mart to go for strategic alliance – joint venture. Success depends on

implementation within time-limits.

Wal-Mart should focus on local customer preferences, strategic locations, regional

diversity & incorporating Indian values for building a sustainable business model

for India.

Conclusion

Wal-Mart applied all their past strategies in India to get success.

Resulting to it, Wal-Mart becomes the big retailer in India.

They also apply new strategies which is linked to Indian culture to penetrate more

in Indian culture not repeating mistake they did in Germany.

Wal-Mart knows that India is the fastest growing economy of the world and they

have the opportunity to avail the benefits of mass sales in India in order to

increase their revenues.

"The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience."

:- Sam Walton (1918-1992)

Walmart

Walmart