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CASE STUDY ON
WALLMART
AND
BHARTI
Made by: Ravi Kant Singh
Walmart
It is the largest departmental store chain in the world and the 3rd largest employer in the world. The
corporations philosophy is to strengthen its relationships with employers, customers and suppliers. It
follows a low pricing strategy and becoming a cost leader is its core competency. Another core
competency which walmart focuses on is the robust and efficient supply chain network which is
strengthened by its own transportation network. They have leveraged IT to enhance their supply chain
Another reason which has helped WALMART to do well in most of the international locations in which it
has started business is GLOCALIZATION. It has involved itself in local communities and adapted to their
local culture. Also, on an average WALMART sources 90% products locally hence it helps in improving the
local economy.
BHARTI
Bharti enterprises, a leading group in India which has its business spread across different sectors has
been rightly shortlisted by Walmart to open up its joint venture in India. Bharti has attracted US$ 1.2
Billon in foreign equity which is the highest in India and hence we can say that it has a good history of
partnering with overseas companies. It is rated No. 1 in telecom business in India and has partnered with
alcatel lucent to achieve this. Bharti has a deep knowledge of Indias fast growing consumer market and
hence can be a good partner to WALMART as they both complement each other I terms of their
strategies
BHARTI WALMART JV
Analyzing BHARTI WALMART JV by using the porters diamond model has led to the following results:
DEMAND
1. A basic difference which exists in the mindset of Indian and American people is that American
people focus more on BUY & PAY whereas Indian people focus on SAVE & BUY. This mentality
observed a change in the year 2000 as there was a steep increase in the consumer spending as the
youth population in India has seen a considerable growth in their disposable income. This increase
has led to opening of more and more outlets of global brands as the consumer today wants better
quality, variety and lifestyle products. This led to a demand in the organized retail sector.
2. With stiff competition from reliance, RPG, TATA, Aditya Birla group etc., Buyers have the ultimate
power to bargain and hence get the product at the cheapest price possible.
3. The FDI policy in India states that min 30% of the products are to be procured from Indian SMEs
hence it creates a demand for their products as well. Therefore it is a win-win situation for both
4. Often this high consumer demand leads to innovation because ultimately Walmart and Bharti focus
on strong customer and supplier relationships and to maintain the relationships you have to be
innovative in your approach. The ever increasing competition makes this factor even more
important.
FACTOR ENDOWMENTS
factor endowments is defined as the amount of land, labor capital etc. that a country possesses and can
exploit them to its use. It is of two types, firstly the basic factor endowments which includes the natural
resources, the climate, the geographical condition etc. and the secondary factor endowments which
includes technology, infrastructure etc. or in simple words those resources which are obtained by the
investment of people, companies, government etc.
1. Walmart, a follower of localization focuses on the local area to improve its business rather than
replicating the same business plan in every country that it ventures into. It has a great ability to
apply its unique culture and successful retailing concept despite daunting business and cultural
challenges. India has the second largest population in the world and has a vast resource of skilled
2. Cheap and good quality Agricultural products being another important contributor to the Indian
GDP and an important product to WALMART (if it wants to target small businesses such as fruit and
vegetable vendors and the kirana stores) can actually help Walmart to procure products direct
from the farmers at cheap rates and hence they will be able to retain their cost leadership status.
On the other hand it will be great for the farming industry as well because they will be able to sell
3. Another area which Walmart focuses on is the supply chain management and for that it has its own
4. India with 2nd largest no. of mobile users and very cheap telecommunication prices can be a great
advantage for BHARTI-WALMART. Partnering with BHARTI, Indias major telecom operator and
Opportunities
Whole configuration of Wal-Mart all over the world; the network linking the
activities of the value chain until the
Final consumer:
E-Commerce
- Customers have access to great products at low prices, anytime,
anywhere - personalized shopping experience
- Website Walmart.com
- Mobile apps
- Moved its EDI-based infrastructure from traditional (and expensive) value-
added networks (VANs) to the Internet.
Global Supply Chain
How does Wal-Mart use technology?
technology (IT)
- Leaner supply chain
- improved planning and enhanced customer experience
- efficient inventory management
- Accurate merchandising
- Improved workforce management and store Operations
- low inventories, high inventory turnover ratios, reduced costs
- increased profitability
Global Strategies
Result:
Provides stability
21% of GDP
7% of labor force
Retail in India
2006: Change
Allowance of up to 51% FDI in multi-brand retailers
INDI
A Impact: Immediate revenue growth increases
MARK
ET
Why choose Bharti?
2007: Wal-Mart needs to form a joint venture
In reaction to 2006 FDI legislation
Begin search for an Indian partner to own other 49%
Bharti Enterprises
Founded in 1976, Indian business
conglomerate
Market leader in telecom
Top 10 Biggest Indian companies
Experience in international
partnerships
Del Monte (United States)
Axa Financial (France)
Have necessary liquid capital to invest
CEO Sunil Mittal worth US$6.6 billion
Why choose Bharti?
Opportunities
1. Wal-Mart Stores Inc. gains exclusive first-mover
advantage into India
2. Ability to transform the industry, low prices and increased
quality
3. Fast-growing economy, 2nd largest population base
How it worked?
1. Wal-Mart brought in global supply chain capabilities and
expertise
2. Customization to the unique requirements of the Indian
market
3. Bharti responsible for managing the retail store
operations
4. Wal-Mart focused on logistics capabilities and building the supply
chain
Bharti-Walmart
Establishing the Supply Chain
Benefits:
- More control over packaging and quality management
- Enhance productivity
INDIA
- Reduce inefficiency of the industrys traditional supply chain
Problems:
- Increased pressure from local civil right groups
- Aggressive demonstrations and protest of traditional
Owners
- Low quality of Indias transportation network
- Uncertainty on how to implement the supply chain
Bharti-Walmart
Challenges
1. Adapting to Indian cultures
Inability to meet Indian needs will result in protest, riots