Retailing in india is one the most important pillars of the Indian economy, as it has a share of 12% in the
GDP. Indian retail market is the 5
th largest in the world and 2 nd most attaractive emerging market in the world, Vietnam being the first. According to the McKinsey report 2008, Indian retail market was valued at US$ 511Mn and is likely to grow by 4 times by 2025. Indias retail industry mainly consists of owner manned small shops such as kirana stores, mom and pop stores and the larger format convenience stores and supermarkets accounts holds a share of meager 5% in the industry. To increase this share of organized sector, India introduced FDI in retail sector keeping in mind the effects that can help prevent the small shop owners from going jobless as they wont be able to match up to the big retail units such as Carrefour and Walmart. Walmart It is the largest departmental store chain in the world and the 3 rd 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 network and they have been very successful till date. 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 Bn 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 Analysing 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 walmart and the Indian small and micro industry. 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, labour 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 glocalization 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 labor which can be utilized by Bharti-walmart JV to its best of use. 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 their produce at good rates to the distributor directly. 3. Another area which Walmart focuses on is the supply chain management and for that it has its own transportation as well. Walmart invests heavily in IT and transportation infrastructure so as to retain its core competency in the same area. 4. India with 2 nd 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 telecom networks provider will be a great help to WALMART.