WalmartandBhartiAnInternationalPartnershipPartOne

StuartHaack,KristyJunio,ZeyadMaasarani,KimTabaretz
Theformationanddissolutionofcorporatepartnershipsisnothingnew,
particularlyintheglobalmarketplace.Venturingintoapartnershipisalwaysspurredby
someobjective.InthecaseofBhartiandWalmart,itwasduetotheuntappedrichesof
theemergingIndianretailmarketplace.
Walmarthadbeenexpandinginternationallyforsometime,buthadneverbeenable
tobreakintoIndiasmarketduetostrictgovernmentregulationswhichlimitedforeign
directinvestment(FDI)to51%(Bose,p.3,2012).
Bydevelopinga5050ventureforbackendsupplychainmanagementand
wholesalecashandcarryoperations,(Bose,p.9,2012)Walmartwasabletoutilize
Bhartisdomesticcorporateheadquartersasadoorwaytothisvastlyexpandingmarket.
Ontheothersideofbusinessdevelopment,Walmartwasallowedtofranchiseitself
whilesharingexpertiseandtechnologywithBhartitosupporttheretailstoresthat
wouldbebuiltbyBhartiRetailLtd,itswhollyownedsubsidiary.(Bose,p.9,2012).
Foreignmultibrandretailers,inlieuofsharingownership,werealsoallowedentryinto
theIndiaretailmarketbysharinginformationandtechnologywithIndiandomestic
partners(Bose,2012).AnotherreasonforthepartnershipasstatedbySunilB.Mittal,
chiefexecutiveofBhartiinTheEconomicTimesarticleWalmartSaysNamasteIndia,
withBharti,Bharti,withitsdeepknowledgeofIndiasfastgrowingconsumermarket
andWalmart,withitsextensiveglobalretailexperience,sharethesamecommitmentto

buildingrelationshipswithproducers.(2006)Andfinally,whatmadeBhartianeven
betterpartnerforWalmartwasBhartispriorexperienceindealingwithforeigndirect
investment(FDI)andinternationalbusinesses.Infact,Overtheyears,Bhartihad
attractedatotalofUS$1.2billioninforeignequitymorethananyotherIndiantelecom
firm.(Bose,p.8,2012)
Fromtheotherperspective,WalmartwasaparticularlyattractivepartnertoBharti
forseveralreasons.ItwasthetechnologyandinfrastructurethatMittal,chiefexecutive
ofBhartihadhiseyeon.(Bose,2012).Bhartisawanopportunitytoturnaroundthe
infrastructure,supplychainandITthroughastrategicalliancewithretailgiantWalmart.
ASWOTanalysisisattachedasTable1.0.
BenjaminGomesCasserasnotesinManagingInternationalAlliances:Conceptual
Framework(1993)thattomaximizethebenefitsofcollaboration,thepartners[inan
alliance]needtohavecomplementaryneedsandassets.Intherapidlygrowing
organizedretailmarketinIndia,WalmartandBhartiwereabletoleveragethestrengthof
Walmartssupplychainoperationstobuildabackendframeworkfortheplannedretail
establishments.Thisexpertiseenabledthealliancetoquicklyimplementbestpractices
forretailoperations,thusfurtheringtheircurrentearlymoveradvantage.
Inamarketwheretheretailindustrywasknowntobeinefficientandscattered
(Bose,2012),byusingWalmartsInformationTechnology(IT)framework,thealliance
createdinventorycontrolsystemstotrackandmanageinventorythroughoutthenew
retailoutletsranbyBhartiRetailLtd.Thealliancesabilitytoeffectivelyforecast
demandsalongwithBhartisknowledgeofthelocalmarket,enabledbothcompaniesto

beatglobalrivals(Bose2012).Marketknowledgeandestablishedprocessesseemto
haveplayedamajorhandinthesuccessofthisalliance.
Sincethecompanyalreadyhadestablishedbuyingrelationships,thealliancecan
furtherleveragetheserelationshipsforinventoryfortheIndiaretailandwholesale
establishments.TheaddedbenefitisthatlocalsourcingcouldalsopossiblyhelpWalmart
overcomeitsreputationofbeingsociallyirresponsible,whichwasoneofitskey
weaknessescomingintothealliance(Bose,2012).Byincreasinginventorypurchased
withinIndiaandbypartneringwithareputableIndiancompany,Walmartmaybeableto
positivelyinfluenceconsumerperception.Furthermore,sinceWalmartalreadywasable
tomaintainlowerpricesonmerchandisesoldthroughoutitsnetworkofstores,Walmart
shouldalsoabletobringcompetitivepricingtoIndiathathasbeennegotiatedthroughout
itsinternationalinfrastructure.
Thealliancehadtheadvantageofknowingwhatwasallowableinthehighly
regulatedretailmarket.Walmartwasabletobypassmanyrestrictionsthatwouldhave
hindereditsabilitytoenterthemarket.BycannibalizingonBhartislocalretailerstatus
andrunningtheirretailoperationsunderthisentity,Walmartbypassedrestrictions
normallyplacedoninternationalplayers.
Bothcompanieshadcomplementarystrengthstheywereabletoutilizetoquickly
expandinIndia.Thisenabledthealliancetomaintainitsearlymoveradvantage.
Leveragingeachothersexpertise,bothentitieswereabletouseandbuilduponbest
practicesthathadprovensuccessfulforbothcompaniesintheirindividualventures,
performingbetterthaneithercompanycoulddoaloneinthegrowingIndianretail

market.
Table1.0

Strengths:

Weaknesses:

Walmart

Supplychainexpertise

Internationalinfrastructure

Leveragewithproducers

Walmart

NoaccesstoIndianmarketwithout
partner

Inabilitytoestablishpresenceoutside
Americas

CulturalchallengesinS.Koreaand
Germany

Bharti

ExistingpresenceinIndia

ExperiencedwithIndianculture

Strongreputation

Genderdiscrimination/predatorypricing
lawsuits
Bharti

Needsmultibrandexperience

Supplychaininexperience

Trackrecordofretail/working
withFDI

Opportunities:

Threats:

EmergingIndianretailmarket

Culturaldiversity

Favorabledemographics

Strongpoliticalopposition

Earlymoveradvantage

Governmentalregulation

ShiftingIndianmindsetonretail

Indiasunderdevelopedinfrastructure

andbrands

Walmarthaslargesupplybasein

Hostilityfromunorganizedretailand
middlemen

India
WalmartandBhartiAnInternationalPartnershipPartTwo

ThisisGroup3'sstakeholderanalysisofWalmartandBhartisstrategicpartnershipin
India.Thisisaprimarystakeholderanalysisofinfluenceandsupportbasedonthe
introductionofthisnewbusinessventureinIndia,butdoesnotnecessarilyrepresentthe
evolvingstakeholderanalysisasrelationshipsandregulationschange.Now,wewill
divulgewhyweplacedeachstakeholderonthechartwherewedid.

1.Shareholders:(HighInfluence,HighSupport)WalmartandBhartishareholdersarea
veryhighpriorityforusbecausetheirtrustinourvision/strategyisoneofthemost
criticaldecidingfactorsinourabilitytoexecutethispartnershipeffectively.Anegative
reactionfromourstockholderscouldsendourcorporationintodisarray.Thus,theyhave
ahighlevelofinfluenceandsupportforthisventure.

2.GovernmentAgencies/Regulators:(HighInfluence,MidLowSupport)TheIndian
governmentanditsregulatorsarethegatekeeperforthispartnership,hencetheirhigh
influencedesignation.Theyareslightlysupportiveofthepartnershipbecausetheypassed
legislationthatallowsit,andtheyalsoarelikelytobenefitfromtheresultingeconomic
stimulationthatwillcometofruitionifWalmartandBhartispartnershipproves
successful.

3.GeneralPublicinIndia:(HighInfluence,MidHighSupport)ThepublicofIndias
acceptanceofthepartnership,andtheirensuingshoppinghabitswillbetheultimate
decidingfactortothesuccessofthispartnership.TheIndianmarketistrendingtowards
organizedretail,andtheconsumerbaseisgrowingmoreandmoreprofessional,sothere
isalevelofsupportfromthepublic,butwedliketoseethatlevelgohigherasaresultof
thiscommunicationcampaign.

4.Media:(HighInfluence,LowSupport)Thereisnoquestionthatthemediaplaysa

crucialroleinourabilitytocommunicateeffectively.TheIndianmediasquestto
connectwithitsviewers,however,mayforceIndianoutletstotakeanegativestance
towardsthepartnership(becauseofthenegativeimpactitmayhaveonretailers).Itwill
beuptoourcommunicationmessagestotrytohavethemediaportrayWalmartina
positivelight.

5.Employees:(LowInfluence,HighSupport)AlthoughWalmartsrankandfile
employeeswontbeplayingahighlycriticalroleinourabilitytostrategically
communicatethisventure,theirsupportleveltotheprojectisakeytosuccess.Weneed
tohavethembuyintothevision,sotheycanthenmoveinlinewithit,andhelpus
executeit.

6.Suppliers:(HighInfluence,HighSupport)Ourrelationshipswithoursuppliersisquite
criticalinourabilitytomakeasmoothtransitionintotheIndianmarket.Theyarehighly
supportiveoftheventurebecauseofthemonetarybenefitsitoffersthem,butweneedto
effectivelycommunicatethispartnershiptomakesurewegetthebestvalueand
commitmentfromoursuppliers.

7.U.S.andIndianAnalystCommunity/PotentialInvestors:(HighInfluence,Neutral
Support)Aspubliclytradedcompanies,WalmartandBhartineedinvestmentbankers
andpotentialinvestorstobesoldontheirabilitytomanagethispartnershiphencetheir
highinfluence.Sincetheirloyaltyistotheiremployer,theyhavenovestedinteresteither

way,whichiswhytheirsupportisneutral.

8.Competitors:(NeutralInfluence,LowestSupport)Althoughcompetitorsusuallywont
haveverymuchinfluence,duetoIndiasretaillandscapeandpossiblehostile
marketplace,theydowieldmoreinfluencethanusual.Also,justbecauseofthenatureof
competition,theyreatthelowestpossiblesupportlevel.TheywanttoseeWalmarts
partnershipfail,buttherearesomebenefitstheymayexperience,likeimproved
infrastructure.

9.LaborUnions/TradeUnions:(LowSupport,LowInfluence)LaborUnionsandTrade
Unionswontbethebiggestfansofthepartnership,buttheywonthavesubstantial
influenceeither,atleastfromtheprimaryperspective.Onceemployeesareinplace,that
couldchange.Itwouldbeinourbestinteresttomonitorandthesegroups,because,even
withtheirlowlevelofsupportadinfluence,theywilleventuallyhaveindirectinfluence
viaouremployees.

10.IndianRealEstate:(HighSupport,LowInfluence)IndianRealEstatemarketisgoing
toreceivestimulationwiththispartnership,asfacilitiesneedtobeacquired.Hencethey
willsupportthepartnership,butwillhopefullywieldlittleinfluence,whichwillgivethe
companyleverage.
Theimplicationofthesepositionsisthediverseandvariedinterestsofthe
stakeholders,andthesubsequentprocessesinwhichcommunicationmustbehandledby

Walmart.Althougheachstakeholderhasavestedinterestinthesuccessorfailureofthis
partnership,eachstakeholderseesadifferentaspectofthepartnershipthroughtheir
viewfinder.Walmartmustkeepthesevariedperspectivesinmindwhendevelopinga
communicationscampaignthatdeliversanaligned,overallstrategicmessage,butmakes
eachconstituentfeeltheirquestionsareansweredandportraysWalmartandBhartiinthe
bestpossiblelight.
Thebottomlineformostconstituentsis,Whatsinitforme?Theywantto
knowhowtheinformationbeingcommunicatedwillimpactthem,theirfamilies,their
businessesandtheircommunities.Soaclearandconcisemessageiscrucialtoavoid
miscommunicationormisinterpretationbyconstituents(Argenti,Howell&Beck,2005).
AsDellsCEOsuggested,modifyingamessagetofitthedifferentconstituentsis
valuableandimportanttoaddresstheiruniqueconcerns.However,itshouldbe
consideredthatthemessagewilllikelymovebeyondthetargetedgroup.SoasCendant
learned,whengrowthisinvolved,Walmartmustcreateaclear,controlledandconsistent
messagetobefollowedstrictlytoensurevariousconstituentsdontperceivethecompany
astoocomplex(Argenti,Howell&Beck,2005).
Havingaunifiedbrandmessage,suchasImprovementandthenlookingatthat
messagefromtheperspectiveofeachconstituentwillallowWalmarttospeakin
harmony(Argenti,Howell&Beck,2005)butstillalloweachstakeholdertofeelaware
ofhowthepartnershipwillimpacttheirlife,ideallyphrasedtosoundasthoughitisfor
thebetter.

Inexaminingthefourquadrantsofthestakeholderanalysis,Walmartmust
considerthelevelsofinfluenceandsupportthatapplytoeachstakeholderwhen
formulatingthespecificmessageforeach.
StakeholdersintheEmpowerquadrantofferhighsupportbutlowinfluence.In
thiscase,Walmartshouldconsidersettingexpectationsforperformancebutwork
diligentlytomaintainopenchannelsoftwowaycommunication.
TheconstituentsintheMonitorquadrant,withlowsupportandlowinfluence,
mustbetreatedwithrespectbutalsoacknowledgedasaneedtoknowcircumstance.
StakeholderswithhighinfluencebutlowsupportareintheEngagequadrant.
mustbepersuadedtobuyintothecampaign.Theseconstituentshaveasignificant
opportunitytodamageWalmartsreputationandevenitslevelofsuccessiftheydonot
agreewithitsactions,
Thefinalquadrant,Partner,representsstakeholderswhohavebothhighinfluence
andhighsupportoftheWalmartpartnership.Thesepartiesareinadecisionmaking
positionandtheirreactioncouldheavilyinfluencetheotherconstituents.Withthatin
mind,Walmartmustnowcreatesomeprimarystrategiccommunications.
Although,thereisavastrangeofconstituentstocommunicatewithregardingthe
jointventure,theprimarymessagingcoalescesaroundfourkeythemesthatWalmartcan
leveragetoreinforceitsdecisiontoentertheIndianorganizedretailmarket.Focuson
theseprimarythemescandrivefinancialconfidenceandmarketsupportfromvarious

stakeholdergroups,ifthemessagesarecustomizedtoberelevanttoallaudiences
(Argenti,Howell&Beck,2005).

ThefirstmessagingopportunityforWalmartistotakeadvantageofitsabilitytobring
affordableproductstotheIndianmarket(Bose,2012).Byleveragingthestrengthofits
currentsourcingmodel,WalmartcanbringnewmerchandisetoIndiaatpriceadvantages
thatcompetitorsunlikelyhavetheresourcestomimicduetothesheervolumeWalmart
purchasestosupplyitsglobalretailnetwork(Bose,2012).ForWalmart,thisadvantage
willlikelyfurtherimproveitspricingadvantage;highervolumeshouldequateto
best/lowestwholesalepricingfromsuppliers.Tobringthismessagetomarket,Walmart
shouldconsidercreatingamarketingcommunicationsplantargetedatthegeneralpublic
topromoteproductsofferedbythecompany.Throughmassmarketingcommunications
andadvertising,Walmartcansettheexpectationthatitofferscompetitivepricingand
accesstoproductsthatotherretailersmaynotbeabletomirror.Forthewholesale
division,Walmarthastheopportunitytoframeitscommunicationstolocalretailersto
reinforcecompetitivepricingthroughitscashandcarrybusiness.Similartothemessage
forthegeneralpublic,Walmartshouldalsoleverageitsabilitytosupplyavastnumberof
products,someofwhichmaynothavebeenreadilyavailablethroughotherwholesalers.
ThesecondmessagingopportunitythatWalmartshouldfocusonisthe
contributionsthatthecompanywillmaketotheretailinfrastructureinIndia(Bose,
2012).AlthoughthiswillbethecruxofWalmartsdistributionstrategyinthisnew
market,itwillalsocreatebenchmarkpracticeswithinthecountry,whichinturnmay

forcecompetitiontoraisestandardsinthemarketplaceinordertocompete.Thiswork
willbecontingentonWalmartsettingclearexpectationswithsuppliers,regulatorsand
industrycoalitionslookingtoadvancetheinfrastructureforIndianorganizedretailsector.
Byleadingstructuralcontributionstotheretailindustry,Walmarthasanopportunityto
emergeasamarketleaderandtosetstandardsthatitalreadyhasinplaceforother
markets,thussupportingthedevelopmentofamoreefficientandinnovativemarketplace.
Thismessageshouldprimarilybetargetedatcompetitors,suppliers,regulatorsand
governmentagencies.
ThethirdareaofopportunityforWalmartistocommunicatethepositiveimpacts
WalmartcanhaveontheIndianeconomythroughjobcreationintheIndianmarket
place.Withplanstoexpanditsbackendinfrastructurealongwithwholesalecashand
carryoperationsandfranchisedretailoperations,Walmartwilllikelyhirelocalresources
forthiswork.Additionally,theconstructionindustryaswellastruckingindustryinIndia
willbenefitfromtheincreasedneedfortheirservicesifWalmartissuccessfulinbuilding
outthebackendinfrastructure.Primaryaudienceforthesemessageswouldinclude:
regulators/governmentagencies,labourunions/tradeorganizations,prospective
employees,mediaandshareholders.
Andthefourththemeforourprimarystrategiccommunicationwouldbetocreate
discussions,partnershipsandinitiativesinthesociopoliticalenvironmentofIndia.
Walmartsreputationforcorporateandenvironmentalresponsibilityisnotenviableby
anycompanyintheworld.InWhenSocialIssuesBecomeStrategic,Bonini,Mendonca

andOppenheimtellusthatcompaniesnotonlyneedtounderstandthesociopolitical
landscapethatsurroundanorganization,butalsoneedtostepupandtakeleadershipin
theconversationanditsdevelopment.Itcannolongerbeareactionarysituation,but
rathershouldbeatthecoreofthebusinessstrategy(2006).Bygettinginvolvedinthe
bettermentofIndia,withregardstotheenvironment,employeewelfareoranyother
sociopoliticalconcerns,Walmartcanpotentiallyshirktheinevitablebacklashfrom
activistagencieswhoseeWalmartasanunnecessaryevil.Ratherthanbeingviewedasa
foreigninvader,creatinghavocinIndiaonlyformonetarygain,itmightbeableto
changeopinionsinstantlybydoinggoodworksinthecommunity.Thesecommunications
wouldlargelygotomediaoutlets,governmentagenciesandregulators,shareholdersand
thegeneralpublicofIndia.
Furthermore,wewouldberemissifsecondarymessageswerenottakeninto
considerationforfuturecommunications.Asthepartnershipadvances,Walmartwillneed
todoongoingcommunicationswithkeystakeholdergroupsinordertomaintainmarket
andconsumerconfidence.
Ascompetitorsemergeorgrow,marketingcommunicationsshouldbeconstantly
lookedattoensurethatthegeneralpublicmaintainsapositiveviewofthecompanyand
isremindedofthevaluedeliveredthroughWalmartretailandwholesaleoutlets.
Suppliersmustbekeptintheloopregardingmarketdemandsandshifts.Government
agencies/regulatorsmayhaveaneedforongoingreportingofthepartnership.Investors
andtheanalystcommunitywillrequireregularupdatesoffinancialperformanceinthe

formofquarterlyearningscallsandannualreports.Environmentalagenciesandother
stakeholdergroupssuchaslabourunionsandadvocacygroupswillbeinterestedin
developmentsthatmayimpacttheirownstakeholder.Therealestateindustrywillbe
interestedingrowthplans.Walmartwillalsowanttocontinuetomonitormediaportrayal
ofthepartnershipinordertomanageandcurbanypossiblepublicrelationsconcerns.
Competitorsshouldbemonitoredbutalsoapproachedifopportunitiesarisetofurther
buildalliancestoensurethecontinuedgrowthoftheIndianorganizedretailindustry.
Andofcourse,ongoingcommunicationswithemployeeswithinthecompanyiscritical
tomaintainingmoraleandcorporatestewardship.
Throughoutthelifecycleofthepartnership,leadersshouldcontinuetomonitor
andassesscommunicationsneedsandmatchthemtothechangingneedsofthebusiness
(Arengti,Howell&Beck,2005).Communicationssupportingthispartnership,will
requirevigilantmonitoringofmanyconstituentsandshouldbepartoftheoverall
corporatestrategy(Arengti,Howell&Beck,2005).Beyondthetacticalelementsofthe
communicationsplan,seriousconsiderationshouldalsobemadeastohowbothBharti
andWalmartleadersinteractandcommunicatewitheachotherandaboutthepartnership.
Byleveragingstrategiccommunications,leadersofbothcompaniescanshapepublic
opinionandsupportofthepartnership.

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