PROJECT PROPOSAL

INTERNATIONAL BUSINESS

Section D Group No. 6 Rajnish Khurana Rohitash Palsania Vikram Virkar Amit Singh K Yogiraj Hanumant Shipra Agarwal PGP/14/170 PGP/14/173 PGP/14/190 PGP/14/194 PGP/14/198 PGP/14/301

Objective:
To explore the strategies adapted by Wal-Mart while entering India and to analyze whether it can successfully replicate its business model in India

Key Issue:
1) To enter a market where even domestic retail players struggle to make profits 2) To identify the characteristics of the Indian retail industry which makes it difficult for the (foreign) organized retail sector to flourish 3) To identify the unique challenges foreign players face in the Indian market 4) The strategy which world retail giant had to adapt to survive in the Indian market 5) The problems faced by foreign players like Wal-Mart while entering Indian market 6) The reasons for the joint venture with the Indian conglomerate Bharti Enterprises and the rationale behind choosing Bharti as a JV partner 7) Whether Wal-Mart can copy its successful retail model in the Indian context or what localization Wal-Mart adapted to flourish in the Indian market 8) What Wal-Mart has that gives it a confidence to excel the market where big guys like Tata, Reliance are still struggling for survival To analyze long term and short term strategies of Bharti-Wal-Mart India, to flourish in Indian retail market

Methodology:
To fulfil the objective of case writing and to provide greater depth for understanding the problem we are proposing top down approach. In this approach we will highlight the issues from economic, industry and then from companys perspective. We will look at how Wal-Mart evolved in USA and achieved huge success. The case will also discuss about core competencies of the company which provided it competitive advantage. Then we will look at operations of Wal-Mart outside USA. The case will present economic condition of India and how it affected domestic and as well as foreign players in retail industry. Also it will have trends in retail industry of India and effect of various environmental factors.

The case will be built mostly on secondary data present in public domain (news articles, paid databases, others). The details of tentative sources are mentioned in the data source section.

Case Outline:
The tentative case outline is as follows:

Introduction:
This will give an introduction to the case and key issues that the case is trying to address. The case aims at understanding the feasibility and challenges of adopting the Wal-Mart business model to the Indian retail market in the context of the unique political, social, demographic, economic and legal environment of India

Wal-Mart started its business in India in collaboration with Bharti Enterprises in August 2007. The joint venture is known as Bharti Walmart Private Limited. Currently joint venture is providing wholesale cash and carry and back end supply chain operations. The diagram below shows the current function of the organization.

Wal-Mart also exports variety of products from various suppliers in India to its other stores across the globe. Apparel, home textile, leather accessories, jewellery are major exports categories from India.

Wal-Mart is known as worlds largest retailer but in India due to strict FDI norms in multi-brand retailing so presently it has only wholesale cash and carry business. Moreover, Wal-Mart success is always attributed to very efficient supply chain

management, which provide cost savings and benefits are transferred to the customers. But absence of organized supply chain in India leads to no forecasting of demands and hence manufactures lose their bargaining power with middle man. To overcome these issues is one of the biggest challenges of Wal-Mart in India. Further Wal-Mart lost its opportunity to have first mover advantage in retail sector as handfuls of Indian companies are already operating in the sector and they have already occupied prime locations. So when the Indian government will allow FDI in retail it will face fierce competition from existing players.

History of Wal-Mart:
This will cover a brief history of Wal-Mart the global retailing giant which will include its journey from backwater retailer to the worlds no 1. , its global footprint and associated timelines.

Wal-Mart Business Model:

This section will discuss in detail the unique business model through which Wal-Mart creates value for its customers. This will include all the activities beginning from procurement, supply chain management, marketing, store formats, promotion schemes such as everyday low price , work culture etc and how all of these activities are woven together to form a unique value proposition for the customers.

Wal-Mart Global Expansion Strategy:

This will give us insight into the global expansion strategy of Wal-Mart- how has it conquered various markets across the world eliminating all the local players. The main focus would be on emerging markets which resemble Indian retail market to understand how it has adapted its business model to suit the specific requirements of these markets. In addition, we will also discuss example of some markets/countries where Wal-Mart has not been so successful.

Indian Retail Market:

This section will analyze in detail the retail market in India including the projected future growth rates, the demographic characteristics of Indian consumers including the distribution of consumers amongst rural and urban areas and across various income groups, existing retail formats in India, the unique requirements of the Indian consumer etc. The various political and legal restrictions pertaining to India retail

segment would be discussed. Other unique characteristics of India in terms of its economic, social, technological environment will be discussed. This will help us in understanding the critical success factors and challenges for Indian retail market.

The current Indian retail industry can be categorised into three formats: Mono Brand retails: it is exclusive showroom of a brand either owned or franchised by a manufacturer.

Competition in the Indian Retail Market:

This section will contain the details of existing formats and existing players in the Indian retail segment, the challenges that they are facing and the business models that they have adopted to understand the level of competition.

Walmart-Bharti Joint Venture:

This section will discuss the details of the joint venture between Bharti and Wal-Mart to open cash and carry stores across India. We will also discuss the current status of these stores and try to evaluate the success of this format in India with the use of empirical data. The case will conclude with the managerial question that given the unique characteristics of Indian consumers and the Indian retail market is it the right move for Wal-Mart to enter the Indian market and can it replicate its success in India with the same business model that it has followed in other countries and If not how can it adapt its business model to the unique requirements of the Indian market This analysis would be based on data collected from various sources. The data will include country wise sales of Wal-mart, projected growth rate of Indian retail market, data on consumer base in India and its distribution based on various dimensions, sales and revenue data of other players in the Indian retail segment, data on geographical presence of various organized players in India etc. In addition we would try to obtain some data related to the sales of recent cash and carry stores opened as a part of Bharti-Walmart joint venture.

Data Sources:
http://walmartstores.com/AboutUs/276.aspx walmartstores.com/download/1996.pdf www.ibef.org/attachment/WhattoIndia.pdf www.moneycontrol.com News Business Business News www.zdnet.com/blog/india/walmart-opens-global-it...india/266 210.212.115.113:81/AK.../ WalMartCaseMaterial/WalMartCaseMaterial.doc en.wikipedia.org/wiki/Walmart studyshare.in/share/showthread.php?2330-Walmart...Walmart...India orums.sulekha.com coffeehouse business-strategy-case.blogspot.com/.../walmart-entry-into-indian-retail-sector.html 210.212.115.113:81/.../Lect.14 -15..Bharti Walmart%20Case%20Study%20questions.pdf walmart.3cdn.net/dd4fd53b314948b9c1_98m6beokd. pdf www.managementparadise.com ... Articles !! cdn.walmartstores.com/.../WMT2010GlobalSustainabilityReport.pdf walmartstores.com/download/1996.pdf www.ibef.org/attachment/WhattoIndia.pdf