It is India’s leading business conglomerate with interests in telecom, agri-business and infrastructure projects, operating primarily across India and in the Seychelles.
It was established in 1976 and it's primary industry is in the field of telecommunications via its subsidiary companies Bharti Airtel (mobile telecommunications) and Bharti Teletech (wired telecommunication services and telephone handsets).
Bharti also has a joint venture with ‘Field Fresh Foods Pvt. Ltd’, for the global distribution of fresh fruits and vegetables.
Its approximate market capitalization is US $ 26 billion.
Recently, the company has tied-up with Wal-Mart for opening a chain of retail stores all over India.
Wal-Mart Stores, Inc. is not only the largest retailer in the world, it now also ranks as the largest corporation in the world.
Wal-Mart was founded in July 1962 and has about 6,400 stores, including some 1,200 discount stores, 2,000 discount and grocery stores and 565 warehouse stores.
Its Sales Revenue for the fiscal year ending January 31, 2006 was US$ 316 billion.
The Joint Venture
On November 27, 2006, Wal-Mart Stores Inc. and Bharti Enterprises Ltd. signed a Memorandum of Understanding (MoU) to explore business opportunities in the Indian retail industry. This joint venture marked the entry of Wal-Mart into the Indian retailing industry.
Bharti's JV with Wal-Mart for cash-and-carry (wholesale) will be a 50:50 venture with a condition that if any strategic or financial investor were to be brought in then both partners will dilute stake equally.
Bharti Enterprises plans to invest up to US$ 2.5 billion and Wal-Mart Stores Inc. hasn't said how much it will invest in the proposed venture.
The front-end operations will be fully owned and operated by Bharti while the back-end supply chain management including logistics and retail chain management will be provided by Wal-Mart.
First store to be opened on 15th of August 2007.
Bharti-Wal Mart to have Hypermarts and Neighbourhood stores.
Wal-mart to get 3% royalty for their brand name.
World class stores with good customer service
Everyday Low Prices (hopefully)
Quality assortment of merchandise (Not that Walmart has the best quality in US but they must be good for current Indian retail standards)
More related jobs across the supply chain --- Really an understatement. Imagine all the producers and their suppliers and so on.
Inflow of massive capital.
Increased government revenue.
Development of infrastructure.
Elimination of intermediaries.
DISADVANTAGES OF THE MERGER
Negation of the kirana stores.
Walmart’s poor record :
- labour laws
- Union busting
- Exploiting small
Increased monopoly after big players do come in booming indian retail market.
The size of walmart is such big that it could easily flip around the consumption pattern of india .
Viability Of The Joint Venture
The punch line of Wal-Mart's is always low prices this strategy will help them tackle the low price retailers for a long term sustenance
Wal-Mart is known for its Supply Chain Management which results in less wastage and low costs.
Wal-Mart would revolutionize Indian retail with introduction of advanced technology and wider range of products .
Since Bharti is already aware of the Indian market. It will save Wal-Mart a lot of time and energy to overcome the resistance at early stages.
Wal-Mart will not have a huge impact on Indian retail. It may take a few years before we see that the kirana stores totally wiped out.
The retail outlet might have to provide home delivery services as we are used to home-delivery in most cases because when we buy in bulk we do not have our own conveyance to transport it.
Again many of these customers are used to buying on credit and they have a good interpersonal relationship with the kirana stores which wal mart is known for.