Wal-Mart is considering expanding into India. India has a large population of over 1 billion people and is the second most populous country. India has a large purchasing power of $3.56 trillion and $3,100 per capita. Foreign direct investment in India has doubled in recent years, and India is ranked highly as one of the most promising countries for business. Corruption levels in India are also favorable compared to other developing countries. The report recommends that Wal-Mart expand into India given the favorable foreign direct investment scores, large market size, and high population density which would aid expansion.
3. Population of India Population over 1 billion in 2009 Second largest country by population India is 1/3 the size of the U.S. (India,2010) 5/2/2010 Wal-Mart 3
6. Foreign Direct Investment 3rd in global foreign direct investments 2nd most promising country for business 5th largest retail market globally Investments doubled in the past 5 years 1.63 FDI confidence score (Foreign, 2010) 5/2/2010 Wal-Mart 6
7. Corruption Perception 3.4 CP index score Favorable comparison with other developing countries 84th on the CPI table (CPI, 2010) 5/2/2010 Wal-Mart 7
9. References CPI table 2009. (2010). In Transparency International. Retrieved April 2010, from http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table FDI confidence index. (n.d.). In FDI confidence index. Retrieved April 2010, from http://mim.promexico.gob.mx/work/sites/mim/resources/LocalContent/210/2/ATKEARNEY_FDICI_2010 Foreign Direct Investment. (2010, February). In India brand equity foundation. Retrieved April 2010, from http://www.ibef.org/economy/fdi.aspx India statistics. (2010). In IndiaStat. Retrieved May 2010, from http://www.indiastat.com/default.aspx India. (2010). In The World Factbook. Retrieved April 2010, from https://www.cia.gov/library/publications/the-world-factbook/geos/in.html 5/2/2010 Wal-Mart 9
Editor's Notes
Wal-Mart has successfullyentered the global market with stores in many countries. We are now looking at expansion into India.
We have stores in China at the present time. India is the next natural potential country to expand our international business. Merchandise can be routed overland or by air through our distribution centers in China. Merchandise can also enter India by sea.
The population of India in 2009 was 1,156,897,766, which makes India the second largest country by population. The land mass of India however is 1/3 that of the United States. The population density of India is much greater than the United States. This will allow us to reach a greater number of people per store.
India has the advantage of a large human capital. The state-run economy has now shifted to a free-market economy. The highest personal income tax has decreased by almost 50%. There is currently no economic crisis in India. There have been more liberal government policy reforms in India. India has a large labor force, although there is a gender bias especially for married women. Women are also provided with less education than men in India. The cost of labor is relatively small compared to the U.S. India is a traditional paternoster country. Religion is an important part of most citizens.(India stats, 2010). The population growth rate for 2009 was 1.407% (India, 2010).
India is still in the developing nation category when it comes to purchasing power parity, though there is enough wealth to support business. In areas of poverty the number will be much lower while in cities it will be much higher and should be the target point for Wal-Mart.
India is currently third in foreign direct investments, as these investments have doubled in the past 5 years. Japan lists India as the second most promising country for business expansion. India is also listed as the 5th largest retail market globally. India is attracting businesses from all over the globe. While foreign direct investment is high it actually represents a low amount per capita. India is still a largely untapped market for foreign investment.India is among the top 5 favored investment destinations. This gives India a strong vote of confidence for the strength of its economy. India rates #3 at 1.64 on the FDI confidence index (FDI, n.d.).
The corruption perception index is not the ideal it does show India compares favorably to other developing countries. Wal-Mart can easily overcome normal business difficulties in this environment with only normal business safeguards in place.
India is a growing market that can well support our business model. There are supplies readily available due to an extremely large agricultural sector. India scores well as a foreign direct investment opportunity with their small per capita investment. The population density will allow us to reach an extremely large market with a single store.I recommend expansion into India.
