This Presentation has three parts; 1.Walmart strategy to penetrate Indian market 2.Travel firms incurring huge losses 3.Mobile-A huge revolution in India(India is the world second largest telecom market by subscriber base)

1. MBA HANDBOOK-6

2. Giant takes a wholesale Bite
Creating Brand Walmart in India
Shelving its retail FDI plans,Walmart is focusing its
energies on mom-and-pop stores, small traders,
hoteliers & caterers in a cash-and-carry market
pegged at $ 300 billion

3. Walmart Case Study
Walmart is a one-stop-
shop from which Chetan
sources nearly everything
needed for his restaurant
from the furniture &
groceries to decorative
pieces & cutlery
Shopping on alternate
days, Chetan saves
upto Rs.3 lakhs a
month at the over
60,000 sq.ft Best Price
owned by Walmart
Chetan Sharma
(owner of Raj
Rasoi food court
in Agra)
In Andhra Pradesh, every
Sunday evening,
Sambasivarao visits the Best
Price outlet locate about 45
kms from Vijayawada. It is
here that he buys the home
appliances, furniture pieces,
confectionary, cereals & a
range of other items for his
shop
Advantages to Rao;
-Huge savings in
transportations costs
-Wide range of products
Sambasivarao
(owner of Sri
Krishna Best
Sale
supermarket)

4. Walmart’s journey to India
After waiting for more than 7 years for the elusive
Govt.nod for Foreign Direct Investment(FDI) in retail,
Walmart is now focusing its energies on the likes of
Sharma & Sambasivarao. Walmart has found its mooring
in the “cash-and-carry wholesale format” where FDI upto
100% is permitted
Walmart’s target clients include;
-Kirana or mom-and-pop store owners
-small traders
-hoteliers
-caterers
Krish Iyer who took over as President & CEO of
Walmart India after the company called-off its joint
venture with Bharti Enterprises in late 2013 says-
“Growth in India is driven by domestic private
consumption & not exports. With the current business
model of cash-and-carry where Walmart sells to business
members there is a great potential with the fairly low
penetration of modern retail

5. India-A growing market for retail
According to Industry
estimates, by 2020-the mom-
and-pop-store business is
expected to grow by $800
billion of which $140 billon
will be in India
Krish Iyer had to virtually re-build
Walmart India after the company was
involved in a lobbying controversy
followed by massive staff exodus in
2012-13.This was challenging but
Walmart needed a focused approach.
Cash-and-Carry was the logical
choice
-Efforts to grow the company’s customer
base include a strong “digital strategy”.
Iyer believes that a vast majority of sales
even in brick-and-mortar stores is digitally
influenced
-Walmart has rolled out a B2B website
where members can check the products or
place orders on the web or call at the store
& make enquiries while placing an order
-Walmart adopts a hand-holding strategy for small store
owners who buy products from Walmart.
Ex: Walmart sales executives help store owners plan the
store layout, product category sequencing, training store
employees on standards for display & audit
-Also Walmart’s Business Development Associates visits
shops & hotels to sign-up new members. Members are
enrolled within a 20/40 Km radius of each outlet to ensure
that customers do not have to spend more than 30-40
minutes in commuting
-Walmart Transportation Services has been an
cost saver to all shop owners.
Ex:For each carton of products, Walmart
charges Rs.11 for transportation including
loading & unloading whereas other
distributors & wholesalers charge Rs.35 per
box

6. Cost Advantage to shop
owners & Walmart
strategy on pricing
The biggest draw at
Walmart is the availability
of fresh fruits &
vegetables at the most
reasonable price. The
prices are atleast 15-35%
lower than market rates
Moreover, Walmart have
discounts & periodic
promotional offers.
Overall shop owners after
shopping save Rs.2.5
lakh a month
What works for Walmart is
the Direct-to-Store Model. All
the suppliers with whom
Walmart works with such as
Nestle, Coke etc supply
directly to Walmart outlets
Walmart also undertakes
‘joint business planning’
to make sure that the fill
rate(inventory’s ability to
meet demand)of the
particular product is good
How is Walmart able to
offer this pricing
advantage?
- Walmart heavily invests
& maintans a robust
“supply-chain”
Apart from an annual planning
exercise, a Walmart Team
interacts regularly with the
companies to iron-out issues on
a real-time issues
-Walmart’s software-Retail
Link, provide suppliers with the
information they require around
replenishment

7. Cost Advantage to shop owners &
Walmart strategy on pricing
-To strengthen Walmart’s
supply chain, it is moving
to procure directly from
farmers in all the States
where it operates
Ex: Walmart stocks;
Apples from Himachal
Pradesh
-Onion from Nashik
-Sweet Lime from
Telangana
-Vegetables from
Punjab & Uttar Pradesh
(Walmart source directly from
farmers to get fresh produce at
the right price so that their
members can pass-on the
savings to the end-customers)
-In Hapur, Lucknow,
Telangana & in some
areas of Maharashtra,
Walmart is working with
irrigation companies &
introducing best
agricultural practices to
farmers.
-Farmers are free to sell
to other regions &
retailers & Walmart does
not enter into any
exclusive tie-ups with
them
-Walmart’s store
expansion in India has
been slow. Only 21
stores across India
-Walmart requires
about 4 acres to build a
50,000 to 60,000 –sq.ft
store. This requires lot
of time
-Acquiring real-estate
is a time consuming
activity in terms of
legal requirements &
due diligence

8. Battle for every store
Walmart has a model that
works but not necessarily
everywhere. It requires a certain
type of real-estate which is not
easily available in metros & big
cities.This is why the giant is
focusing on Tier-2 & Tier-3 cities
The penetration of mom-and-pop-
shops & traditional stores continues to
be higher in Tier-2 & 3 cities. They are
attractive opportunities & makes sense
-Walmart aims to add at least 50
stores to its portfolio by 2020
By understanding the
preferences & basing the
decisions on the
customer data, Walmart
is able to meet the
specific needs of buyers
But can a new player like Walmart compete
effectively with the likes of Metro-Cash &
Carry which has been in India since 2003 or a
local giant like Reliance. Walmart believes yes
because it has its own membership data &
Walmart knows what a member would want in
Punjab or UP or Telangana
-Walmart believes that “Retail is a very local
business” & is dependent on how well you address
the customer segment in a given geography.
-Just being a large or established retailer nationally or
globally is no guarantee for success. It all comes
down to fighting each store battle independently

9. Journey hasn’t been
Profitable for India’s Top
Travel portals

10. Loss-making airline
industry whose
tickets they sell
Limited internet
penetration until
recently
Sudden surge in mobile
internet leading to rapid
shifts in business models
& additional investment
The portals started with
airline ticketing as their
core but in the last few
years shifted majorly to
hotel bookings &
packages
A highly
unorganized
hotel industry
Issues that travel portals face

11. Poor Show
• Cleartrip posted a
net loss of Rs.29
Cr for the year
ended March
31,2015
• MakeMyTrip said its
net losses for the
fiscal second quarter
through September
more than doubled to
Rs.80 Cr
• Cox & Kings, on the
other hand posted a
net profit of Rs.40 Cr
in the July-
September quarter
Thomas Cook has posted a net profit of
Rs.6.7 Cr in the July-September quarter

12. •Neither Yatra nor Cleartrip has
posted an annual net profit yet
•MakeMyTrip last reported an
annual net profit in fiscal 2012

13. Travel Portals that have outpaced other competitors
•Cox & Kings,Thomas Cook & Riya
Travels have been profitable because;
-the packages they sell offer fatter
margins
-Due to their wider market reach

14. The travel portals started with
airline ticketing as their core
business but in the last few have
shifted a large part of the
business to hotel bookings &
packages
For instance: The net revenue
mix for MakeMyTrip in the
second quarter of FY 2016 was
71% from non-air businesses &
29% from air business, a
complete flip from a few years
earlier
Online hotel booking
market has just
opened-up due to
smart phone
penetration &
availability of better
bandwidth
-According to Yatra.com,the
online booking in these sectors
was still low. Internet in India
took more than a decade to
move from 10 million users to
100 million & three years from
100 to 200 million.
-It took only a year to move
from 300 million to 400 million
users pushed to a large extent
by the smart phone boom &
mobile internet
Online travel portal-A Brief description

15. Humble Mobile’s journey to be the greatest
enabler of the century
(India is now the world’s 2nd largest telecom market by subscriber base)

16. During mid 1990’s Mobile phones
were a luxury
Calls were priced at Rs.16 a
minute
Mobile devices were available for
anything<than Rs.45,000
After the telecom sector was
opened upto private & foreign
players, its contribution to
GDP increased from 0.7% in
the 1980’s to 5.7% in
2008(National Council of
Applied Economic Research)
Telephone
Connections(fixed line)
grew at a leisurely pace
from 9,80,000 in 1971 to
5.07 million in 1991
Telephone subscriber base
has expanded at a
compound annual rate of
19.22% from 200 million
in 2006-07 to 1 Billion
in 2014-15
Indian Telecom Journey

17. As India opened up its
economy in 1991 foreign
players invested billions of
dollars in setting-up mobile
networks
National Telecom
Policy(NTP-1994)
This policy allowed
foreign companies to hold
upto 49% stake in telecom
companies
National Telecom Policy(NTP-
1991)
This policy allowed the industry
to move from a Fixed License
Fee structure to a revenue-
share mechanism & cost-
oriented telecom rates
24*7 connectivity
From being a communication
device, the mobile phone has
metamorphosed into an
enabler in the digital world
Smart phones & Tablets are
delivering mass amounts of
digital content to the fingertips
of consumers
Setting of Telecom Regulatory
Authority of India(TRAI)
This body was set-up in 1997 to
remove govt .control over policy-
making & rates
Also the foreign players were
allowed to increase their stake in
Indian telcos to 74%
Launch of 4G Services
Roughly 17 years after the first
call using a cellular network
was made from Kolkata, the
city saw the launch of the
fourth-generation mobility
services in 2012
What changed the Telecom Sector in India
Mobile as a mini Bank
The deepest impact of new-age
mobility has been felt by the
Financial Services sector
A phone is now being used to
deliver financial services to people
who do not even have bank
accounts
Mobile Banking as emerged as
one of the most innovative
products in the financial services
sector

18. Some quick facts of Telephone industry
Before liberalization telecom
industry was the domain of the
Govt & telephone connections
were more of a status symbol
than utility
India’s teledensity, i.e, the number of
mobile connections per 100 people has
improved from 2.33 in 1999 to 80 in
2015
Today, the penetration of mobile
telephony is 45% in rural & 55%
in urban India
Wireless segment accounts
for 97.36% of total
telephone subscriptions
Nowadays, governments
are also reaching out to
their citizens using mobile
devices as an efficient
channel
Today, India is the world’s 2nd largest telecom
market by subscriber base(1 Billion in 2014-15)
India has also emerged as the 2nd largest country in
terms of internet subscribers. India had 267.39
million internet subscribers as of December
2014 & a large part of these customers accessed the
internet on their wireless mobile devices

19. Anup George Rebello
Asst.Manager
The Catholic Syrian Bank Ltd
(anuprebello.6@gmail.com)
http://www.slideshare.net/anuppresentations