An assessment of walmart's existing business strategy and recommendations on the basis of same. Swot Analysis, Competitive analysis and Key success Factors

1. Presented By: Mukul Gupta, Rohit Thareja,
Rishi Nair, Chand Chopra.

2. KEY FINDINGS
• With the opening up of Indian Retail sector for FDI up to 51% in
multi-brand retail, India is set to become hub of Multinational
Retailers from across the Globe.
• Increasing per capita income and changing consumption
pattern are the key drivers of fast growing Retail sector in India.
• Organized retail are expected to increase its market share from
5.7% in 2011 to about 12%by 2016. Major gainers are expected
to be the new entrants like Wal-Mart and Carrefour.

3. RECOMMENDATIONS
• Wal-Mart should apply its ‘Repeatable formula’ of Lowest price -
supported with efficient supply chain and Information technology
for Indian markets as well.
• Given the compliance with Regulatory norms and fast market
penetration, Wal-Mart to go for strategic alliance – joint venture.
Success depends on implementation within time-limits.
• Wal-Mart should focus on local customer preferences, strategic
locations, regional diversity & incorporating Indian values for
building a sustainable business model for India.

4. CORPORATE LEVEL DECISION- ENTERING INDIA

5. INDIAN RETAIL MARKET- GROWTH AND
OPPORTUNITIES
• Indian Retail Industry had total revenues of $470 bn in 2011.
• CACG between 2007-11 stands at 10.7%.
• Data Monitor Research estimates an industry size of $675 bn
between 2010-2014 with CAGR of 14%.
• Fast Urbanization and young demographics are key drivers.
• Changing preference will boost 65.4% Hypermarket and Super
markets in India.
• With rising per capita income & changing consumption pattern, retail
industry to become massive in next 5 years. Organized retail &
hypermarkets to have a even higher proportionate growth.

6. PROFITABILITY ANALYSIS: PORTER’S 5 FORCES
With fast increasing demand & proposed model of cost leadership, Indian Retail Industry looks
substantially PROFITABLE.

7. SWOT ANALYSIS
Strengths:
1. Deal with Suppliers - Cost Leadership
2. Efficient Supply Chain
3. Strategic Location/ Facilities at Stores
4. New technology implementation.
Weaknesses:
1. Unable to adapt to different cultures/countries like Germany.
2. Heavily dependent on ‘bulk sales.
3. Late entrants.

8. Opportunities:
1. New Economies - India/ China/ Brazil.
2. Rising disposable incomes.
3. New channels – Marketing/ Internet based models.
4. J.V. with some leading players.
Threats:
1. Restriction on FDI e.g. India.
2. International law against dumping
3. Regional competitors
4. Law against ‘Monopoly’– Anti-thrust policies.

9. KEY SUCCESS FACTORS FOR INDIAN MARKETS1
• Cost Leadership – Attracting Masses
• Strategic Retail Outlet Locations.
• Wide Range of Goods/ Variety - keeping ethnic & economic
diversity in mind.
• Sales Promotion/ Marketing Campaigns in festive seasons.

10. STRATEGIC GAPS IN INDIAN RETAIL SECTOR
• Limited mainly to Metros, Tier-I cities. Huge potential lies in sub-
urban, rural markets, Tier-II & Tier-III cities.
• Geographical Gaps – Markets like North East are yet to be
explored.
• Truly Global Shopping Experience missing in Indian Retail
Stores.
• Wal-Mart has to incorporate Indian Values & preferences while
designing the business model. Focus on strategic gaps critical
for its eventual success.

11. COMPETITORS IN INDIA
Given bargaining power (with FMCG companies) along with its Logistic& IT support, Wal-Mart is
expected to tackle its competitors. Key lies in capturing new geographies & finding strategic
locations

12. KEY CHALLENGES IN INDIA
1. FDI Restrictions:
FDI Restrictions of 51% on Multi-brand Retail. Proposal for
increasing the cap to be discussed in winter session, but chances
are low.
2. Social & Political Resistance:
A strong opposition from certain political parties is certainly
expected in some pockets of society – local retailers, dealers would
protest.

13. 3. Countering deep penetration of ‘Mom & Pop’ Stores:
Especially in Tier-II & III cities, the network of ‘ Kirana Stores’ is
extensive. Also sales on credit facility is available which Wal-Mart
cannot do.
4. Poor Infrastructure will cause friction:
Indian standards of roads, ports & freight facilities are way below
global benchmark. It will lead to inefficiency in the value chain.
5. Regional Diversity:
Challenge to have tactics according to regional/ ethical
requirements
Wal-Mart need to appreciate & accommodate each of the above challenges into its strategy- in
order to reap Benefits from the ‘Indian Retail Growth Story’.