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Copy of FINAL PROJECT
Transcript of Copy of FINAL PROJECT
Wal-Mart's coming to India, through a partnership with Bharti Group, is being opposed by many.
The primary purpose of this study is to analyze the cultural, political, and economical aspects of the largest international retailer, Wal-Mart, coming to India where millions of people depend upon small businesses for their livelihood.
The other important topics that have been researched and will be discussed are:
a.)The reasons why Wal-Mart wants to enter the Indian market.
b.)Why its entry is opposed by some people.
c.)Why some others want the retailing giant to come to India.
Final Project- WAL-MART IS COMING TO INDIA
In partial fulfillment of the requirements for:
Thursday, June 21, 2012
Professor Lorette Calix
Wal-Mart is known as the world’s largest retailer.
Wal-Mart has developed advanced inventory tracking.
The company does extremely well tracking overall sales of products by certain locations.
These strengths in inventory tracking have allowed the company to advance and grow profits through logistics and supply chain management.
Wal-Mart’s expertise in mastering this part of retailing will allow an upper hand developing their business in India.
Wal-Mart possesses powerful retail branding.
Wal-Mart has the reputation of providing the best value for the money and the ease of convenience due to their expansive product line offered under one roof.
Having such an organized structure will be an advantage in the Indian market.
Another one of Wal-Mart's strengths is the focused strategy for human resource management and development.
One weakness the company faces is the span of control in an international market such as India.
While the company has the ability to control business in the US, these proven methods may not work as efficiently in India.
Operating in a foreign country with different legal regulation, suppliers and overall infrastructure will be a challenge for the company.
The other weakness Wal-Mart must overcome in the Indian retail sector is the ability and flexibility to sell products across many of the sectors (such as: clothing, food, health and beauty supplies, etc.) as some of the focused competitors.
In the US, how consumers purchase goods is very different from the Indian culture. The Kirana’s are what the India consumer are accustomed to.
The enormous size of India’s 300-400 billon dollar retail sectors will allow Wal-Mart to become successful.
Currently the organized retailing is only 2% of India’s total trade leaving 98% unorganized.
The 98% is made up of small to medium privately/ family owned businesses.
With Wal-Mart's financial backing, they will have the ability to take over, merge and form alliances with other global retailers within the Indian market.
The under developed market and growing urbanization will pose great business opportunities to grow as a corporation.
How does it operate?
Sam’s Clubs (Warehouse Membership Clubs)
Combination Discount and Grocery Stores
General Merchandise Stores
Wal-Mart serves customers and members more than 200 million times per week.
In retail outlets, online, and on mobile devices.
In 1991, Walmart became an international company when we opened a Sam's Club near Mexico City. Just two years later, Walmart International was created.
Where does Wal-mart operate?
The Walmart U.S. segment; include the Company’s mass merchant concept in the United States and Puerto Rico, operating under the “Walmart” or “Wal-Mart” brand,
The Walmart International segment; consists of the Company’s operations outside of the United States and Puerto Rico.
The Sam’s Club segment; includes the warehouse membership clubs in the United States and Puerto Rico, as well as samsclub.com.
Corruption and bribery are present in most, if not all, societies; more so in some cultures than others. Truth and honesty are noble ideals, but they are also relative. As managers operate globally, they must be aware of the relativism in each culture regarding acceptance of a tip, bribe, incentive, etc. Different criteria and values between Eastern and Western cultures, for example, determine what is acceptable or appropriate. In developing countries where people struggle to survive, bribes and corruption, especially in the public sector, are endemic to the system, while in industrialized countries, the practice is often more sophisticated, less visible but prevalent. Payoffs to public officials, especially the police, have been reported in the media from Mexico City to the New York Police Department.
Bribery and Ethics in a Global Context
-India is a large, diverse, technologically advancing and poor country.
-India has one of the largest population's in the world with a little bit more than 1 billion.
-India's economy has been growing at an average rate of 8.5% in the last 5 years.
- Even with the global economic slowdown the countries GDP increased by 7.5% in 2011.
Does Size Really Matter?
Wal-Mart may be a victim of its own size and revenues. Wal-mart is the leader in USA, its home country. It is Tesco in UK, Carrefour in France, Metro in Germany, Lianhua in China and Aeon in Japan who are the leaders. And now Tesco is expanding to the USA as well. So while the global boundaries are dissolving the locals are still the front runners.
The Indian Retail Local Market-
India is a huge, multicultural, diverse, economically and linguistically varied country which is on exactly opposite polarity of the world from its developed western countries.
The internationals retailers will have to study closely and reach out to mass market at the bottom of the pyramid or they may end up as niche players, with insignificant impact. The Indian buyer is value conscious at all levels.
Better quality of life
Better education (literacy)
Economic development (employment)
Wider variety of products and extended shelf-life
Pros & Cons:
Diverse culture & workforce
Loss of jobs (Kirana stores)
Possible exploitation and bribes
-Mexico is a big country with a marvelous Future
-Mexico is very technologically advance
-Mexico's economy has been growing at an average rate of 8.5% in the last 5 years.
-Even with the global economic slowdown, the countries GDP increased by 7.5%in 2011.
-Mission: Saving people money to help them live better.
-Walmart knows that price is important to people regardless of where in the world you are.
-Offers the best quality products at the lowest price.
- Create opportunities to help people live better beyond Walmart and Sam's Club.