Moreover the growing number of working youth and women leads to increased consumer spending and purchasing power. The change from a S&B to B&P mentality, accompanied with an enhancement of the living conditions let the Indian retail market boom. The JV will require a lot of co-operating and cross cultural management. Moreover its experience in retail is very limited.
It has built a huge network of suppliers and business partners which will be useful for the JV.Ĭompared to Wal-Mart Bharti is a small company, which could lead to an imbalance of power.
Its high presence in India combined with its deep knowledge of the growing consumer market can help to extend WalMart’s retail expertise. Strengthsīharti has grown the last few years by building global partnership.
The SWOT analysis below will evaluate how well Bharti will fit into Wal-Mart’s operating plan. Regarding the future venture of Bharti, Wal-Mart will have to deal with numerous challenges range from strict laws and regulations to cultural differences. Based on its EDLP Strategy, which requires efficient processes, Wal-Mart stands out from its competitors and is enjoying sustained competitive advantage. Leveraging technology enhances planning and strengthens operations to improve the supply chain, which is costly and difficult to imitate. Moreover its main strategy is accompanied by the use of IT, which forms the heart of its business. Wal-Mart established a close relationship with its suppliers to bargain prices to lower its own prices and to force its competitors to do so as well. Due to this valuable strategy, Wal-Mart is enjoying the cost-leadership and is therefore market leader in the global retail industry. Wal-Mart’s core resource and competence is serving its customers with EDLP. However low prices combined with a differentiation strategy would be the key factor in order to stand out from the competitors and to gain competitive advantage. In conclusion the Indian retail industry is considered as highly competitive, where it is difficult to sustain through a low-cost strategy. The JV is facing competition on the one hand from its main competitors on the other hand from the dominating unorganized retail stores. This force is considered to have the main influence on the industry and is therefore very high. The weak supply chain management, which is rather considered as the main factor of the low bargaining power of suppliers, is based on a poor infrastructure, which can cause delays in transportation. However Wal-Mart is known for its EDLP proposition which is essential to meet the Indian customer needs, who are very loyal to the lowest price. Regarding the Indian market, which is mainly dominated by unorganized retail, combined with the pressure on low margins, the bargaining power of buyers is very high. Nevertheless the mentality is changing from “Save and Buy” to “Buy and Pay”, there are still price sensitive Indians. The fact that the emerging Indian retail sector is ranked among the most promising sectors, the advantage of being the first mover is essential in order to gain competitive advantage.Ĭonsidered as middle, the threat of substitutes do not dominate the competiveness of the retail industry, due to the growing population, who have to buy their groceries at some places anyway, which they need for their daily life. The competiveness of the Indian retail sector will be evaluated, by applying the Porter’s 5 forces model.ĭue to the competitive pressures of new entrants combined with stringent laws and regulations on FDI, this threat is considered as middle. On the point of creating a JV with the company Bharti, Wal-Mart has to resolve numerous challenges, range from the cultural differences to problems with its supply chain to strengthen its competitiveness, gain customer loyalty and becoming the “go-to place”. This report analyses and evaluates the situation of the retailer Wal-Mart in the Indian industry.