Can Wa-Mart Make It In India?

            

Details


Case Code : CLBS153
Period : 2014-2016
Publication date : 2016
Teaching Note :Available
Subject :Business Strategy
Case Length : 03 Pages
Countries : India
Industry : Retail
Organization : Wal-Mart India

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

Ever since Wal-Mart Stores Inc. made its entry into the Indian market, the penetration was sluggish due to several reasons such as the Indian FDI policy in retailing and allegations about the company indulging in illegal lobbying in India. In 2014, Wal-Mart switched its focus to penetrating the Indian ‘cash and carry’ market since making inroads into the country’s multi brand retailing had proved tough for the global retailer. Wal-Mart announced its expansion plans for the ‘cash and carry’ market in the year 2014, a year after its breakup with Bharti Enterprises. The retailer saw new governmental initiatives such as ‘Make in India’ as a huge opportunity. This case presents the expansion plans of Wal-Mart India, with the company hoping to leverage on the ‘Make in India’ initiative. Digitalization and development of smart cities were integral to the ‘Make in India’ initiative, and was expected to facilitate strengthening of infrastructure and logistics. However, there were also roadblocks in the form of a poor backend supply chain and lack of skilled labor in manufacturing, investment approval, etc. The case deals with the opportunities and challenges faced by Wal-Mart India as it aimed to expand its presence in the Indian ‘cash and carry’ market.

Issues:

Understand the concept of marketing strategies and plans.
Understand the issues involved in market expansion.
Understand the challenges involved in a company operating in an emerging market in the cash and carry format.

Introduction

Wal-Mart Stores Inc. (Wal-Mart), the world’s largest retail chain, had been eying the Indian retail market for a long time, considering the company’s success in neighbouring China. It had initially entered India in 2007 through a joint venture with Bharti Enterprises . However, Wal-Mart India had to limit its operations to the ‘cash and carry’ format as the Indian retail policy did not allow FDI in multi-brand retailing until 2012. It was only in December 2012 that the Directorate of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce, Government of India permitted 51% FDI in multi-brand retailing and allowing 100% FDI in the ‘cash and carry’ segment. Despite the FDI clearance from DIPP, Wal-Mart faced problems in India as there were allegations against it of “illegal lobbying” in India and contentious clauses that affected its operations in the multi brand retailing sector. Wal-Mart exited the joint venture with Bharti Enterprises in 2013...

Key words:
Market expansion, Retail, Cash and carry format, Regulations, Emerging markets, India; Marketing strategies, Business strategy, Ansoff’s matrix, Market penetration, Product development, Market development, Diversification"

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