Future Group: The Walmart of India

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR398 For delivery in electronic format: Rs.500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Business Strategy
Case Length : 15 Pages
Period : -
Pub Date : 2011
Teaching Note : Not Available
Organization : Walmart
Industry : -
Countries : -

Abstract:

Walmart of U.S. and Future Group of India, leading retailing brands in the respective countries had many similarities. They followed similar strategies for rapid growth and expansion of markets. However, each of them also had unique features that they adopted to establish their leadership in organized retailing in US and India respectively. Walmart operated through several retail formats such as Supercenters, general merchandise stores, food and drugs, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores, and restaurants, Of late, Walmart majorly operated through three divisions - Walmart Stores US, SAM's Club, and Walmart International.

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The success of these retail formats inspired the retail arm of Future Group, Pantaloon Retail Indian Limited (PRIL) to operate its stores through hypermarkets and supermarkets.

PRIL's hypermarket store Big Bazaar was a combination of a supermarket and a department store. PRIL's hypermarkets were similar to Walmart's Supercenters offering wide range of general merchandise and groceries under one roof. The major Unique Selling Proposition of the Big Bazaar store was low prices and the best price proposition being offered to customers. The stores were designed in such a way that it gave the consumers a feel of an Indian bazaar (market). The stores promoted itself by using slogans such as 'Is Se Sasta Aur Accha Kahin Nahin' ('Cheaper and better than this? Nowhere else!'). The stores also had food courts in order to attract crowds. Another significant retail format of PRIL was Food Bazaar, which focused on food and grocery products. These stores were designed based on PRIL's understanding of the domestic needs of Indian housewives. The caption used in the promotion campaign of Food Bazaar was - 'Ab Ghar Chalaana Kitna Aasaan' ('Now, it's so easy to run a house). Another retail format of PRIL - Central offered all products under one roof from multiple brands for shopping to coffee shops to restaurants to entertainment options and gaming zones. In addition, PRIL forayed into home furnishings, electronics, beauty, health and wellness, etc. Similar to Walmart's SAM'S Club, PRIL operated a warehouse club called KB's fair price.

Walmart and Future Group's retail arm PRIL made use of radio frequency identification (RFID) across all the retail formats. The implementation of RFID offered more visibility in the supply chain and helped the retailers in taking effective decisions related to inventory management. While Walmart operated in 15 international locations outside the US, Future Group did not have its presence outside India. Future Group had to compete with several domestic and foreign retailers in India to retain its market leadership position. Walmart also faced competition from retailers such as Target, Kmart, etc. The retailer's SAM's Club was in direct competition with Costco and BJ's Wholesale Club.

Going forward, Walmart planned to offer its consumers with healthier and more affordable food choices. The retailer aimed to increase its sales through such initiatives. Future Group also had ambitious plans. By the end of 2011, it planned to achieve a turnover of Rs. 300 billion from its retail ventures.

Issues:

Understand the issues and challenges faced by Walmart and Future Group.
Analyze the retail formats and promotional strategies adopted by Walmart and Future Group.
Analyze the potential for growth for Walmart and Future Group.
Examine how Walmart and Future Group would combat competition from other leading retailers.

Contents:

  Page No.
Introduction 1
Background Note - Walmart 2
Background Note - Future Group 2
Store Formats 4
Promotion 5
Technology Deployment and Human Capital 7
International Ventures 8
Competition 8
Looking Ahead 9
Exhibits 10

Keywords:

Organized retailing, Pantaloon Retail India Limited, Future Group, Walmart, Sam Walton, Kishore Biyani, retail formats, Supercenters, discount stores, neighborhood markets, SAM's Club, hypermarket, Big Bazaar, Food Bazaar, Unique Selling Proposition, pricing, promotion, psychological discounting, differentiated pricing, guerilla marketing, RFID, Retailing in India, Retailing in US, Target, Kmart, Dollar Stores, Marks & Spencer, RPG Group, Reliance Retail, PRIL, Always Low Prices, Always, Save Money. Live Better

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