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WALMART ORGANIC GRWTH

DEF:ORGANIC GRWTH: Organic growth is the process of business expansion due to increasing overall customer base, increased output per customer or representative, new sales, or any combination of the above. The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic. Organic growth represents the true growth for the core of the company. It is a good indicator of how well management has used its internal resources to expand profits WALMART Anticipated 2011 sales of around 450 billion dollars. This positions Walmart International firmly as the world's number 3 retailer, galloping ahead of Tesco and Germany's Metro Group and just a fraction smaller than Carrefour. Walmart International accounts for more than 25 % of total Walmart and is growing at 20 % per year through a network that includes more than 4,500 stores covering 55 different banners in 14 countries outside the USA. Walmart's financial reserves allow them to invest heavily in multiformat, new store development. For example, they have basically tripled their store counts in Mexico & Canada since entry.

Walmart operates through several retail formats such as Supercenters(A very large commercial establishment that is a combination of a department store and a supermarket.), general merchandise stores, food and drugs, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores, and restaurants WALMART DUAL GROWTH STRATEGIES IN DIFFERENT COUNTRIES: Wal-Mart's strategy combines organic growth with large-scale acquisitions, its Chinese revenues having doubled in 2007, helped by the USD 1 billion purchase of a controlling stake in the Trust-Mart chain early in the year, but also by the opening of 24 new Wal-Mart stores. Wal-Mart plans to double again its number of outlets over a five year period, a target that seems realistic considering the current rate of new store openings. Walmart Canada continues to increase sales through its supercentre expansion program. Brazil, China and Mexico continue to offer significant opportunities to add new stores and serve more customers. We will grow in our countries by winning locally. It is observed that their returns through organic growth is more predictable than through acquisition OPPORTUNITY FOR WALMART IN INDIA: India being the second largest populous country in the world was emerging as the hottest destination for retail industry. Market Size:Indian retail sector is divided in to two groups one is organised group and other one is unorganised .In that only 3% retail market is organised

and remaining 97%is unorganised so there is huge scope for growth and expansion in Indian retail sector. Scope for a growth in Indian retail market is 97%. India represents a $250 billion retail market, growing 7.2 percent a year, but modern retailing is just starting to emerge. This shows us that India is a huge organic growth opportunity for Wal-Mart. The average urban household income in India is about $3,000 a year, roughly in line with China, and the consuming class has grown from 35 million families in 1996 to an expected 80 million this year. That's roughly in line with the U.S market. This is a very big opportunity for walmart. FUTURE PLANS FOR WALMART: Walmart International continues to invest in organic growth across its markets. Capital expenditures will range from $4.5 to $5.0 billion in fiscal 2014. New stores are expected to add between 20 and 22 million square feet next year, in line with the current fiscal year projection of 21 to 23 million square feet. Next year, walmart is allocating 60 percent of our funding to developing our higher growth markets and 40 percent to developed markets,explained Doug McMillon, Walmart International president and CEO. We will point our investments toward the better performing formats, such as supercenters and discount compact hypermarkets, and we will stop or slow growth in lesser performing formats. In some cases, we have already done this, and it will be reflected in future performance.

WHY ORGANIC GROWTH BETTER:

organic growth is always better, its a slow and steady growth which can be sustained for a long period of time, to say in one word, long run strategy. companies can make fast and steady, as it depends on the criticality of company compared to the Industry growth. The most profitable growth of any company is predominantly organic growth - initiatives that focus on bringing innovation in the form of new products and services, identifying opportunities for existing offerings in new markets, or generating more revenue from existing offerings from current customers Recommendation: The increase number of buying power of Indian middle class opens doors for new players to make the market attractive and profitable. If Wal-Mart use this planned strategy to make entry in Indian market, it will help them to establish and make sustainable business. Indian retail law does not allow multi-brand foreign retailers to sell directly to consumers So Wal-Mart will have to make 51:49 joint ventures with any Indian company to enter in Indian market. Walmart can opt for combined strategy of organic growth and acquisition in India. According to me Wal-Mart must enter in Indian retail industry, there is so much scope for such companies.

Wal-Mart competitive advantages matches to the Indian consumer, which is a positive reason to enter in India. It will become milestone for Wal-Mart in South Asia.