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COMPETITOR ASSESSMENT

CASE ANALYSIS OF WAL-MART AND BHARTI

Submitted To : Dinesh Kumar

Submitted By : Kalpit Jain PG20125301

socio-cultural diversity. lack of use of technology. Its reliability and efficiency is unmatched in the word of retail. there are significant challenges as well. Indian retail is the most promising sector in the world and it has caught the attention of players across globe. social resistance. In order to capture Indian market Wall-Mart entered in 50:50 venture with Bharti for cash-and-carry retail business. Wal-Mart to maintain supply chain as a competitive advantage Wall-Mart and Bharti may face some issue in implementing a robust supply chain management due to lack of infrastructure. While India presents a large market opportunity given the number and increasing purchasing power of consumers. However given the extensive use of technology and robust knowledge of supply chain management which Wall-Mart has there is no reason why Wall-Mart and Bharti will not be able to maintain supply chain as competitive advantage. Wal-Mart’s efficiency in supply chain management The Supply chain management forms the heart of Wal-Mart’s business. Wal-Mart’s use of innovative IT tools and IT Wal-Mart leverages technology to help support their supply chain and business strategy of EDLP. which in turn benefits and satisfies Wal-Mart’s customers. . It ranges from huge cultural diversity. Indian retail market is highly complex in terms of a geographic spread and consumer preferences. Wal-Mart has been very successful in finding means to capitalize on every cost saving opportunities and the adoption of efficient logistics system enable Wal-Mart to earn unrivaled intangible competitive advantage and edge to the rest of the business world which is made possible also in the use innovative technology. to supply chain management. and socio-political resistant and various other challenge. political resistance. Wal-Mart and Bharti need to tackle huge challenges to be successful. All aspect of supply chain from the purchasing to transporting and then finally to selling are wellcoordinated and systematic which ensures the success of the entire supply chain.Indian Retail Market India has become center of economic activities in today’s global world. Wal-Mart always seeks to improve and explore possible ways to give customers superb quality service without an additional expense. lack of infrastructure. Wall mart’s operational excellence has helps Wall-mart to reduce its cost and bargain better with supplier to offer EDLP to it s customers.

India. Bharti Enterprises was founded by Sunil Bharti Mittal in the year 1976.BHARTI ENTERPRISES PRIVATE LTD Bharti Enterprises is an Indian business conglomerate headquartered in New Delhi. On 27th Nov’ 2006 Wal-Mart announced that he is entering into the Indian market with Bharti enterprises as a joint venture. Sunil Bharti Mittal and it operates in 20 countries across Asia and Africa. The selection of Bharti Enterprises for joint venture by Wal-Mart was due to various reasons:    Bharti was one of the leading business group in India well-known name in telecom industry. The two companies. employing over 3000 people. BHARTI ARITEL BHARTI RETAIL BHARTI AXA GENERAL INSURANCE BHARTI TELETECH And many more. As we know this is one of the largest enterprises in India. financial services and manufacturing. Bharti is at present in various sectors with the largest revenue contribution coming from telecom industry. It was founded in 1976 by Mr. The two companies still hope that Indian government lift restriction from FDI so that Bharti-Wal-Mart can open more and more stores in India. made a surprise statement that they have signed a wholesale cash-and-carry deal. a franchised retail company and a whole sale cash and carry joint venture. Its market capitalization was worth more than US$25 billion. retail. Bharti enterprises have entered into a deal with Wal-Mart agreed to form of 50:50 joint venture to roll out retail outlets in India. The joint venture will change the country’s inefficient and scattered retail industry dramatically. And many more reasons were there why Wal-Mart chose Bharti. following government's decision to allow up to 51 % FDI in multi-brand retail. Bharti and Wal-Mart planned to use two different formats for their stores. The first Best Price Modern Wholesale opened in Amritsar in May 2009. Bharti Enterprises owns various businesses spanning across telecommunications. The two companies have an equal partnership in wholesale business where Indian partner is hopeful of replicating itself in the retail business. in August 2007. It started with manufacturing bycycles before diversifying into varios sectors. . It was one of the 10 largest companies of India. Bharti Enterprises tied-up with Wal-Mart for opening a chain of retail stores all over India.

 Threats Rising strength of big local competitors. Booming economy of India. The Government has severe restrictions on retail which can impact this Joint Venture Inadequate distribution channel. Opportunities    Wal-Mart has the best practices of a globally successful retailer. Organized retail is growing rapidly in India. Wal-Mart already is best known for global best practices in retailing. Huge market which is still untouched by competitors. Due to its Pan India presence Bharti can replicate the efficiencies of scale which Wal-Mart is known for. Bharti has strong experience with retailing to a large number of customers both in rural and urban areas.       Weaknesses The Indian retail industry is still mostly unorganized and is widely fragmented.SWOT ANALYSIS Strengths     Bharti is a well-known name to the Indian consumer. Increasing real estate cost in India Insufficient infrastructure for retail industry PORTER’S FIVE FORCE MODEL .

The market is growing and hence can accommodate more players very easily. Unorganized small scale vendors. Bargaining Power of Customers:    Customers are already buying through the unorganized small retail shops to satisfy the needs. Customers have choice to both go for the small shops or to the retail outlets and hence have a very good amount of bargaining power. There is a huge market potential for the growing Indian retail Industry market. Bargaining Power of Suppliers:  Competitive products vying for shelf space reduces the supplier power as the retail outlets with their huge networks have choices with them with the private players also coming into picture. This threat in turn increases the bargaining power of the customers. . Local competition and brand building of local companies like Spencers would also be a threat for the new entrants. Threat of Substitutes:    Traditional Indian retail outlets are the main substitutes. Local biggies like Reliance and RPG groups have setup huge network of retail outlets and have started to expand and grow along with the Indian retail market. Organized retail showrooms need to attract customers by either providing a cost advantage or differentiating with their collection of products under one roof. Threat of New Entrants:    New market entrants from foreign locations need a local partner to enter into the market according to the government regulation. Currently there are multiple foreign retailers vying for local partners to enter into the India retail market but none of them have yet gone fully operational. hawkers are all substitutes for the organized retail.Competitive Rivalry within industry:     The retail Industry in India is still more than 90% unorganized.

Wal-Mart believes in standardization approach in their global operation. and come with a certain amount of humility or humbleness and not an attitude of "we will show you how this is done. Those are: .Wall-mart’s strategy of having outlets in outskirts of cities will not work and the cost of land and rentals in prime place in Indian cities have sky rocketed. apart from low prices Wal-Mart has to concentrate on few other key issues which can lead them to achieve its desire goal in India. It is most important to be successful for all companies to completely understand the needs and demand of each and every customer. Wall-Mart’s relationship is mainly transactional. and the taste and preference of customers varies from one country to another one religion to another and one culture to another. The diversity of products bought by Indian consumers varies significantly in length and breadth of India and optimizing operation while ensuring that consumer get what they want in Wall stores would be a daunting task. The booming infrastructure sector in India has already sent the prices for land and rental to sky-high coupled. Wall-Mart needs to understand the local environment. Wal-Mart has to make suitable change in their business strategies to meet the demand of the consumer of India. Infrastructure in India is still developing and managing supply chain in India would be for more challenging due to lack of proper infrastructure. while unorganized retailer in India build a long lasting relationship with their customer. In addition to be successful in India. Wal-Mart will have to make sure it has its logistics functions up-to-date with the diverse demands the market will pose Wal-Mart has so far had most of its experience in countries with minimal diversity and handling operation in one of the most diverse country would be very difficult for Bharti Wall-Mart venture. Suppliers with huge warehouses and storage spaces can be more advantageous for efficient supply chain management for the retailers Challenges faced by Bharti and Wal-Mart in their partnership        Cultural differences in Indian retail way and the wal-mart way. Unlike US or Europe Indian prefer to buy from nearest retailers . socio political activities like strikes and resistance against organized retails etc  CONCLUSION AND RECOMMENDATIONS Consumers are the key for the success of any business. To be successful in India where cultural difference is a major factor. both corporate and consumer. A joint venture with an Indian company like Bharti is a positive strategy towards the direction of success.

effective and efficient working partnership with Bharti Enterprise. .     Maintain a mutually understanding. Give more importance in market research to understand the domestic market and Indian consumer type to fulfill their needs and demand accordingly. Set up stores all across India in such a location which is convenience to the local consumers. Build a effective and reliable supply and distribution system Always follow the rules and regulation of local governing body.