Strategic decisions

There are close to 7 million grocers in the country. Out of these, not more than 80,000 are
serviced directly by companies like Hindustan Unilever, Procter & Gamble and Colgate-
Palmolive. The others depend on wholesalers. Their large numbers mean they account for large
volumes. Even in highly-evolved categories like toothpaste or tea, over 40 per cent of the
volumes pass through the wholesalers to the small grocers. This is the market Bharti Walmart
has set out to tap.

1. Facilities: Walmart India owns and operates 26 Best Price Modern Wholesale stores
offering nearly 5,000 items in a Cash & Carry wholesale format. Walmart India also has
3 Fulfillment Centres in India - Mumbai, Lucknow and Hyderabad. Bharti Walmart has
put its 1,000-odd suppliers in four buckets. On the top are about 50 large suppliers like
Hindustan Unilever and Procter & Gamble. All suppliers, big and small, are given a time
for delivery. They need to supply within two hours of that. Once the window shuts, they
are asked to wait till the next slot on the unloading bays is available — that could happen
a full day later. The demurrage charges are borne by the supplier. Bharti Walmart
maintains a score card for each supplier. Any consignment that arrives bang on time gets
full marks (100 out of 100) and the one that rolls in once the window is shut gets zero.
2. Inventory: Walmart is able to keep the inventory growth slower than the sales growth
which helps in keeping the inventory handling cost at the optimum level. The other factor
 that draws grocers and Horecas to the Best Price store is the range of products available.
All told, the company keeps around 6,000 SKUs (stock-keeping units). Several of these
cannot be found elsewhere in the market.
3. Information: The distribution centers are connected with the store ad receive real-time
stock information, the merchandise can be easily pushed to stores automatically, this real
time information helps the manufacturers to be notified as soon as the item is purchased.
4. Sourcing: The supply chain created by Bharti Walmart ensures that product availability
is not erratic. This is a problem grocers often face with wholesalers. In case of a
disruption, the wholesaler has no means to repair it.
5. Pricing: Bharti Walmartworks on the strategy of squeezing cost out of the system not
the customer; it has the same price for all i.e. there is no volume discount like in the case
of wholesellers who are the main competitors of Bharti walmart in the market. This
works in favor of the small grocer and they are attracted towards the Best Price stores.
Since they are able to cut down cost from the value chain they are able to provide the
EDLP.