Bharti Ma

1. BHARTI WALMART INDIA STRATEGY
Strategic Management
Prepared By
Vikas Gupta
General Management Program
2011-2012

2. Retail Market in India
Total Retail Market Size
 Indian Retail market highly fragmented 637 Billion
 Estimated at $ 320 Billion (2006), $ 427 Billion
(2010) and $ 637 Billion (2015)
427 Billion
 Mainly dominated by unorganized retail in the
320 Billion
form of kirana stores, mom-and-pop stores, small
stores etc.
 Only 2% currently Organized v/s 98 %
unorganized 2006 2010 2015
Estimated Market size for Organized retail is $7.17
Billion (2006) and $20 Billion (2010)
Market Size Organized Retail
Organized
2% 637 Billion
427 Billion
320 Billion
Unorganized
98% 7.17 Billion 20 Billion
2006 2010 2015

3. Indian Consumer Behavior
• US consumer – “Buy and Pay” whereas Indian consumer
“Save and Buy”
• Change from “Save and Buy” mentality to “Buy and Pay”
mentality mainly observed since year 2000
• Global brand flooding India and consumer demands better
quality, variety and lifestyle products
• Consumer disposable income and purchasing power
increasing
• Demand for Organized retail emerged

4. Indian Demographics
Since the economic liberalization, India has seen –
• Increase in working youth
• Increase in working women
• Increase in nuclear families
• Increase in opportunities in service sector
• Enhancement of living conditions
• All these leads to increase in consumer spending and
purchasing power

5. Indian Govt Retail Policy and Regulations
• As of 2006, 51% FDI in multibrand retailers
• 100% FDI in wholesale cash-and-carry and
backend logistics
• Variation on policy at State Levels
• Stringent labor laws

6. Social and Political environment
• Dealing with India’s unique cultural sensitivity
factors
• Regional differences
• 6000 caste, sub caste – vast diversity
• Strong opposition from mom-and-pop stores, trade
unions, women’s group and local communities
• According to left wing and NGO’s, Walmart will
destroy livelihood of 40 Million people in India

7. Porter Five Force Analysis
POLITICAL
T
E
C • High Entry Barriers
Threat of new entrants
H • High Capital MEDIUM
• Regulations S
N O
O Intra Industry
Suppliers Bargaining Buyers Bargaining C
N Competition
Power LOW Power HIGH I
O HIGH
A
L • With stiff
• Walmart has L
competition from
O strong bargaining
Reliance, RPG, Tata,
power over
G suppliers Threat of Substitutes Aditya Birla
group, buyers get
I MEDIUM higher bargaining
C power
A
L ENVIRONMENTAL

8. Walmart
• Largest department store
• Biggest public corp in the world
• Corp Philosophy – Strengthening its relationship with
employees, suppliers and customers (core competency)
• Own transportation network
• Low pricing strategy – cost leadership (core competency)
• Robust and efficient Supply Chain network (core competency)
• Cold chain logistics i.e. refrigerated trucks and distribution
centers to reduce wastage
• Leveraged IT to enhance their Supply chain.
• Use of Technology for improved planning, accurate
merchandizing, enhanced customer experience, improved
workforce management, strengthened store operations
(core competency)

9. Why Walmart did well in other
International locations ?
• Ability to apply its unique culture and successful retailing
concept despite daunting business and cultural challenges
• Involve in local communities and adapt to local cultures –
Glocalization
• Sourcing 90% products locally
• Hiring locally and supporting local communities.

10. Bharti-Walmart
Why Bharti ?
• Good history of partnering with overseas companies
• Bharti attracted $1.2 billion in foreign equity – highest in
India
• No 1 in Telecom business in India
• Bharti has deep knowledge of India’s fast growing consumer
market
Walmart
• Extensive global retail expertise
• Ability to apply its unique culture and successful retailing
concept.

11. Bharti-Walmart
• Bharti to own retail shops under
Walmart franchise
• Bharti-Walmart to jointly operate
(50:50) Wholesale Cash and
Carry and backend logistics
• Wholesale Cash and Carry means
supplier to Retailers and Small
business such as
Hotels, restaurants, vendors, hos
pitals etc
• Walmart to invest $100-450
million

12. Bharti Walmart Challenging
landscape
 Managing cultural diversity
 Managing Union and State level regulations
 Handling oppositions from Trade Unions, local kirana
stores, left wing, NGO etc
 Under-developed infrastructure: quality of Roads, trucking
 Adoption of modern technology in india
 Want to cut middleman by linking suppliers directly with
consumers. Facing strong opposition from trading
community

13. Bharti Walmart stores
• India is already a huge supplier to Walmart. India supplies
goods worth $1.6 Billion to Walmart
• First store opened in Amritsar, Punjab. This part of the
country has sent many migrants to North America, we see
a glimpse of NRI driven globalization
• As of now 7 Bharti Walmart Cash and Carry stores in India
• As of now, 117 Bharti Retail Supermarket stores in the
states of Punjab, Haryana, Rajasthan, UP and Delhi
• 10 Compact Hyper Market stores
• Walmart’s office in Bangalore to serve as Global
Procurement Hub

14. Bharti Walmart’s Store Location
decision criteria
• State Laws and Regulations
• Ruling party in the state
•Availability of goods locally
• Political and Social Acceptance Factors
• Consumer Behavior and Spending power
•Demographics and Psychographics profile of consumer
• Influence of Globalization culture. E.g. Places such as
Punjab, Bangalore, Hyderabad, Mumbai has more
globalization effect than places such as Kolkata
• Quality of Infrastructure (Roadways, Trucking) to support
their supply chain operations

15. THANK YOU