WAL-MART AND BHARTI: TRANSFORMING RETAIL IN INDIA
WAL-MART AND BHARTI: TRANSFORMING RETAIL IN INDIA
This report analyses and evaluates the situation of the retailer Wal-Mart in the Indian industry.
On the point of creating a JV with the company Bharti, Wal-Mart has to resolve numerous challenges, range from the cultural differences to problems with its supply chain to strengthen its competitiveness, gain customer loyalty and becoming the “go-to place”.
The Indian Retail Market
The competiveness of the Indian retail sector will be evaluated, by applying the Porter’s 5 forces model.
Threat of Entry
Due to the competitive pressures of new entrants combined with stringent laws and regulations on FDI, this threat is considered as middle. The fact that the emerging Indian retail sector is ranked among the most promising sectors, the advantage of being the first mover is essential in order to gain competitive advantage.
Threat of Substitutes
Considered as middle, the threat of substitutes do not dominate the competiveness of the retail industry, due to the growing population, who have to buy their groceries at some places anyway, which they need for their daily life. Nevertheless the mentality is changing from
“Save and Buy” to “Buy and Pay”, there are still price sensitive Indians.
Buyer power
Regarding the Indian market, which is mainly dominated by unorganized retail, combined with the pressure on low margins, the bargaining power of buyers is very high. However Wal-Mart is known for its EDLP proposition which is essential to meet the Indian customer needs, who are very loyal to the lowest price.
Supplier power
The weak supply chain management, which is rather considered as the main factor of the low bargaining power of suppliers, is based on a poor infrastructure, which can cause delays in transportation. Rivalry between competitors
This force is considered to have the main influence on the industry and is therefore very high.
The JV is facing competition on the one hand from its main
This report analyses and evaluates the situation of the retailer Wal-Mart in the Indian industry.
On the point of creating a JV with the company Bharti, Wal-Mart has to resolve numerous challenges, range from the cultural differences to problems with its supply chain to strengthen its competitiveness, gain customer loyalty and becoming the “go-to place”.
The Indian Retail Market
The competiveness of the Indian retail sector will be evaluated, by applying the Porter’s 5 forces model.
Threat of Entry
Due to the competitive pressures of new entrants combined with stringent laws and regulations on FDI, this threat is considered as middle. The fact that the emerging Indian retail sector is ranked among the most promising sectors, the advantage of being the first mover is essential in order to gain competitive advantage.
Threat of Substitutes
Considered as middle, the threat of substitutes do not dominate the competiveness of the retail industry, due to the growing population, who have to buy their groceries at some places anyway, which they need for their daily life. Nevertheless the mentality is changing from
“Save and Buy” to “Buy and Pay”, there are still price sensitive Indians.
Buyer power
Regarding the Indian market, which is mainly dominated by unorganized retail, combined with the pressure on low margins, the bargaining power of buyers is very high. However Wal-Mart is known for its EDLP proposition which is essential to meet the Indian customer needs, who are very loyal to the lowest price.
Supplier power
The weak supply chain management, which is rather considered as the main factor of the low bargaining power of suppliers, is based on a poor infrastructure, which can cause delays in transportation. Rivalry between competitors
This force is considered to have the main influence on the industry and is therefore very high.
The JV is facing competition on the one hand from its main