Supply Chain / Logistics
India’s transportation system is not as advanced as other countries systems’. In India many roads are
not paved yet which will slow down the famous Wal-Mart supply chain. Wal-Mart’s core competency is
price. One cannot find lower prices than they find in Wal-Mart on such a large assortment of products.
One of the reasons that price can be Wal-Marts’ core competency relies on the efficiency of Wal-Marts’
world renowned Supply Chain. Wal-Mart will have to partner in some way with the Indian government.
A modern road infrastructure is something India needs sorely. Wal-Mart and the country as well as all
other businesses and ...view middle of the document...
The Indian government already allows brands in their country
to do business but only brands that sell just one brand in the whole store. A good example of this would
be Toyota, Nike etc. As of now Wal-Mart operates 17 wholesale stores in India but they are only
allowed to sell to other businesses. Organized retail only accounts for about six percent of the retail
market in India which means there is opportunity for an enormous amount of growth and Wal-Mart
knows this and wants to capture this opportunity. Many Indian companies are currently diversifying by
buying retail stores because they know the future of the Indian retail market is growing and there is a lot
of room for profits to be made. Unorganized retail stores are what makes up the majority of the Indian
retail market currently which is why the policies on foreign retail companies are so strict.
Wal-Mart’s Perspective: Wal-Mart wants to enter the Indian market because there is so much potential
for growth and revenue. India’s retail landscape is made up 95% mom and pop stores, bodegas which is
referred to in the case as unorganized retail. The organized retail landscape in India makes up only
about 6% currently. Many companies are starting to diversify their portfolios by buying up retail stores
or shares of retail stores in India. The organized Indian retail market is forecasted to grow at a rapid rate
in the near future. Indian consumers are beginning to expect more quality and more of a variety
because more and more global brands are available. Wal-Mart knows the implications for profits in
Indian retail are exponential and of course they want to capitalize on this revolution that is about to
happen. For now the Indian government is still protecting the unorganized retail sector by only allowing
Wal-Mart to sell as a wholesaler which means they cannot sell...