Walmart Essay

2525 words - 11 pages

Wal-MartWal-Mart, a US public corporation that ran large discount department stores, was by revenue the biggest public corporation in the world.The company was established in 1962 by Sam Walton. On 31 October 1969, it was incorporated and, by 1972, it had obtained listing on the New York Stock Exchange .In the financial year ending in 2007, the global Fortune 500 list ranked Wal-Mart at the top of the list, with revenues of US$351 billion.Wal-Mart constantly emphasized its corporate philosophy of strengthening its relationships with employees, suppliers and customers. Building its own transportation systems had allowed Wal-Mart to enjoy transportation cost savings and had helped Wal-Mart to ...view middle of the document...

It was extremely successful in North and South America (eg, in Canada, Mexico, Puerto Rico, Argentina and Brazil), but it had to sell its stores in Germany and South Korea in 2006 due to sustained losses. Since 1991, Wal-Mart International had been rapidly growing and so had its acceptance among consumers. Wal-Mart's promise of "every day low prices" transcended language and was well understood by consumers at nearly 3,000 stores in 13 countries. Wal-Mart International employed over 550,000 people across the globe.An important reason behind Wal-Mart International's success had been its ability to apply its unique culture and successful retailing concept despite daunting business and cultural challenges. As it expanded, the division made concerted efforts to become involved in local communities and adapt to local cultures. However, despite its standing and huge sales turnover of US$285 billion, Wal-Mart continued to be predominantly a North America-based chain.The Wal-Mart-Bharti Joint VentureBharti, with its deep knowledge of India's fast-growing consumer market and Wal-Mart, with its extensive global retail experience, share the same commitment to building relationships with producers in order to provide great quality at reasonable prices to consumers every day.In November 2006, Wal-Mart announced it was entering the Indian retail sector by partnering with Bharti. Wal-Mart had chosen Bharti for various reasons. It was a market leader in India's telecom market and it was one of India's 10 biggest companies, employing over 30,000 people. Its market capitalisation was worth more than US$25 billion . Finally, it had a long history of partnering with foreign companies. As Bharti was seen as an ideal partner for Wal-Mart, the move had long been expectedSunil B. Mittal was Bharti's chairman and was known as the czar of Indian telecoms. According to the Financial Times, Mittal's story was one of "entrepreneurial drive overcoming the politically powerful industrial houses such as Tata and Reliance28 that dominated Indian business".Bharti Cellular made headlines in September 1995 when it became the first company to launch cellular service in India. The success of Bharti in Delhi got the company noticed, but it was Mittal's ability to attract foreign financing that really got people talking.In spite of initially being a small company, Mittal's professional outlook always made Bharti's presence felt. Because of the expansion and growth in the Indian economy, Wal-Mart's choice of Bharti as a partner seemed ideal for both companies.Setting Up the Joint VentureMedia reports speculated that Wal-Mart had proposed an initial investment of US$100 million, which would rise to US$450 million within a short period of time. Because the regulatory environment in India did not allow non-domestic retailers with several brands to sell directly to customers, the companies decided to operate as wholesalers and offer back-end support to new or existing local retailing...

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