Wal Mart Stores In India Management Essay

Entering international markets is an of import facet of transnational and planetary houses. Adopting the right market entry scheme becomes highly indispensable for them to be able to accomplish success and stableness in international markets. Furthermore, the state that they enter besides forms an highly of import facet of their scheme Global houses are really prudent while they choose the state that they wish to come in and this provides them with a batch of strategic and competitory advantage. So, a house needs to be highly careful every bit good as analytical about come ining international markets ( Global Retail Business, 2007 ) .

Wal-Mart is one such house that has a scheme of come ining foreign markets through opening their subordinates in international markets. It has captured several international markets and is yet to capture the Indian market which has high potency ; and so forms one of the most attractive avenues for international enlargements of Wal-Mart ( Global Retail Business, 2007 ) . This paper analyzes the several facets of Wal-Mart come ining the Indian market and the possible environmental every bit good as state specific hazards and challenges that it might hold to confront in the close hereafter if it tries come ining India. This paper besides provides an understanding about the assorted schemes used by Wal-Mart and their impact on the hereafter of Wal-Mart every bit good as its strategic and competitory place in the market ( Wal-Mart, 2009 ) .

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Part A

Introduction

“ Wal-Mart ” is a popular name in the planetary retail industry. It is good known for its airy scheme of supplying the clients maximum value for their money. Wal-Mart signifiers a planetary illustration for universe category logistics and supply concatenation and has besides been known to hold maintained its market leading in several of the states. It soon operates successfully in 15 different states with about 8500 shops ( Wal-Mart, 2009 ) .

Wal-Mart was begun as a retail shop by Sam Walton in the twelvemonth 1962. It is a U.S. based house that got listed on the New York Stock Exchange in the twelvemonth 1972. It is one of the financially strongest companies in the universe as it gets listed in the Fortune 500 companies. From so on Wal-Mart has painted the image of an pictured concatenation of retail shops that redefine the retail industry all over the universe ( Wal-Mart, 2009 ) .

Wal-Mart has shown huge attempts in instance of invariably bettering its supply concatenation and edifice up its logistical competence as it forms a important and major component of its scheme. The chief ground for the popularity and success of Wal-Mart is the fact that it adopts a planetary scheme of supplying maximal value to clients for the money that they spend, and as money is of cosmopolitan value this scheme has ever proven to be successful in all of the states where it operates. In this manner, Wal-Mart has chiefly been able to win because of its strong schemes and its successful executions of operations ( Wal-Mart, 2009 ) . It has been an early participant in most of the international states that it has entered, including USA, UK, Brazil and Argentina, where it has greatly succeeded and it operated under several different names in all of these states ( Farfan, 2010 ) .

Strategic analysis

Wal-Mart bases its operation on the scheme of it being a monetary value leader. It is able to supply monetary value leading as it has a really strong supply and logistics direction in every individual state that it operates. It has been able to accomplish this strong place chiefly because of holding built strategic competences in this sphere it has a really strong supply concatenation which is based on the format of networking with the providers and partnering with them. Including providers as strategic spouses and supplying those better net incomes and income for faster and antiphonal services has helped Wal-Mart be able to explicate a strong system of supply which is highly efficient and effectual ( Farfan, 2010 ) .

Wal-Mart has several schemes of incorporating its supply concatenation and this leads to be efficiency as it does non hold to stock larger stock lists. In this manner, Wal-Mart has formed a strategic competitory advantage for itself and is able to run in the planetary environment as a planetary participant. Wal-Mart has therefore been able to vie with shops like K-Mart, Tesco, Wal-Mart and 7 Costa in several other states which form some of its major planetary rivals, particularly in the UK market. One of the most impactful schemes of Wal-Mart has been to pull clients by offering them value for money and this scheme has been kept changeless throughout the concern theoretical account of Wal-Mart. These schemes combined with convenience and quality of service including on-line purchasing installations has taken Wal-Mart to a different degree of the concern of pull offing a planetary concatenation of retail shops ( Farfan, 2010 ) .

Strategic challenges

There are several strategic challenges besides that are faced by Wal-Mart. In instance of holding to run in international markets, there is a batch of strategic hazard that has to be borne by Wal-Mart. They are vulnerable to political hazards, legal demands, technological alterations, economic volatility, alterations in value of foreign currency and most significantly international degrees of turning competition. These are some of the most of import elements of strategic hazard and challenges that have to be handled and considered by Wal-Mart while working in the international markets and concern environments ( Soderquist, 2005 ) .

The chief hazard in the present scenario is the uncertainness in the economic conditions. Situations like recession and planetary fiscal crisis greatly impact the place of a house like Wal-Mart that is runing on international finance and has to cover with foreign exchange on regular or operational footing. The alteration in political and legal conditions or regulations and ordinances can take to severe jobs for Wal-Mart as there would be intense alterations in the constabularies for offshore, taking away the net incomes in foreign currency back to the place state and besides in instance of autumn in value of dollars it can do Wal-Mart losingss of immense magnitudes ( Global Retail Business, 2007 ) .

Technology is another highly indispensable facet for Wal-Mart in instance of international concerns. Wal-Mart needs a certain degree of technological base and support in order to be able to pull off its immense supply concatenation and logistics installations. In instance of these installations non being available in some of the states, Wal-Mart faces several issues and jobs sing pull offing their supply concatenation and logistics system. This leads to them necessitating a strong technological development in a state where they wish to get down their concern.

Strategic actions

Wal-Mart can take several strategic actions that can assist it to be able to get the better of some of the issues that it has faced in the yesteryear. Its human resource scheme, though a strong 1 has been condemned several times. It is indispensable that they focus on organizing a strong and planetary human resource policy every bit good as a wagess and compensation system as it has been condemned for compensations that are lower than the industry criterions. Furthermore it has been formulated on American criterions and non on planetary criterions ( Global Retail Business, 2007 ) . This needs to be corrected and a planetary human resource scheme needs to be formulated by Wal-Mart. It is highly of import that Wal-Mart considers the jobs of hazard direction and economic issues while come ining another state. They need to look into several facets like competition and the figure of rivals in the planetary every bit good as international markets ( Soderquist, 2005 ) .

They need to organize strong market information and market research systems which can assist them organize a really strong base for understanding foreign civilizations and foreign markets. This would assist them be more accurate and certain about their place every bit good as formation of a strong international and state based schemes ( Soderquist, 2005 ) . For case Wal-Mart needed to alter several to suit into the policies of take stocking that it adopted in the USA to be able to be compatible in the planetary markets. It becomes highly indispensable for these facets to be considered by Wal-Mart while come ining foreign markets as that can assist it to organize a really strong and significant place that can prolong the environmental forces and alterations every bit good as adapt consequently and suit into the international environment. This can assist it to beef up its place in the planetary markets ( Global Retail Business, 2007 ) .

Part B

Entering India

One of the most of import and important component of an international concern is its determination to come in foreign markets and there are several ratings, analysis and considerations that a house needs to do before come ining foreign markets. This includes an analysis of the state specific hazards and factors. They have to see the economic and competitory forces along with technological, political, demographical, legal and several such factors of a state ( Soderquist, 2005 ) .

Wal-Mart has for long been saying its desire to come in India and set up its concern as India is considered as a land of chances. There is a immense potency for growing and development in India. India is one of the most thickly settled or extremely populated states in the universe. It has been ranked 2nd, merely after China and has been stated that it will hold a population higher than that of China in few old ages. This provides Wal-Mart a great chance to capture one of the largest markets where the demand can be forecasted to be highly high. There are several favourable market conditions and state of affairss that encourage Wal-Mart to come in India ( Soderquist, 2005 ) .

The demographic conditions, the economic conditions and several of the political and legal conditions are highly favourable. Most significantly, in the recent yesteryear, India has been able to develop into a land of technological developments which increases its attraction as a concern finish. This makes it easier or an organisation like Wal-Mart to be able to come in India and set up its planetary concern theoretical account of supplying high value to its clients and accomplish this non by decreasing their borders but by utilizing a extremely effectual supply concatenation that can assist cut down the cost of operations.

State analysis

India is a land of several civilizations and is one of the most favorite finishs for the intent of international concerns. This is chiefly because of the growing and population along with favorite economic conditions. This helps Wal-Mart be able to increase its opportunities of success in India. In instance of the Indian retail market, this industry has several little participants and there are barely any strong planetary participants which have been able to capture the Indian retail market. It would take them a scheme of incorporating the complete retail industry and all of the little participants in order to do this disconnected retail industry suitable for the execution of the concern theoretical account of Wal-Mart in a successful mode ( Farfan, 2010 ) . It is possible to make so merely by guaranting that the little retail merchants are integrated and they are utilized in the supply concatenation of Wal-Mart. Negociating with these retail merchants and assisting them earn better net incomes is a manner to be able to organize the supply concatenation that can be automatic and based on technological promotions. If this dialogue is non executable so they will hold to seek and organize the supply concatenation from the abrasion and this would necessitate them to guarantee that they are able to make this in an effectual mode ( Farfan, 2010 ) .

India is a state where in the clients would be easy attracted by value for money, like in all other states and so this theoretical account of Wal-Mart is highly executable for India. At the same clip India is a big state and around 45-50 shops of Wal-Mart can be started here. In this manner it provides a well big and significant market where in Wal-Mart can profit out of the international enlargement ( Farfan, 2010 ) .

India is based on the vicinity food market shop theoretical account. The vicinity food market shop tantrums in the consumer market and provides retail services to its clients. The vicinity food market shop competes in the local market and other branded shops vie on a national or planetary degree. Yet the constructs of market every bit good as their nature and besides the nature of their competition are really similar ( Farfan, 2010 ) .

Management of state specific hazard

County specific hazard and its analysis are highly of import or indispensable for the intent of analysis of possibilities of success in a state, particularly in instance of international enlargements. I is possible to analyse this by guaranting that the chosen state is compatible with the scheme of the company and suits the present planetary concern theoretical account of the organisation. In this manner it is possible to measure the hazard and besides measure the feasibleness of doing a capital investing in such ventures. India forms a favourable option as it provides stable political conditions and favourable economic and technological conditions. These conditions are of great benefit and can assist Wal-Mart to increase its presence in the planetary retail market. It is of great benefit to the concern of Wal-Mart as it would assist them increase gross revenues and returns to stockholders along with beef uping their trade name value ( Soderquist, 2005 ) .

Benefits and Implementation

There are several benefits provided by this scheme of international enlargement and come ining India. The first and foremost is an increased gross revenues and gross every bit good as better returns to stockholders. Furthermore diversifying its portfolio Y spread outing its concern and come ining India would automatically assist Wal-Mart to organize a better hazard direction scheme. It can provide to several demands of the untapped sections and therefore can spread out its concern.

Wal-Mart chiefly faces political, societal, ethical and legal facets which are non restricted to that of USA. Wal-Mart needs to concentrate on these facets at a planetary degree. Competition, political and legal issues, and economic uncertainness are certain failings of the industry every bit good as the operating environment. As India helps equilibrate these factors which are highly critical for Wal-Mart can assist them profit n the long tally or in footings of strategic benefit ( Soderquist, 2005 ) .

The supply concatenation of Wal-Mart is one of the best and most effectual supply concatenation systems and logistics in the planetary retail industry. It is indispensable that the system in India is supported by engineering that helps it be flexible every bit good as cost effectual. It can be used to automatize every bit good as incorporate the several operations of the supply concatenation along with the operations of the chief unit and explicate an integrating of telling or procurement systems and enable accomplishing higher economic systems of graduated table. Higher economic systems of graduated table will assist the house absorb more figure of minutess and besides expand significantly. The procedures of supply concatenation can be easy integrated into one individual system that is proactive and can besides assist in organizing stronger strategic partnerships with the providers of Wal-Mart. In this manner, it is possible to make a better supply concatenation. It is besides of import to guarantee that the bringing system and order processing system is strengthened ( Soderquist, 2005 ) .

This requires the use of a semi-automated engineering and a antiphonal system that can assist it to implement self-processing of orders and informing the transporters or logistics section about the orders to be delivered. An interface of treating through the warehouse can be removed and a direct interface between the providers and the orders to be delivered by the logistics company can be creates. This requires partnering with the providers every bit good as the transporters and besides create an mechanization of orders that are placed on-line, be straight sent to the providers every bit good as the logistics and transporters. This can assist them organize a direct concatenation with lesser figure of mediators or parties or points through which the merchandises need to go. This can assist them significantly cut down the operating expense disbursals and besides the figure of mistakes. In this manner, semi-automation can be of great usage to better the supply concatenation at Wal-Mart ( Soderquist, 2005 ) .

Decision

There are a few strategic issues faced by Wal-Mart in make up one’s minding what should be its scheme in the hereafter and how it should be implemented. This includes explicating a planetary criterion in order to maximise client satisfaction and besides making local programs to manage competition. The retail industry is crowded with local, national and international participants. These strategic issues can be resolved by utilizing the above mentioned schemes and methods and utilizing farther international enlargements in the Asiatic market.

Wal-Mart has framed its concern theoretical account around the nucleus called client. It has genuinely succeeded at giving the client the maximal possible value for money. Quality at sensible monetary values has ensured client trueness every bit good as volume of gross revenues. Furthermore it has invariably provided purchasers ‘ inducements in the signifier of price reductions and offers. This ensures more figure of clients to Wal-Mart than any other retail shop in the universe ( Soderquist, 2005 ) .

Wal-Mart should follow schemes of cut downing competition and managing it efficaciously through merchandise distinction, manage hazard efficaciously, and immune itself against economic bad lucks, expand internationally into developing markets, cut down or apologize its costs and upgrade its engineering applications. These steps would assist Wal-Mart sustain as a market leader in the long-run or good into the hereafter. These can assist it survive and sustain in the long tally.

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