Wal-Mart and Multi-Brand Retailing in India Assignment

Wal-Mart and Multi-Brand Retailing in India - Assignment Example Discovering new markets and designing new products have always been like adventures. It involves risks that can even jeopardize a firm’s existence. On the other hand, it involves potential returns that can take the firm to newer heights. After the Global Financial Crisis of 2008, the consumer demand in the developed world has remained tepid for a long time. At this situation the global growth is being mainly driven by the emerging markets. Among the emerging markets, while China has a good investment story, India has a good consumption story. Here in this paper, we will look at the possible strategies and their implications for starting a multi brand retail chain in India from the perspective of retail giant, Wal-Mart’s. It is necessary to mention here that the Indian Parliament has not given green signal to foreign investment in multi-brand retail. Wal-Mart has existence in India via the joint venture Bharti Wal-Mart Private Limited. Bharti Enterprises is one of Indiaà ¢â‚¬â„¢s foremost production houses. In the context of this contract, Bharti and Wal-Mart possess ‘50:50 stakes’ in Bharti Wal-Mart Private Limited. It is setting up wholesale cash-and-carry provisions and back-end supply chain administration systems to be at par with Government of India rules. The ‘first Wholesale Cash-and-carry facility named "Best Price Modern Wholesale" opened in Amritsar in May 2009 and subsequently in Zirakpur, Jalandhar, Kota, Bhopal, Ludhiana, Raipur, Indore, Vijaywada, Meerut, Agra, Lucknow, Jammu, Guntur, Aurangabad, Bathinda and Amravati’ ... Also, the process of reaching agreements with emerging market customers was ‘cumbersome and lengthy’. At the same time, there was not much information about the market potential and associated strategies for the emerging markets (Cavusgil et al. 2002, pp.17-18). Diffusion of skills, processes, and technologies throughout the global markets resulted in a convergence. The difference between budding markets and the industrial economies is narrowing. The forecast potential of these markets is increasing (Khanna & Palepu, 2010, p.13). Now the market potential is no longer too small for marketing efforts. Many emerging economies are investing in transportation, power, and communication infrastructure. Also the modern management techniques and close working relationship with foreign counterparties have helped to bring down the cost of sales. Though there are inter-cultural differences, managers have realized the value of a global ‘win-win’ relationship (Cavusgil et al. 2002, pp.18-19). The opportunities connected with low-income markets are becoming gradually more obvious to both scholars and managers. There is evidently more than meets the eye when considering customers with annual purchasing power parity (PPP) of $1500 or less (Prahalad & Hart, 2002, p.2). A vast majority of people work chiefly in the big, unseen, informal economies. These are not reflected in official gross national product or purchasing power parity statistics. Across the globe, it has been expected that the unofficial sector comprises more than $9 trillion in unregistered assets. The value of economic transactions in these sectors may even surpass that has been recorded for the formal economic sectors (London & Hart, 2004, p.2). The superiority and extent of the obtainable product and