Walmart in India Compounded Annual Growth Rate

Question: Discuss about the Walmart in Indiafor Compounded Annual Growth Rate. Answer: Introduction Walmart is one of the largest corporation in the world. It is a public organization and a chain of retail or grocery stores. The company has closet to 12,000 stores in different parts of the world. The company has its stores in developed regions like USA, Europe, Australia. The next logical step for Walmart is to expand in the developing and emerging markets like India. The retail industry is a booming industry and it is expected that the industry would continue to grow at a CAGR (Compounded Annual Growth Rate) of 6%. The competition is high in the industry; however, the market is not fully saturated. There is a scope for large players like Walmart to expand its business in emerging markets. Walmart is a market leader in retail industry with close to $500 revenue (Baron Capo, 2017). The objective of this paper is to analyse the internal and external environment of Walmart as based on this make some recommendations for Walmart. The SWOT analysis for Walmart can be discussed as: SWOT Analysis The SWOT analysis helps organizations and marketers to assess the internal and external environment. For any organization, Strength and Weaknesses refers to internal environment and Opportunities and Threats refers to external environment. The SWOT analysis for Walmart can be discussed as: STRENGTHS The company has deep pockets to make investments Walmart is the largest retailer in world and it can easily achieve the economies of scale in different markets The company has efficient supply chain that helps the company to save money Walmart has huge bargaining power over suppliers WEAKNESSES It is reported that the working conditions at Walmart is not good. The employees and workers have often complained about the bad working conditions in factories. The company is under scanner of environmentalists Walmart has very limited focus on sustainable development and Corporate Social Responsibility practices THREATS The threat from competition is one of the biggest threat for Walmart There also exists threat from government regulations, legal policies Threat from environmentalists and their agenda (Zhu Kraemer, 2005) OPPORTUNITIES The biggest opportunity for Walmart is to expand in the emerging and developing markets like India The opportunity to enter the Internet and e-commerce market as e-retailing has its own advantages Customer Market Analysis The retail market is divided into fragmented sector and un-fragmented sector. Walmart operates in un-fragmented sector or organized market. The customer segmentation, targeting and positioning for Walmart can be discussed as: Segmentation: Walmart has done the segmentation on the basis of income. Walmart believes that cost is one of the most important factors when they buy groceries (Foster, 2104). Targeting: Walmart targets the people who values cost. Walmart has established cost leadership position in the market and it targets the people in lower income group and middle income group. Positioning: Walmart positioning resonates well with its business level strategy for cost leadership. The company positioning is to give maximum benefits to customers through discounts and offers (Gopalakrishna Subramanian, 2016). Country of Expansion Walmart already has its stores in developed regions like USA, Europe, Australia. The next logical step for Walmart is to expand in the developing and emerging markets like India. The competition is high in India; however, the market is not fully saturated. There is a scope for large players like Walmart to expand its business in India (Klein Mueller-Lankenau, 2004). The only problem with Indian market is that the retail industry is highly fragmented. There are a large number of small players who have small retail shops. The biggest advantage with Walmart is its strategy of cost leadership. The Indian customers are highly price sensitive and they would want to shop at Walmart. Moreover, the customer switching cost is very less in retail industry. Therefore, customers would not mind to switch to Walmart if it is able to offer better prices than its competitors. Recommendations for Walmart It is important that the entry decision of Walmart in Indian market should be based on the analysis of various internal and external factors. Some of the recommendations for Walmart in terms of marketing mix can be discussed as: Product: The product is the key element of marketing mix. For Walmart, the product would be quality of products at its stores. It is recommended that Walmart should have tie-up with the quality suppliers in Indian market so that it can get quality material. Price: Indian consumers are too much price sensitive. they would want to shop at Walmart. Moreover, the customer switching cost is very less in retail industry. It is recommended that Walmart should continue its cost leadership strategy in Indian market and it must keep the prices low as compared to the prices of competitors (Baron Capo, 2017). Place: In the first phase of expansion, Walmart should target the urban market in India. It is recommended that Walmart should open its stores in tier-1 city like Delhi or Mumbai. Once Walmart has achieved some business in urban market, it can further expand its stores. Promotion: In this era of Internet, social media is the powerful way to reach out to consumers. It is recommended that Walmart should use social networking methods like Facebook and Twitter to reach out to consumers. With social media methods like Facebook, Walmart can create awareness in the masses about its unique selling proposition like cost leadership. Conclusion The above paper discusses the internal and external marketing environment of Walmart. Based on above discussion, it can be said that Walmart is doing really well in the developed market and it has the option and scope to enter in developing market. The company should consider India as its next destination. The change management could be an issue while entering the Indian market due to various cultural issues. However, the collaboration with local players in the Indian market would enable Walmart to overcome the change management issues. References Baron, M.L. and Capo, C., 2017. The Impact of Proximity on Resistance to Foreign Ventures: The Cases of India and Japan.The Copenhagen Journal of Asian Studies,34(2), pp.77-107. Foster, A., 2014.Multinational firms in India: Conducting ethical business(Doctoral dissertation, University of Arkansas). Gopalakrishna, P., Subramanian, R. and Fleischmann, D., 2016. WALMART IN INDIA.Journal of the International Academy for Case Studies,22(3), p.99. Klein, S., Mueller-Lankenau, C. and Wehmeyer, K., 2004. Developing a framework for multi channel strategies. An analysis of cases from the grocery retail industry.BLED 2004 Proceedings, p.9. Zhu, K. and Kraemer, K.L., 2005. Post-adoption variations in usage and value of e-business by organizations: cross-country evidence from the retail industry.Information systems research,16(1), pp.61-84.