Contents

1. Introduction – Wal-Mart’s first store in India
2. Joint venture with Bharti Enterprises
3. About Wal-Mart
4. Wal-Mart – Background Note
5. Wal-Mart – Timeline
6. Wal-Mart – Quick Facts
7. The world’s largest retailer isn’t new to India
8. India’s first special skills training centre
9. Exhibit – Wal-Mart’s business model in India
10. Mera Kirana programme
11. Exhibit – Foreign hypermarket chains in India
12. Wal-Mart Internationally
13. Exhibit – Wal-Mart and Expansion into International Markets
14. Wal-Mart’s imperfect success record in a foreign country
15. Cost-Leadership Strategy- Wal-Mart’s core philosophy – EDLP (every day low prices)
16. Will Wal-Mart succeed in expanding outside the U.S.?
17. Best Practices and lessons from the International Markets
18. Wal-Mart India – Plans and Challenges
19. Wal-Mart’s Strategy and Supply Chain tuning for India
20. Physical and Regulatory Challenges
21. The Indian Consumer
22. Bringing private label suppliers to India
23. Will the kirana store go out of business?
24. Advantages of a small Indian shopkeeper – The Kirana store
25. Exhibit: Wal-Mart – Store Formats
26. Exhibit: Wal-Mart – International operating formats
27. Questions for Discussion

Sample Page/Content

"India is a price sensitive market and therefore we will be devising our strategy for her very carefully…Retailing is like a game of three dimensional chess where we operate as a local, regional and global player, so depending on the needs of the market we shall change our format and adapt." – John B Menzer, President and CEO, Wal-Mart International.

"India is not a homogeneous market, so ours is not a cookie-cutter approach from the U.S. …Wal-Mart is in no hurry to unfurl the Wal-Mart flag nationally. The easiest thing is to roll out stores, but the most difficult is to sustain and feed them." -Raj Jain, President of Wal-Mart India in May 2009.

"Wal-Mart operates with multiple private brands around the world. In each market that we operate, we look to be local. We treat each market as unique and India, in this respect, is no different." -Arti Singh, vice-president of Corporate Affairs at Bharti Wal-Mart.

1. Introduction – Wal-Mart’s first store in India

In December 2006, Wal-Mart Inc. believed that by the year 2015, 35% of India’s retail sales could be from chain stores . This was a radical increase from the prevailing 2%. In May 2009, Wal-Mart was ready to open its first store in India. The reason for Wal-Mart’s entry in India was clear – The Indian middle class . The world’s biggest retailer had been silently working on its strategy for India for around two years. Mom-and-pop stores and traditional distribution networks dominated the $375 billion Indian retail market. Wal-Mart’s first outlet was set to launch in the city of Amritsar, Punjab in North India. The first store air-conditioned and built over 50,000 sq. ft. was on the outskirts of the city, Amritsar. The store employed 200 locals and was likely create 500 indirect jobs. In the first few weeks itself, the company had managed to sign on close to 35,000 members. However, the debut outlet was not to carry the familiar Wal-Mart brand. Did this mean Indian consumers could not benefit from Wal-Mart’s everyday low prices?

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Case Updates/Snippets

• 50:50 joint venture: In India, Wal-Mart has a 50:50 joint venture with Bharti Enterprises in the wholesale cash-and-carry segment.
• Direct Farm Program: Multinational retail giant, Wal-Mart’s Direct Farm Program in India is a partnership with 110 small and marginal farmers near Ludhiana in Punjab where it encourages cultivation of safe, high-quality, seasonal vegetables. Farmers are advised at every stage of cultivation by field agronomists. Farmers learn about nursery management, transplanting, nutrient management, as well as harvest and post-harvest practices.
• Wal-Mart India in 2010: In 2010, Bharti-Wal-Mart plans to launch seven Best Price Modern Wholesale Cash-And-Carry stores across India. These stores will be 100,000 sq ft in size and each store will involve an investment of $6-7 million.
• Sourcing from India: Wal-Mart has a large sourcing business in India. The retail major sources goods worth $125 million a year from Punjab. In 2010, Wal-Mart is planning to increase sourcing from India to strengthen its global business.
• Preference for Kirana/local retailers: According to a survey by ASSOCHAM in early 2010 in which it interviewed 5000 shoppers in various cities in India, kirana stores (mom and pop stores) and local retailers were the preferred destination for shoppers as compared to shopping malls. The survey found that goods were less expensive (as much as 25%) in local kirana stores as compared to big shopping malls. Smaller stores also offered more variety and affordable options with sustainable quality at a negotiable price (reduced margins).
• Training centers: Inheriting a model from its U.S. parent, Bharti-WalMart (Best Price Modern Wholesale) intends to set up its own training centers to train less-privileged youth to work in retail stores.
• FDI in retail in India: In India, the Government did not allow foreign investment in multi-brand retail. It allows 51% FDI in single-brand retail and 100% in wholesale venture. (Update: The Indian Govt. has changed its policy towards multi-brand retail in Nov 2011) In 2007, Walmart Stores and Bharti Enterprises entered into a joint venture and began cash & carry stores under the brand Best Price Modern Wholesale.
• Carrefour in India – Carrefour Wholesale Cash & Carry: In December 2010, Carrefour, the French international chain, launched its first cash & carry store in India (in the capital in New Delhi). The store with an area of 5200 square meters offers about 10,000 SKUs in food and non-food to local businesses, restaurants and local mom and pop stores.
• METRO Cash & Carry in India: In 2003, METRO Cash & Carry entered the Indian market in the self-service wholesale category. By early 2011, it had six wholesale distribution centers in four major cities (Bangalore, Hyderabad, Mumbai and Kolkata). The company caters to business customers (hotels, offices and small retailers) and sources a large part of its products locally from local suppliers, co-operatives and self-help groups.
• WalmartLabs in Bangalore : In addition to its R&D centre in the Silicon Valley, Wal-Mart plans to set up another facility in Bangalore, India (expected to be set up by Dec 2011) with about 100 developers to work on technologies and solutions for Wal-Mart’s global e-commerce business.

This case study/article, titled Wal-Mart in India, was originally published at Casestudyinc.com.

What is ‘Great Value’ brand?

In 1993, Wal-Mart launched the Great Value store brand. ‘Great Value’ is the largest grocery brand and the biggest brand that Wal-Mart has with thousands of products spanning 100 categories. Wal-Mart has more than 5,250 of its Great Value private-label products.

What did Wal-Mart do to its store brand?

Wal-Mart improved its private label offering – the Great Value line of products. Wal-Mart worked with both the suppliers and its customers for over a year to assess the quality of more than 5,250 of its Great Value private-label products against top national brands.

Features of Wal-Mart’s Brand Makeover:

• Altered the formulas for 750 everyday items, mostly foods. E.g. The kids’ breakfast cereal was made crisper.
• Product Innovation: Introduced new products which were designed using consumer feedback. Wal-Mart trained customers to do comparisons and give feedback on what they were looking for. E.g. New unusual flavors like mocha mud slide and cake batter introduced in the Great Value all-natural ice cream range. 80 new products under the Great Value line, such as thin-crust pizza, fat-free caramel swirl ice cream, and organic cage-free eggs.
• New packaging design to provide a more consistent, consumer-friendly image. E.g. More prominent nutritional information with nearly all labels in both English and Spanish languages.

Why did Wal-Mart overhaul its oldest and biggest store brand?

Private Label Store Brands vs. National Brands

Consumers prefer buying private label store brands instead of national brands in times of economic uncertainty. Why? Simple, because they match the quality of national brands and that too at lower prices. Data tracker Nielsen reported that, in 2008, sales of private-label items increased 10% compared to a 2.6% increase for branded goods. An industry trade group, the Food Marketing Institute found that, in 2008, around 64% of buyers (59% in 2007) said they often or always preferred a store brand as compared to a national one. This is an indication that the initial hesitation shoppers had towards store brand products is disappearing and very quickly.

Advantages of Private-label brands/products

• Typically cost less (5% to 20%) than name-brand products.
• Higher profit margins for retailers owing to lower overhead costs and zero marketing expenses.

How private labels are faring at other retailers?

• Kroger’s private-label collection set a new record when it touched 27% of overall sales in its most recent quarter.
• Safeway’s ‘O Organics’ store brand is very successful. The retailer is now licensing it for use by other retailers.

Keywords: Wal-Mart, groceries, retailing, generic label, private label store brands, brand strategy, national brands

Related Articles and Case Studies on Wal-Mart (PDF files)
• Organization Culture at Wal-Mart
• Wal-Mart’s Supply Chain Management Practices
• Tesco takes on US Wal-Mart
• Wal-Mart in Japan
• Of Wal-Mart price cuts, Struggling Retailers and Weak 2008 Retail Sales Forecast
• Wal-Mart’s Marketside or Tesco’s Fresh and Easy stores in US


Other Articles on Brand Makeover:

• Bharti Gets a Brand Makeover

This case study/article, titled Wal-Mart’s Great Value Brand Makeover, was originally published at Casestudyinc.com.

The focus of this case study is the supply chain of the world’s largest retailer, Wal-Mart. Wal-Mart in recent years has struggled with its supply chain. The big question is: Will Wal-Mart be able to revive the competitive advantage it had in the past with its efficient supply chain? This case discusses the supply chain management practices of Wal-Mart over the years. A brief of Wal-Mart’s past distribution, logistics and inventory management processes is covered. The use of innovative Information Technology (IT) practices to enable the supply chain is discussed and highlighted. The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered.

Table of Contents

1. Introduction – Can Wal-Mart sustain its Supply Chain Advantage?
2. Wal-Mart in US Retail Market
3. Wal-Mart – Company Background
4. Wal-Mart – Timeline



5. Wal-Mart: Quick Facts (Revenues, Total Employees and Stores, Competitors, Major Brands/Labels, Business/Growth Strategy)
6. MANAGING THE SUPPLY CHAIN – THE WAL-MART WAY
7. Pricing and Procurement Strategy
8. Supply Chain Integration through Product/Process Knowledge Sharing
9. Supply Chain Partnerships
10. Distribution Strategy
11. Logistics Management
12. Cross Docking
13. Inventory Management
14. Store Formats
15. Wal-Mart – International operating formats
16. Related Reading
17. Questions for discussion
18. View sample pages of this case study

Case Study Keywords: Wal-Mart, Supply Chain Management, Retailing Strategy Case Study, Logistics and Distribution, IT enabled supply chain, Information Technology, Supply Chain Partnerships, supply chain integration, information sharing, inventory management, retail store formats, cross docking, pricing and procurement, Sam Walton, discount stores, walmart.com.

Case Questions for Discussion

1. Wal-Mart’s focus on supply chain management is responsible for its leadership in the retail industry. Discuss the distribution and logistics practices adopted by Wal-Mart. How far has Wal-Mart’s supply chain contributed to its competitive advantage? Explain.
2. Companies that have significant buyer power and are very focused on exerting price pressure on their suppliers rather than seeking increased profitability through business process innovations. Support this statement with examples/best practices from your own field.
3. Wal-Mart has always used innovative information technology tools to supplement its supply chain. In a few words, explain how use of IT tools/enabled processes have benefited Wal-Mart. How has IT impacted you/your department?
4. What steps can Wal-Mart take in order to revive/sustain its supply chain advantage?
5. Wal-Mart invited its major suppliers to develop profitable supply chain partnerships. Discuss how good/bad is sharing knowledge/critical information with vendors/suppliers or even customers?
6. “It’s not a sale; it’s a great price you can count on every day to make your dollar go further at Wal-Mart.”, as quoted in the article, “Pricing Philosophy,” posted on www.walmart.com. Comment.

Other Case Studies on Wal-Mart

• Organization Culture at Wal-Mart
• Wal-Mart in Japan
• Tesco takes on US Wal-Mart

Case Updates/Snippets

• Wal-Mart’s new slogan – In September 2007, Wal-mart changed its slogan to “Save Money. Live Better.” Wal-Mart's earlier slogan for 19 years was “Always Low Prices.”
• Benefits of shopping at Wal-Mart – According to a study by research firm Global Insight, Wal-Mart saves American families $2,500 each year. This figure rose from $2,329 in 2004 by 7.3 percent.
• Wal-Mart’s new slogan in 2011: Wal-Mart’s latest tagline is “Low Prices. Every Day. On Everything.”
• Wal-Mart Online – Wal-Mart has 10,000 stores globally with annual revenues of more than $400 billion and 200 million weekly shoppers. According to Internet Retailer, it ranks six as in the largest Internet retailer list. Wal-Mart trails Amazon.com Inc, Staples Inc, Apple Inc, Dell Inc and Office Depot Inc. Wal-Mart does online business in United States, the UK, Canada and Brazil and does not reveal the percentage of online sales. Its digital technology unit called @WalmartLabs targets smartphones and social networking audience.

This case study/article, titled Wal-Mart’s Supply Chain Management Practices, was originally published at Casestudyinc.com.

This case study focuses on Tesco’s expansion plan and its entry strategy in the U.S. which places it directly against competitor and retail giant Wal-Mart.

Tesco in US Retail Market

UK’s largest retailer Tesco and one of the top supermarket operators in the world, plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and entry strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.

Case Study Contents

1. Introduction – Tesco in US Retail Market
2. Tesco – Company Background and Timeline
3. TESCO at a Glance
4. Localization Strategy – Tesco in South Korea
5. Tesco’s Business Strategy in the US – Healthy food, No waiting
6. Store Formats
7. Financial Highlights
8. Related Reading
9. View sample pages of this case study

This case study covers the following issues:

• Assess Tesco’s globalization strategies
• Examine and analyze the entry and expansion strategies of Tesco in US
• Study how Tesco localized its retail practices in US
• Understand Tesco’s efforts to integrate its global best practices with local strategies in US

Case Study Keywords: Tesco, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets

Case Snippets/Updates:

• The world’s third-largest retailer: Tesco is the world’s third-biggest retailer by sales behind U.S. retail chain Wal-Mart Stores Inc. and French retail chain Carrefour SA.
• Tesco has 4,331 stores worldwide. In 14 countries, Tesco employs 470,000 people. (Jan 2010 figures)
• Top five supermarket groups in the U.K. – Tesco, Asda, Sainsbury, Morrisons and Co-op/Somerfield. These five groups have around 85% of grocery retail in the U.K. market.
• Tesco’s market share in U.K. – Tesco has approx 30% market share of British grocery retail
• By September 2009, Tesco had around 126 stores open in the U.S.
• Tesco’s U.S. operations (Fresh & Easy) reported a GBP85 million trading loss in the first half of the year (six months to August 31, 2009).
• A report on European Retail Forecast by RetailNet Group (RNG) indicates that, by 2014 the top 15 European retailers would capture 66% of retail sales growth (from 43% in 2009). The report covers more than 200 major retailers, 880 store banners (more than 2,12,000 stores) from more than 41 countries and includes major retailers Wal-Mart, Tesco, Aldi and Carrefour. These retailers account for over 47% of all retail sales across Europe.

Additional Reading: Related Cases/Articles on Tesco

• CSR initiatives at Tesco
• Tesco’s mistakes in the US market

This case study/article, titled Tesco takes on US Wal-Mart, was originally published at Casestudyinc.com.

The focus of this case study is the hurdles faced by retailing giant Wal-Mart in the Japanese market. WalMart’s best practices in retailing like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu…In December 2005, Wal-Mart acquired a controlling 50.9 percent stake in Seiyu. However, Wal-Mart has since found it difficult to save the company even after investing more than one billion dollars. The company is revamping stores in hopes of drawing new customers. After exiting from Germany and South Korea last year (because it could not adapt to local tastes), Wal-Mart wants to maintain its presence in Japan. Success in Japan is important to Wal-Mart because a strong presence in the world’s No. 2 retail market is a key driver to future business growth.

Introduction – Wal-Mart in US Retail Market

Wal-Mart is the world’s largest retailer with $345 billion in sales for the fiscal year ending Jan. 31, 2007. Wal-Mart Stores, Inc. includes Wal-Mart Supercenters, discount stores, Neighborhood Markets and SAM’S Club warehouses. Wal-Mart employs 1.9 million associates worldwide ….

Case Study Contents

• Introduction – Wal-Mart in US Retail Market
• Wal-Mart – Company Background
• Wal-Mart – Timeline
• Wal-Mart: Quick Facts
• Wal-Mart's turnaround quest: Will Wal-Mart's mass-market formula work in Japan?
• Wal-Mart increases stake in Japan's Seiyu to 95%
• Localization Strategy – WalMart's failure in Germany and South Korea
• Cost-Leadership Strategy- WalMart's core philosophy – EDLP
• Cheap stuff at cheap prices – Japanese consumer mindset
• Is Wal-Mart the only one struggling in Japan?
• Will Seiyu get to U.S.-style EDLP in Japan?
• Store Formats
• Related Reading
• View sample pages of this case study

Case Study Keywords: Walmart, Wal-Mart Stores Inc., Japanese Retail Industry, Every Day Low Prices EDLP, Carrefour, Daeiei, Aeon Co., Sam’s Clubs, Consumer Behavior, Low cost strategies, Localization Strategies, Pricing Strategy, IT systems, Supply Chain and Logistics, supermarkets

This case study/article, titled Wal-Mart in Japan, was originally published at Casestudyinc.com.