Walmart Case Analysis

Walmart International is the third largest retailer in the world behind Walmart (US) and Carrefour. Walmart is looking to expand into new territories to grow its revenue. Walmart has had successes and failures when expanding into a new country and some of the failures can be attributed to a lack of cultural understanding of the local market and facing stiff competition (Alcacer, Agrawal, & Vaish, 2017). In order to succeed, Walmart must individualize its expansion plan into each new country based on the local customs and culture to succeed (Choudhary, 2012).

One of the untapped markets Walmart has not had a presence in such as India. According to research conducted by McKinsey, in the past 20 years multinational corporations have made significant progress in expanding into the Indian market. This expansion process has not been easy because companies must learn to do business the “Indian” way which requires companies to show commitment to the country and invest in local talent (Choudhary, 2012).

There are a lot of logical and legal considerations a company must acknowledge before moving into a new market. In India, a foreign company that wants to open an independent store must source 30% of their products from small Indian firms and they cannot open a store that involves multiple lines of products from different manufacturers. These rules do not apply to domestic companies and prevent Walmart from opening a supermarket store. However, fully owned foreign companies can work in the wholesale sector, a presence where Walmart has established itself in with these cash and carry stores. In addition to this type of expansion and avoidance of sourcing 30% of its products from small Indian firms, Walmart has created a partnership with Bharti Enterprises, one of Indian’s largest cell phone providers. With this partnership, Bharti Enterprises will open and run Walmart stores while Walmart provides logistics, purchasing, and support of Bharti’s products. Because Bharti will not have expertise in dealing with a large scale expansion and management of Walmart’s stores, Walmart should look to partner with a local supermarket company to help them grow and expand since they’re in the same industry (Worstall, 2017).

Within the country of India, there are 29 states and 22 languages spoken (Official Languages of India). The best way for Walmart to succeed in the Indian market is to create a partnership with supermarkets. In the Indian supermarket industry there is no superior industry leader because these companies are located within specific states of India and not a national brand. For example, Star Bazaar is located in Mumbai, Pune, Kolhapur, Aurangabad, and Bengaluru. Walmart can create a partnership with Star Bazaar to help them expand out of their current regions to all over India. Star Bazaar with the help of Walmart can become a national brand within India like Walmart is in the United States. Walmart must invest in