Case study Bharti & Walmart
GIE-6103 – Doing Business in Asian Markets
Professor Dr. Mohammad Nurul Huda Mazumder
Case Study: Wal-Mart and Bharti Transforming Retail in India
Faculté des Sciences de l’Administration
03/30/2014
EXECUTIVE SUMMARY
The case study is conducted to analyze the sustainability of the joint venture of Wal-Mart and Bharti in disregard of the fact that the two companies have split apart in late 2013. Therefore, the paper will be conducted by using the information given in the case material and course materials, with extra information related to statistics and government policies before the split up of the joint venture.
Through the SWOT analysis and pros & cons analysis of the joint venture, it is crystallized that the joint venture was facing obstacles coming from intrinsic factors such as the challenge to maintain low cost leadership and the ability to adapt local market for Wal-Mart and extrinsic factors such as government policy, consumer behavior and poor infrastructure. The challenges Wal-Mart was facing couldn’t all be solved with the partnership. For instance, the market share and overall profitability were low due to the unsolved problems with Wal-Mart’s strategic orientation and the localization to the market, leaving uncertainty to the joint venture. Hence, among three alternatives of 1) Change strategic Orientation and re-positioning; 2) Improve corporate image and social responsibility and 3) Call off joint venture, it’s recommended for Wal-Mart and Bharti to maintain their partnership but to re-position the joint venture and localize themselves to the market. The recommendation would be further explained in the last section of this paper.
PROBLEM STATEMENT
Given the circumstance, the joint venture was facing challenges on the sustainability for different reasons. Wal-Mart has planned ambitiously for the joint venture, however it failed to achieve the goals of opening sufficient amount of stores in order to gain the market share and
Professor Dr. Mohammad Nurul Huda Mazumder
Case Study: Wal-Mart and Bharti Transforming Retail in India
Faculté des Sciences de l’Administration
03/30/2014
EXECUTIVE SUMMARY
The case study is conducted to analyze the sustainability of the joint venture of Wal-Mart and Bharti in disregard of the fact that the two companies have split apart in late 2013. Therefore, the paper will be conducted by using the information given in the case material and course materials, with extra information related to statistics and government policies before the split up of the joint venture.
Through the SWOT analysis and pros & cons analysis of the joint venture, it is crystallized that the joint venture was facing obstacles coming from intrinsic factors such as the challenge to maintain low cost leadership and the ability to adapt local market for Wal-Mart and extrinsic factors such as government policy, consumer behavior and poor infrastructure. The challenges Wal-Mart was facing couldn’t all be solved with the partnership. For instance, the market share and overall profitability were low due to the unsolved problems with Wal-Mart’s strategic orientation and the localization to the market, leaving uncertainty to the joint venture. Hence, among three alternatives of 1) Change strategic Orientation and re-positioning; 2) Improve corporate image and social responsibility and 3) Call off joint venture, it’s recommended for Wal-Mart and Bharti to maintain their partnership but to re-position the joint venture and localize themselves to the market. The recommendation would be further explained in the last section of this paper.
PROBLEM STATEMENT
Given the circumstance, the joint venture was facing challenges on the sustainability for different reasons. Wal-Mart has planned ambitiously for the joint venture, however it failed to achieve the goals of opening sufficient amount of stores in order to gain the market share and
References: Edwards, Ron; Adlina Ahmand and Simon Moss (2002): Subsidiary Autonomy: The Case of ICC (2014): Open Markets Index 2013 (05.03.2014) [URL: Klaus Schwab, World Economic Forum (2013): The Global Competitiveness Report 2012–2013 Indranil Bose (2013): Wal-Mart and Bharti: Transforming retail in India Yadong Luo (1998): Joint Venture Success in China: How Should We Select a Good Partner?