8/3/2019 Fate of Walmart
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By
Arpita
Atrayee
Varun
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y Walmart-USA
y Walmex-Mexico
y Asda-UK
y Seiyu-Japan
y Best Price-India
Do not run by own name unless it has 100% subsidiary in the country
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y Started up in suburbs of Amritsar
y Plans to move north to south
y Plans to open up in Mumbai tying up with BhartiGroup next
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(According to Zenith Management Consulting)
Walmart is Master of manipulating perception
Trap for Customers
Slogan- Always low prices
Business Model- low price enabled by operating efficiency and buyingpower
It sells itself in following two ways:
i) Media advertising central message We have lower price than anyoneelse. Added with second critical element:
ii) The opening price point-it is very low priced , high velocity itemplaced in highly visible spots in all store sections price spin
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Comparison of price of the other items in each section shows:
y Only 15% - 20% of items Walmart sells are actually priced lower thancompeting retailers
y 80% - 85% of itemsWalmart sells are more expensive than competingretailers
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(According to Zenith Management Consulting)
Trap for Vendors
Vendors gets high revenue which is their prime interest if they sell toWalmart
y Ones producer becomes supplier ,Walmart accounts for between 30%-70%of their revenue
y Each year price they will receive for selling each item and quantities theymust sell is fixed
y Each year 5% of price is reduced for items that has not undergoneinnovation
y If supplier is unable to meet Walmarts price and volume demanded,thesupplier is dropped or if the supplier is too large,the number of items
Walmart purchases is significantly reduced
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(According to Zenith Management Consulting)
y Poor Quality
y
Poor Service
y 80% - 85% of items are more expensive than competing retailers
y Customers are not getting what they are thinking
y Vendors do not benefit the way they think they will
y Workers are dissatisfied enough to file lawsuit
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y India : second most populous nation - large potential customers &
employees
y The Indian government opened 51% FDI in multi-brand retail
y The Bharti Group is likely to invest $2.5b by 2015 in the retail sectorwhile entering into a 50/50 joint venture with Wal-Mart
y McKinsey Report : India's $250 billion retail business is the eighthlargest in the world and has the potential to grow 7% by 2012
y Economists expects : - GDP to increase by 7%
- Income growth rate by7%-7.5%
y Siddhartha Roy(Chief economist ,Tata Group) :"Total consumption expenditure is likely to grow at over 6%"
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y Fierce backlash from
-Political parties (like-BJP,Congress allies-DMK,TMC)
-Traders associations (like-Confederation of All-India Traders)
- Mom - and - pop stores i.e. kirana stores
- Retail stores (like-Big Bazar, Spencers)
y Predicting Consequences
- wipe out small unorganized retails
- monopoly
- unemployment
y Attitude of Indian mass
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FATE?
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