Walmart

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Wal-Mart

Wal-Mart, a US public corporation that ran large discount department stores, was by revenue the biggest public corporation in the world.The company was established in 1962 by Sam Walton. On 31 October 1969, it was incorporated and, by 1972, it had obtained listing on the New York Stock Exchange .In the financial year ending in 2007, the global Fortune 500 list ranked Wal-Mart at the top of the list, with revenues of US$351 billion.

Wal-Mart constantly emphasized its corporate philosophy of strengthening its relationships with employees, suppliers and customers. Building its own transportation systems had allowed Wal-Mart to enjoy transportation cost savings and had helped Wal-Mart to deliver products to its various stores within 48 hours. Taking advantage of its wholly owned transportation capabilities, Wal-Mart was four times faster than its competitors in replenishing its merchandise. The pricing of its products was economical and prices were allowed to vary daily. On the procurement side, owing to the huge volume of its purchases, the company enjoyed strong bargaining power. Reliably low prices of Wal-Mart ensured that sales volumes were consistently elevated. Wal-Mart’s retailing activities were operated by three primary subsidiaries: Wal-Mart International, Sam’s Club and Wal-Mart Stores Division US. In addition, Wal-Mart had nine different retail formats for its businesses: restaurants, cash-and-carry stores, membership warehouse clubs, apparel stores, soft discount stores, bodegas (small markets), supercenters, food and drug stores, and general merchandise stores.

Global Strategy, Local Focus

With the opening of a Sam’s Club near Mexico City in 1991, Wal-Mart turned into an international company. Within two years, perceiving the growing number of opportunities in the global market, Wal-Mart International was established to manage its worldwide operations. Over time, Wal-Mart expanded outside the US through different ventures with mixed results. It was extremely successful in North and South America (eg, in Canada, Mexico, Puerto Rico, Argentina and Brazil), but it had to sell its stores in Germany and South Korea in 2006 due to sustained losses. Since 1991, Wal-Mart International had been rapidly growing and so had its acceptance among consumers. Wal-Mart’s promise of “every day low prices” transcended language and was well understood by consumers at nearly 3,000 stores in 13 countries. Wal-Mart International employed over 550,000 people across the globe.

An important reason behind Wal-Mart International’s success had been its ability to apply its unique culture and successful retailing concept despite daunting business and cultural challenges. As it expanded, the division made concerted efforts to become involved in local communities and adapt to local cultures. However, despite its standing and huge sales turnover of US$285 billion, Wal-Mart continued to be predominantly a North America-based chain.

The Wal-Mart–Bharti Joint Venture

Bharti, with its deep knowledge of India’s fast-growing consumer market and Wal-Mart, with its extensive global retail experience, share the same commitment to building relationships with producers in order to provide great quality at reasonable prices to consumers every day.

In November 2006, Wal-Mart announced it was entering the Indian retail sector by partnering with Bharti. Wal-Mart had chosen Bharti for various reasons. It was a market leader in India’s telecom market and it was one of India’s 10 biggest companies, employing over 30,000 people. Its market capitalisation was worth more than US$25 billion . Finally, it had a long history of partnering with foreign companies. As Bharti was seen as an ideal partner for Wal-Mart, the move had long been expected

Sunil B. Mittal was Bharti’s chairman and was known as the czar of Indian telecoms. According to the Financial Times, Mittal’s story was one of “entrepreneurial drive overcoming the...
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