Wal-Martcurrent situation in India
“Thepurpose of this speech is to analyze Wal-Mart current situation inIndia, and look into ways the company can do differently goingforward, in order to take a leading role in the retail market.Wal-mart is the one of the largest retailer stores globally. SinceWal-Mart entered the Indian retail market, things seem to be hard.First, the company faced lobbying issues that started when thecompany revealed in its report to the American senate, that $ 25million has been paid to American lawmakers to help it gain entryinto the Indian market. As a result, this led to the lobbyinginvestigation since in India these activities are considered illegal.In addition, after doing its own investigation, the company suspendedits CFO and the legal team, citing possible violation however thismay lead to more allegations. Wal-Mart on the other hand, hasmaintained that all disclosures were made according to the prevailingregulations in American, thus no violation of Indian laws.Consequently, the probe reports remain inconclusive and the case wasclosed because evidence lacked whether the company violated theIndian laws by the use of American lawmakers to lobby for its entryinto the lucrative Indian market (Ramanna, Karthik, &VidhyaMuthuram, 2015).
Themain issue faced by Wal-mart is how to rebuild itself in order totake a leading role in the lucrative retail sector in India. Thiscontroversy and other investigations concerning its association withthe Bharti group affected Wal-Mart’s plans in India. It stopped itsefforts to enter into the front-end retail and even halted expansionof cash-and carry business. In the corporate world, improperlysought political lobbying can increase organizational compliancerisks because it can lead to exposure of the business to corruptionand damage to the corporate image. For example, the joint venturewith Bharti enterprises led to the suspension of some of the keyexecutives supposed to engage in the bribery claims. Lobbyingallegation is a serious and costly issue. Moreover, theseinvestigations interfered with the company’s expansion in theIndian market since the authorities in the nation began theirinvestigation to establish whether the joint venture had attempted toevade foreign investment laws. In addition, such allegations may haveserious consequences for not only Wal-Mart, but also other foreignretailers in the nation. Following these claims, many politicalofficials rejected foreign retailers to have the permit to openstores in Indian market. Furthermore, potential misconduct adds fuelto the opposition and this may threaten the operations of otherforeign retailers in the country. However, a company can useeffective ways to lobby for improvement in the business environmentby working with business chambers and trade associations. My teambelieves that lobbying should be redefined in order to make adistinction from illegal influencing of policy makers (Hiscock,2012).
Initially,Wal-mart had entered in India through a joint venture, but nowfocuses on wholesale business because of the several restrictions inthe segment of multi-brand. What Wal-Mart should do differently is tocontinue with its operations expansion on its own. Since it hasalready investigated potential opportunities, the firm can utilizeits strengths to deal with competition in the region. To succeedWal-mart can also implement effective strategies to respond tocompetitor’s initiatives in promotion and pricing. Wal-Mart isbelieved to be a low- price and powerful brand with a reputation formaintaining basic customer service. With technological advances,Wal-Mart in India should consider starting with online undertaking,in order to reach their consumers directly. This is becausecurrently, it only deals with these small retailers who purchasetheir products as a wholesaler. The use of internet makes it easierand faster for consumers to shop, as they become more willing toexperience new forms of retail purchasing. Moreover, customer serviceand satisfaction will be a critical issue that should be looked at.As the market continues to be crowded with new competitors, customerservice will play a main role in its survival and profitability.Wal-Mart India should maintain it customer service teams in order tomanage any queries from customers, tracks how the goods ordered bycustomers move and ensure that they get delivered on time.Additionally, good customer service will help to build loyalty andencourage repeat purchase. This is because as the retail sectorevolves, customer satisfaction is the main driver for mostorganizational success.
Socialmedia will also be another strategy to ensure that Wal-Mart take aleading role in the India’s lucrative market. The company shouldenhance the customers experience by carefully managing its socialmedia. A support team should be created to help with the managementof the company’s presence on twitter and Facebook. Mostsignificantly is the innovation and focus on R&D activities. Inorder to assume the leadership position in the market, the companyshould use innovation and R&D to leverage its growth. So far thecompany is the single largest multinational retail chain that canengage with the Indian authorities. For this reason, the company maygain a first mover advantage and maybe acquires the largest share ofthe rail market in India. Wal-Mart is optimistic that domesticconsumption in India, as well as retail growth will increase over aperiod of time. This is a great opportunity for the company asdisposable income increase. Another strength of this company is lowcost of production because the economies of scale. In fact, costleadership may be able to kill other competitors in the nation(Dayal-Gulati &Jain, 2010).
Onthe other hand, the company has its weaknesses that include heavyscrutiny in case of any mishap due to its situation as the biggestretail brand. One example is the huge issue of lobbying that put thecompany into the spotlight. Currently, foreign multi-brand retailinginvestment in India is allowed but with restrictions and this mayinterfere with the expansion strategy. However, due to soaringinflation in the nation, a multi-band retail store will benefit thelocals as it helps to keep prices of food and community undercontrol.
Inconclusion, a retail boom will create future opportunities in thenation. That is why foreign companies are waiting for the Indiangovernment to take a step that will expand the foreign directinvestment into multi-brand stores. Unmistakably, competition islikely to increase. Yet, the company can utilize better its politicalcapitol and gain knowledge from local retailers experiences so thatthey can bend their uniformity, as well as consider the local culturereaction. To take a leading role in the market Wal-Mart will have toutilize the internet and improved its customer service, in order tohelp the consumers to differentiate between the retailers and alsogenerate loyalty (Dayal-Gulati& Jain, 2010)”.
Dayal-Gulati, A., & Jain, D.(2010). Winningstrategies for the Indian market.Evanston, Ill: Northwestern University Press.
Hiscock,G. (2012). India`sStore Wars: Retail Revolution and the Battle for the Next 500 MillionShoppers.Chichester: Wiley.
Ramanna,Karthik, and Vidhya Muthuram. (2013)."Wal-Mart Lobbying inIndia?" HarvardBusiness School Case,114-023.(Revised January 2015).