XZZV11D

Walmart

Sr. No.

Index

Page No.

1.

Acknowledgement

2.

History

3.

Mission and Vision

4.

Competetive Advantage of Walmart

5.

Retail Industry In India

6.

Walmart Store In India

13

7.

Challenges For Walmart

15

8.

Walmarts Strategy

19

9.

SWOT Analysis

21

8.

Pestle Analysis

23

10.

Conclusion

27

11.

Recommendation

28

12.

Bibliography

29

Business Environment

Walmart

Acknowledgement
It has always been our sincere desire as a management student to get an opportunity to express our
views, skills, attitude and talent in which we are proficient. A project is one such avenue through
which a student who aspires to be a future manager does something creative. This project has
given us the chance to get in touch with the practical aspects of management.
We are extremely grateful to the Auro University for having prescribed this project work to us as a
part of the academic requirement in the master of management studies (MBA). We wish to
appreciate the management and our friends for providing the entire state of the art infrastructure
and resources to enable the completion and enrichment of our project.
We wish to extend a special thanks to my Miss Indrani Sen Gupta without whose guidance, the
project may not have taken shape.

Business
Business
Environment
2

XZZV33D
Walmart

INTRODUCTION
History
SamWaltonandhisbrother,JamesBudWalton,foundedWalMartin1962.TheWaltonboys
revolutionizeddiscountretailing,withtheresultthatby1989WalMartwastheworldslargest
retailer.TheWaltonspropositionwassimple;deliverawidearrayofmerchandiseatdiscount
pricestoppedupbyafriendlyservice.By1998,itwasservicingmorethan100millioncustomers
weeklyandhadasalesvolumeofUS$138billionwithanoveralloperatingmarginof5.8percent
TheWaltonbrothersopenedtheirfirstWalMartDiscountCitystoreinRogers,Arkansas,after
BenFranklinmanagementtheWaltonsoperatedanumberoffranchisedstoresfromthechain
rejectedasuggestiontoopendiscountstoresinsmalltowns.TheDiscountCitystoreconcept
consistedofservicingsmallandmiddlesizedtownsatpricesequaltoorlowerthanpricesin
nearbycities.In1972SamWaltontookthe30existingstorespublicusingtheproceedsofthe
offeringtobuildawarehousethatallowedhimtobuylargevolumesofmerchandiseatlower
prices.Duetothestrategyofcoveringsmalltowns,virtuallyignoredbyothercompetitors,the
expansion progressed rapidly without any substantive direct competition until the mid 1980s.
However,by1993,WalMartwasin47statesanditsexpansionledtocompetitionwithKmart,
Target,SearsandJ.C.Penney,forwhichtheestablishedplayerswereillprepared.
Inthe1990sthecompanymovedbeyonditsruralexpansionstrategyandbegandiversifyinginto
groceryoperations(WalMartSupercenters),membershipwarehouseclubs(SAMSClubs)and
deepdiscountwarehouseoutlets(BudsDiscountCity).Bythistimethecompanyalsofeltitwas
nowpreparedforforaysoutsidetheUnitedStates.
SamWaltonledthecompanyuntil1988,beingapowerfulCEOwhosephilosophydroveevery
aspectofthebusiness.Hebelievedinempoweringyetcontrollingemployees,maintainingWal
Martscostsandpricesbeloweverybodyelses,andaimedatlogisticsexcellencebymaintaining
technologicalsuperiority.

Business Environment

Walmart

Walmart employs 1.6 million associates worldwide in more than 3,700 stores in the US and more
than1,500 throughout the rest of the world.
Walmart Slogan:
Save money, live better.
The culture consists of Wal-Mart:

Quality product at low prices everyday

Respect for the individual.
Service to their customers.
Strive for excellence.

Divisions of Wal-Mart:
Neighborhood Markets (groceries)
Sams Club (membership)
Discount stores (FMCG& apparels)
Wal-Mart super centers (groceries)
McLane (Acquired just now)

Divisions

Discount

International

Stores
942

Total

Business
Business
Environment
4

Supercenters

Sams

Neighborhood

238

Club
71

Markets
37

XZZV55D
Walmart

Vision

Companys vision is to provide good

quality and services to our customers,
while remaining the market leader and
striving daily to be the most admired
company.

Business Environment

Walmart

Mission

Companys mission is to provide quality

products at an everyday low price and
with extended Customer service.

Business
Business
Environment
6

XZZV77D
Walmart

Competitive Advantage of Walmart

Supply Chain Management:
This is one of the best competitive advantages. Wal-Mart has two main supplier P&G and HUL.
The supply chains add the value to the company.

Price Leadership:
Wal-Mart always sells product on low price and they forward this benefits to their customers.
Exchange benefit:
The Wal-Mart customer can exchange their purchased product through any Wal-Mart outlets.
Brand Image:
The strongest competencies of Wal-Mart are there brand image in the minds of consumer. It is the
leader of the world retail industry.

Business Environment

Walmart

Retail Industry In India

Retail industry is one of the largest growing industries in India. In India it has economy of
13%GDP. India has uppermost number of outlets per person and it is 7 per thousand. Retail sector
has over 14 million outlets operates in India. Indian retail space per capita at 2 sq. ft. / person is
lowest in the world and Indian retail thickness of 6 percent is highest in the world. India has an
annual income of over 45 lakh from 1.8 million households.
The retail industry is divided into two sectors; the first is organized and second unorganized
sectors.
Organized sector:
It mostly target market is urban area and their target customer is high income and middle class.
For example: Hypermarkets, Retail chains, supermarket and Retail outlets etc.
Unorganized Sector:
It refers to the conventional formats of low-cost vending. It is mostly run by localities in their
respective regions. Its target market is rural areas and semi-urban regions and their Targeted
customer is middle and lower middle class.
For example: Local Kirana shops, general stores, street vendors etc.
India Retail Facts:
Total Retail: Rs.2,000,000 crore (Rs.20,000 billion)
Modern retail size: Rs.1,64,000 crore (Rs.1,640 billion):
8.2 per cent of total retail
Employment in modern retail: 10 direct employment in retail and 100 indirect employment per
Rs.1 crore (Rs.10 million) sales
Total employment in modern retail: 1.65 million
Estimated indirect employment in modern retail: 1.65crore
Dependence on modern retail: Over 1.8 Crore people

Business
Business
Environment
8

XZZV99D
Walmart

The retail industry in India is anticipated to twice in worth from US$ 330 billion in 2007 to
$640billion by 2015 and is pegged to cross the U.S. $1 trillion mark by 2020. Actually, India has
topped AT Kearneys annual Global Retail Development Index (GRDI) for the third year in a row
as the most attractive market for retail investment.(AT Kearney GRDI ranks the top 30 emerging
countries for retail development and identifies windows of opportunity for global retailers to invest
in developing markets)There are many mergers and takeovers going on in recent time Wal-Mart
acquired McLane. It is trying to expand business in Asian continent mostly in India. Indian
competitors in Retail industry are Kirana stores, Pantaloons, K Raheja corp. group, Trent,
Landmark, A V Birla group, etc. Analysts believe the sector is likely to show significant growth of
over 9 % p.a over the next 10years and also see rapid development in organized retail formats,
with the proportion likely to reach a more respectable 25% by 2018.

Retail Market in India

Food and Grocery

Clothing and Textiles

Footwear

Furniture
3%

3% 8%

Catering Service

7%

Jwellery and Watches

Consumer Durables

39%

7%

Books, Music and Gifts

Mobile Handsets

8%

Others

Business Environment

9%

5%

11%

Walmart

Food and Grocery is the largest category within the sector with a whopping 39% share, followed
by the Apparel and other segments.
According to the most recent census survey, India occupies 17% of the world's population and
65% of these people are below the age of 35. There have been various government initiatives to
skill the youth, which has created a robust service sector in the country. The level of disposable
income and internal consumption in India has been rising consistently over the past 10 years and
the trend is likely to continue given the young demographics of the country.

Business
Business
Environment
10

XZZV1111D
Walmart

Key Players in Indian Retail Sector

Kirana Stores: This is the oldest and recognized format of unorganized retail, which has 97% of
market coverage. It is the main competitor for every retailer and other retail sector players in India.
Till now people of India prefer Kirana stores to buy daily goods. It has somehow brand loyalty of
consumer and it is located at very convenient places.
AV Birla Group: It has a strong presence in apparel retail and owns renowned brands like Allen
Solly, Louis Philippe, Trouser Town, Van Heusen and Peter England. The company has investment
plans to the tune of 8000 9000 crores till 2010. It has started to expand aggressively to compete
with other players.
Trent: It is a subsidiary of the Tata group it operates lifestyle retail chain, book and music retail
chain, consumer electronics chain etc. Westside, the lifestyle retail chain registered a turnover of
3.58 million in 2006. Trent became famous in short span of time.
Landmark Group: It invested 300 crores to expand Max chain, and 100 crores on Citymax 3 star
hotel chain. Lifestyle International is their international brand business. K Raheja Corp Group - It
has a turnover of 6.75 billion, which is cross US$100 million mark by 2010. Segments include
books, music and gifts, apparel, entertainment etc.

Business Environment

11

Walmart

Reliance: It has more than 300 Reliance Fresh stores; they have multiple formats and their sale is
expected to be 90,000 crores by 2009-10.
Pantaloons: Retail has 450 stores across the country and revenue of over 20 billion and is touched
30 million by 2010. Segments include Food & grocery, e-tailing, home solutions, consumer
electronics, entertainment, shoes, books, music & gifts, health & beauty care services. This is the
biggest competitor for new retailer coming to India.

Retail Industry Attractiveness study

These are the several characteristics to determine market attractiveness:

Market growth: The business monitor international India retail report for the fourth-quarter for
2011 that total sales will grow from U.S $ 411.28 billion in 2011 to U.S $ 640 billion by 2015 and
is pegged to cross the U.S. $1 trillion mark by the year 2020.
Market Size: Indian retail sector is divided in to two groups one is organized group and other one
is unorganized .In that only 8% retail market is organized and remaining 92%is unorganized so
there is huge scope for growth and expansion in Indian retail sector.
Market profitability: Probability in Indian market is moderate. Competitions from both
unorganized and organized sector have effect on probability. Higher the competition lowers the
profits.
Segmentation: As a part of organized sector Wal-Mart targeted an urban area, middle class or
higher middle class consumer with high income level. Mostly youngster and Indian housewife will
prefer shops like Wal-Mart.

Business
Business
Environment
12

XZZV1313D
Walmart

Distribution Channels: Distribution channels are direct, wholesale. Wal-Mart will have to apply
both distribution channels for consumers. It has also world best supply chain management and IT
facilities. It will become convenient for Indian consumer and will be easily available.

Opportunity in Indian Retail Market:

Overall Indian retail market is about U.S $ 206 billion and has 5% annual growth. Scope for a
growth in Indian retail market is 97%. India has emergence of middle class and consumer. About
60% of Indian population is in age group of 20-30 and youth are more declined towards the
modern shopping. Mostly Indian consumers are price conscious, so wall mart strategy Everyday
Low Price and wide range of products will attract Indian consumers.

Bharti - Wal-Mart Tie Up:

After entering into discussions with Tesco of UK and Carrefour of France, which did not
materialize, Bharti Enterprises of India finally struck a deal with Wal-Mart of US in November
2006. According to the deal, Bharti would handle front-end retail stores while Wal-Mart would act
as a wholesale and back-end partner. However, Bharti would use the name "Wal-Mart" for its
stores. The joint partnership planned to make investments in the retail sector to the tune of $100
million, which could go up to $1.46 billion. Wal-Mart was already procuring goods from various
Indian companies to the tune of $1.5 billion. Industry observers say that the Wal-Mart would
benefit from Bharti's experience in India while Bharti would benefit from Wal-Mart's experience in
overseas markets. However, after tremendous opposition from local people and political parties,
the first store opened in Amritsar in late 2009.

Wal-Mart Stores in India

In 2006, Wal-Mart Stores (Wal-Mart or the Company) identified India as a huge organic growth
opportunity for future. At that time, restrictions imposed by the Government of India prevented
Wal-Mart from operating in the Indian retail sector and foreign retail companies could not set up
operations in India in the multi brand retail format. As a workaround to this, in 2007, Wal-Mart

Business Environment

13

Walmart

entered India in the cash-and-carry business where 100% FDI was allowed. Wal-Mart's initial
entry was made in a joint venture with India's Bharti Enterprises.
Currently, Wal-Mart operates in India through 20 Best Price Modern stores where it has a 100%
holding. The Company offers more than 5,000 items, across various product categories like fresh
fruits, vegetables, poultry, mutton, fish, dairy, consumer packaged goods (food and non food),
general merchandise and household electronics and appliances.

Timeline:

2007: Announced
50:50 partnership
for wholesale
venture

2009: Open first

wholesale store in
Amritsar

2010: Invest U.S

$100 million in
Bharti owned cedar
support service

Business
Business
Environment
14

2012: Allegations of
bribery in India

XZZV1515D
Walmart

2013:Joint venture
with Bharti called
off

Challenges For Wal-

Mart

In India, the retail sector is dominated by small retailers consisting of local Kirana (i.e. grocery)
shops, general stores, handcart hawkers and pavement vendors. Wal-Mart's entry into India faced
severe opposition from these small shopkeepers, who currently account for the majority of retail
sales together forming 92% of India's total retail market. Major challenges for a new entrant
include:

Existing Set-up:
One of the biggest threats for Wal-Mart will be changing the way India shops. In the United States,
it is common for people to shop for groceries once every few days. Partly, this is because of the
fact that grocery stores in the United States are not located close to residential areas as they are in
India. Consequently, Wal-Mart customers buy in bulk, visiting the store infrequently. However,
Indian consumers visit a grocery store almost every day, sometimes more than once a day. In a
typical Indian neighborhood, daily needs stores are located within a few meters from the
residential blocks. In most cases, they give free delivery services for an order value of under a
single U.S. dollar. The convenience offered such stores face the biggest competitive threat by WalMart.
'Cheap and fresh' perception:
Another big challenge, which Wal-Mart faces in India, is consumers' perception. In the United
States, when you think of a big store, you think of lower prices. In India, the perception is exactly

Business Environment

15

Walmart

the opposite. The common perception is that smaller shops can offer lower prices because their
expenses are lower. In addition, since they do not store perishable food items in bulk, you will find
fresher items in smaller stores, particularly food items.

Existing Supermarkets:
Wal-Mart also faces tough competition from the existing Indian retail players. Indian companies,
who have understood the nature of the Indian shopper, are already competing with the small shops
by going the hypermarket route, selling goods at wholesale prices. This market is currently
dominated by Future Retail Limited with its brands - "Big Bazaar" and "Spencer's."
Booming Real estate prices:
Real estate prices in metropolitan areas in India have been rising consistently. Wal-Mart's success
would depend upon the cost of real estate it is able to acquire. Historically, Wal-Mart has set up
stores on the outskirts of cities where real estate is proportionately less expensive. This strategy
could prove risky in the Indian market as consumers would be discouraged by the idea of traveling
long distances, particularly given that there are many retail stores located much closer to them.
To stay competitive, Wal-Mart may have to incur high real estate costs, which will put pressure on
the Company's competitiveness and profit margins.
Lack of Supply Chain Management System:
Since Wal-Mart's competitive advantage is its supply chain dominance, entering alone would
require a large investment to establish distribution systems from scratch. Corruption and a lack of
transparency throughout Indian supply chains have required many retailers to sell goods through
middlemen, driving down retailers' margins. Getting the necessary products to stores without delay
would be a significant hurdle to Wal-Mart's success given the scattered logistics. In India, around

Business
Business
Environment
16

XZZV1717D
Walmart

40% of fresh produce of vegetables and fruits goes to waste due to the lack of investment in the
back-end infrastructure, such as refrigerated systems. Conversely, established players in the market
have already built supplier relationships with farmers and manufacturers, streamlining distribution
and reducing waste. Gaining access to these networks will present a big challenge for Wal-Mart.

Foreign Direct Investment (FDI) in Multi Brand Retail in India:

The Government of India in its cabinet meeting on 14 September 2012 approved 51% Foreign
Direct Investment (FDI) in multi-brand retail, thereby opening India's retail sector, but it came
with lot of riders and regulations. These include:

First, each state government in the Republic of India could decide upon the approval for

multi-brand retailing in their respective state.

A mandatory 30% of raw materials must be sourced from small and medium enterprises in

India. (Small industry being one where the investment capital is > U.S. $1 million.)
Minimum investment of U.S. $100 million must be made in new facilities - 50% of which
must be spent on building back-end infrastructure such as distribution centers, warehousing

and logistics within three (3) years.

Multinational retailers can conduct their business only in cities with a population of more
than 1 million.

With no investor setting up shop after the government allowed FDI in multi-brand retail, on
August 1, 2013, the government decided to water down some of the provisions which were seen as
obstacles to investment. These included:

To comply with the requirement of sourcing at least 30% goods from small vendors Retailers were allowed to source goods from medium, small and micro enterprises, where
the investment cap is U.S. $2 million instead of the earlier ceiling of U.S. $1 million.

Foreign retailers will now be allowed to open stores in cities with a population of less

Business Environment

17

Walmart

than one million.

Current Situation:
Things have been difficult for Wal-Mart ever since it made a foray into the Indian retail sector. The
Company is facing a dual challenge from small retail unions and the existing large supermarkets.
In late 2012, the Company suspended its chief financial officer and the entire Indian legal team for
possible violations of the U.S. Foreign Corrupt Practice (USFCPA) Act. Lobbying is not legal in
India and negotiations ahead may create more such allegations.
Since Wal-Mart Stores' JV with Bharti was called off in 2013, the Company has been focusing on
expanding its wholesale retail business in India and has not made any significant steps towards
entering the multi brand retail space either with another JV partner or on its own. At the same time,
Wal-Mart President and CEO, Doug McMillon maintains that the Company is extremely keen on
entering the multi brand Indian retail market space once there is clarity on the regulatory front.

Roadblocks:
Walmart is not keen on opening front-end retail in India because of tough conditions in the multibrand retail FDI policy, especially 30 per cent mandatory sourcing from Indian small and medium
sector and a minimum $100 million investment in new facilities with 50 per cent going into
greenfield backend. Enforcement Directorate probes into Walmart's $100-mn investment in the
Bharti group in 2010 for alleged FEMA violation. Walmart's lobbying disclosures to the US Senate
for greater access to Indian markets has also snowballed into a political crisis.

Business
Business
Environment
18

XZZV1919D
Walmart

Wal-Marts Strategy To Understand Indian Consumers

Wal-Marts entry into the Indian market is not going to be easy because of the diverse nature of
buyers in India. India is called a land of diverse cultures, which is divided into 35 states and union
territories. These states further consist of different cities and villages and the intensity of diversity
goes on increasing as we go into smaller segments. Making successful entry in such a market is
not a childs play even for worlds largest retailer. Walmart has tied up with Indias biggest telecom
company Bharti, which of-course has a deep understanding of customer needs and expectations.
Wal-Marts joint venture with Bharti will definitely help Walmart understand Indian customers in a
better manner. It will not only increase Wal-Marts reach into Indian market but will also generate
more trust among Indian consumers.
Understanding of consumer behavior of a countries consumer is very necessary for a company to
make a successful entry and its survival in due course.

Operational Strategy:

Capturing market share with everyday low price strategy.

The process of creative destruction.

Responding competitors strategy. (Opened Pennies-n-Cents stores in against dollar

stores).

Business Environment

19

Walmart

Cultural adaptation.

Training employees because people are key to Wal-Mart's business

Buy at less to sell at less.

Withdrawal strategy.

Human Resources:
As the worlds largest retailer, we depend on our Human Resources team to understand the
connection between fitting the right person to the right job and our broader mission across the
globe of improving our customers lives and saving them money. We look to our HR associates to
motivate and empower our 2.2 million associates, working to ensure that every single member of
our team feels uniquely fulfilled, challenged and capable of successfully accomplishing his or her
role in our day-to-day operations.

Business
Business
Environment
20

XZZV2121D
Walmart

SWOT Analysis
A SWOT analysis is a very powerful tool that can help a company uncover strengths, weaknesses,
opportunities, and threats that may not be obvious until the analysis is completed. The following is
the SWOT Analysis for Wal-Mart.
Strengths:

It is the world largest company in term of revenues.

It is well known for lowest cost products.
Walmart has the largest employee base.
The company covered most of the US market and having a huge market share.
Walmart offer variety of products in their stores.
Walmart is operating in 14 countries with 2,980 stores.
It sells 40% of private brands, which are produced through contracts with Manufactures.
High customer satisfaction
The SAMs Club customers are able to buy the products in bulk quantity and
Getting the advantage of low prices.
A Wal-Mart super store offers non-stop shopping for their customers.
Satisfaction guaranteed programs promoting customer goodwill
Buy from local merchants when possible
Stock ownership and profit sharing with employees

Weaknesses:

Business Environment

21

Walmart

The Corporation is huge but still has presence in only 14 countries.

Customers sometimes are curious about the quality of products.
Keep poor performance employees on hand.
The market share is low outside the US market.
Supplier profit margin is very low.

Opportunities:

Most of the International Market are untapped specially the Asian Countries.
Joint ventures to increase market share in international market.
The inflation in US market diverts the customer from buying expensive products towards cheap

products.
A lot of retail organizations are leaving out of business due to the drop in disposable incomes. This
can help Walmart by growing its customer base due to the bargains that it can provide its

customers.
Due to the cheap rate that the organization is able to buy its products from suppliers, it is able to
provide customers with even better bargains to give confidence them to shop at Walmart.

Threats:

Regulation of Wal-Mart pharmacies

Small towns do not want entry of Wal-Mart
Bad media exposure for Kathie Lee Brand
Variety of competition nationally, regionally and locally
Substitute products more easily because of intense competition
Wal-Mart is criticized several times by community groups.
The competitors are gaining control over International Market.
Being a worldwide retailer means that you are uncovered to political troubles in the
countries that you operate in.

Business
Business
Environment
22

XZZV2323D
Walmart

Walmarts Pestle Analysis:

Wal-Marts remote environment or macro-environment involves factors that determine the
companys success. These factors are best presented through the PESTEL/PESTLE analysis
model. As a retail industry leader, Wal-Mart continues to withstand the potential negative effects of
threats in the political, economic, sociocultural, technological, ecological and legal
(PESTEL/PESTLE) aspects of its business. However, this success requires continued evaluation of
the retail industry environment. These PESTEL/PESTLE factors also change over time, thereby
imposing challenges for Walmart. These changes may present threats or opportunities. Walmart
must exploit the opportunities and protect itself from threats. In using the PESTEL/PESTLE
analysis, Walmart leaders and managers can determine which factors to prioritize in strategy
development.
The external factors in the remote or macro-environment of Walmart, based on the
PESTEL/PESTLE analysis, indicate the need for strategic focus on economic, sociocultural and
ecological concerns.
Political Factors:
Walmart considers political factors in the retail market, usually pertaining to government policies.
In the PESTEL/PESTLE analysis model, politically active interest groups are also significant. The
following are the political external factors in Walmarts remote/macro environment:
1. High stability of politics (opportunity)
2. Political support for globalization (opportunity)
3. Political pressure for higher wages (threat)

Business Environment

23

Walmart

The remote/macro-environmental factors show that Walmart must address the threat of higher
wages. This is a threat because Walmart must minimize costs in applying its cost leadership
generic strategy.
Economic Factors:
Walmart is under significant pressure from economic changes. Any such change directly leads to
changes in the companys revenues. Based on the PESTEL/PESTLE analysis model, the following
are the economic external factors in Wal-Marts remote/macro environment:
1. Stability of major economies (opportunity)
2. Continued growth of developing countries (opportunity)
3. Decreasing unemployment in the United States (opportunity)
All of these economic factors show that Walmart should exploit opportunities around the world.
Emphasis should be on the fast-growing economies of developing countries, which have
increasing demand for goods from retail firms like Walmart.

Social/Sociocultural Factors:
The social or sociocultural factors in the business environment of Walmart influence consumer
perception and preferences. In the PESTEL/PESTLE analysis model, the following are the social
or sociocultural external factors in Wal-Marts remote/macro environment:
1. Healthy lifestyle trend (opportunity)
2. Cultural diversity trend (opportunity)
Both of these social/sociocultural factors present opportunities for Walmart. The company can
increase its array of healthful products. Walmart can also increase the variety of its products to
satisfy various cultural preferences.

Business
Business
Environment
24

XZZV2525D
Walmart

Technological Factors:
Walmart needs to address technological trends. In the context of the PESTEL/PESTLE analysis
model, technologies affect the retail industrys competitive landscape. The following are the
technological external factors in Wal-Marts remote/macro environment:
1. Increasing business automation (opportunity)
2. Business analytics or big data (opportunity)
3. Increasing mobile device usage among consumers (opportunity)
Walmart can increase its investment in all three factors. In exploiting the opportunity in mobile
device usage of customers, the company must boost its online presence. Online marketing and
selling can help increase Wal-Marts revenues.

Environmental Factors
The ecological or environmental factors significant in Wal-Marts business pertain to
environmental conservation concerns. Environmental conservation is now a popular principle. The
following are the ecological external factors in Wal-Marts remote/macro environment in the
PESTEL/PESTLE analysis model:
1. Business sustainability trend (opportunity)
2. Environmentally friendly products trend (opportunity)

Business Environment

25

Walmart

To attain business sustainability, Walmart must improve operational efficiency. Technological

innovation helps improve efficiency in business. Improved policies and standards on products sold
at its retail stores can also strengthen Walmart in addressing these ecological factors.

Legal Factors:
Walmart is subject to the requirements of laws and regulations. Based on the PESTEL/PESTLE
analysis model, these external factors usually impose limits on retail firms. The following are the
legal external factors in Wal-Marts remote/macro environment:
1. Food safety regulations (opportunity)
2. Employment regulations (opportunity)
3. Tax law reform (threat)
Tax reform is a potential threat if it leads to higher tax rates. Walmart must take food safety
regulations as an opportunity to improve quality standards. Also, enhancing Walmarts human
resource management practices can exploit opportunities concerning employment regulations.

Business
Business
Environment
26

XZZV2727D
Walmart

Conclusion
There are a few strategic issues faced by Walmart in deciding what should be its strategy in the
future and how it should be implemented. This includes formulating a global standard in order to
maximize customer satisfaction and also creating local plans to handle competition. The retail
industry is crowded with local, national and international players. Using the above-mentioned
strategies and methods and using further international expansions in the Asian market can resolve
these strategic issues.
Walmart has framed its business model around the core called customer. It has truly succeeded at
giving the customer the maximum possible value for money. Quality at reasonable prices has
ensured customer loyalty as well as volume of sales. Moreover it has constantly provided buyers'
incentives in the form of discounts and offers. This ensures more number of customers to Walmart
than any other retail store in the world.

Business Environment

27

Walmart

Recommendation
India is one of the largest growing retail industries and there is so much scope for new entrants in
this market. The increase number of buying power of Indian middle class opens doors for new
players to make the market attractive and profitable. If Wal-Mart use this planned strategy to make
entry in Indian market, it will help them to establish and make sustainable business. Indian retail
law does not allow multi-brand foreign retailers to sell directly to consumers So Walmart will have
to make 51:49 joint ventures with an Indian company who reputation is valued in the eyes of the
Indian citizens and also have a clean sheet in terms of political reputation, so as to enter in Indian
market. According to me Walmart must enter in Indian retail industry, there is so much scope for
such companies. Walmart competitive advantages matches to the Indian consumer, which is a
positive reason to enter in India. It will become milestone for Wal-Mart in South Asia.
Walmart should adopt strategies of reducing competition and handling it effectively through
product differentiation, manage risk effectively, and immune itself against economic mishaps,
expand internationally into developing markets, cut down or rationalize its costs and upgrade its
technology applications. These measures would help Walmart sustain as a market leader in the
long run or well into the future. These can help it survive and sustain in the long run.

Business
Business
Environment
28

XZZV2929D
Walmart

Bibliography

http://www.forbes.com/sites/walterloeb/2013/10/16/walmart-what-happened-in-india/
http://blogs.wsj.com/indiarealtime/2013/10/19/wal-mart-still-faces-challenges-in-india/
http://www.forbes.com/sites/meghabahree/2013/07/01/walmarts-troubles-continue-in-

india/
http://www.slideshare.net/pradeep_loganathan/globalization-strategy-walmart
http://careers.walmart.com/career-areas/corporate/human-resources/
U.S. Environmental Protection Agency (2015). Smart Steps to Sustainability 2.0.
U.S. Food and Drug Administration (2015). Retail Food Protection.
U.S. International Trade Administration (2015). Policy and Negotiations.
U.S. National Institute of Standards and Technology (2015). A Guide to Retail Pricing

Laws and Regulations.

Wal-Mart Stores, Inc. (2015). Walmart Form 10-K, 2015.
Wal-Mart Stores, Inc. (2015). Walmarts Official E-commerce Website.
http://panmore.com/walmart-pestel-analysis-recommendations-case-study
https://stevenmaver.wordpress.com/2012/11/20/wal-mart-an-industry-star/
http://www.slideshare.net/redwan999/operation-management-for-walmart

Business Environment

29

Walmart

Business
Business
Environment
30