Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :BSM0063

Year : 2009

Industry : Services

Region : India

Teaching Note:Available

Structured Assignment :Available

Abstract: India had become an alluring destination for the foreign retailers and Indian conglomerates alike. While large Indian conglomerates easily start their own retailing arm, lack of expertise and supply chain woes trouble them continuously. Moreover, most of the domestic players need much funding for their operations and expansion. The only solution is allowing Foreign Direct Investment (FDI) in the retail sector. But, India's strict regulations against allowing FDI in retail sector prevent the entry of the foreign retailers to the country. However, with recent developments, 100% FDI is allowed in wholesale cash and carry business and many of the global retailers are finding an opportunity to enter a potential market. To reduce the risk of being in a new territory, most of the foreign companies are trying to tie up with an Indian company to start their business in India. World's largest retailer, Walmart was not left behind in the competition and decided to use the new found opportunity efficiently. It is the first foreign retail company to enter India after 100% FDI has been allowed in the wholesale sector. Partnering with India's Bharti Enterprises, a telecom giant who aims to be a business conglomerate, Walmart's entry to the subcontinent was in style. However, the biggest retailer Walmart's entry to the wholesale business, a completely different game from its favourite retail and Bharti's lack of experience is of course, a matter of concern.

This case study would help in analysing the attempts of foreign retailers to enter the land of opportunities through different strategies, even when regulations regarding FDI restrict their moves. Apart from that the case gives an overview of the two partners, Bharti Enterprises and Walmart. Analysing the future prospects and challenges of the joint venture (JV) between the two organizations, the case discusses the sustainability of the JV.