Wal-Mart and Multi-Brand Retailing in India - Assignment Example

?Wal-Mart and Multi-brand Retailing in India Discovering new markets and designing new products have always been like adventures. It involves risks that can even jeopardize a firm’s existence. On the other hand, it involves potential returns that can take the firm to newer heights. After the Global Financial Crisis of 2008, the consumer demand in the developed world has remained tepid for a long time. At this situation the global growth is being mainly driven by the emerging markets. Among the emerging markets, while China has a good investment story, India has a good consumption story. Here in this paper, we will look at the possible strategies and their implications for starting a multi brand retail chain in India from the perspective of retail giant, Wal-Mart’s. It is necessary to mention here that the Indian Parliament has not given green signal to foreign investment in multi-brand retail. Wal-Mart has existence in India via the joint venture Bharti Wal-Mart Private Limited. Bharti Enterprises is one of India’s foremost production houses. In the context of this contract, Bharti and Wal-Mart possess ‘50:50 stakes’ in Bharti Wal-Mart Private Limited. It is setting up wholesale cash-and-carry provisions and back-end supply chain administration systems to be at par with Government of India rules. The ‘first Wholesale Cash-and-carry facility named "Best Price Modern Wholesale" opened in Amritsar in May 2009 and subsequently in Zirakpur (near Chandigarh), Jalandhar, Kota, Bhopal, Ludhiana, Raipur, Indore, Vijaywada, Meerut, Agra, Lucknow, Jammu, Guntur, Aurangabad, Bathinda and Amravati’ (Bharti Wal-Mart, 2012). Emerging Market Potential Emerging economies have turned into attractive sites for businesses in recent years. The current economic policies have favorable climates for foreign investments. There are several reasons for overlooking trade with developing countries in the past. In the past market potential in those countries was too small for targeted marketing efforts. The selling costs were considerably high. The market structure was also very unstable. It made the demand estimation a difficult job. The non-commodity type imports of developing countries were job orders which required special planning and customized production. Also, the process of reaching agreements with emerging market customers was ‘cumbersome and lengthy’. At the same time, there was not much information about the market potential and associated strategies for the emerging markets (Cavusgil et al. 2002, pp.17-18). Diffusion of skills, processes, and technologies throughout the global markets resulted in a convergence. The difference between budding markets and the industrial economies is narrowing. The forecast potential of these markets is increasing (Khanna & Palepu, 2010, p.13). Now the market potential is no longer too small for marketing efforts. Many emerging economies are investing in transportation, power, and communication infrastructure. Also the modern management techniques and close working relationship with foreign counterparties have helped to bring down the cost of sales. Though there are inter-cultural differences, managers have realized the value of a global ‘win-win’ relationship (Cavusgil et al. 2002, pp.18-19). The opportunities connected with low-income markets are becoming gradually more obvious to both scholars and managers. There is evidently more than meets the eye when considering customers with annual purchasing power parity (PPP) of $1500 or less (Prahalad & Hart, 2002, p.2). A vast majority of people work chiefly in the big, unseen, informal economies. These are not reflected in official gross national product or purchasing power parity statistics. Across the globe, it has been expected that the unofficial sector comprises more than $9 trillion in unregistered assets. The value of economic transactions in these sectors may even surpass that has been recorded for the formal economic sectors (London & Hart, 2004, p.2). The superiority and extent of the obtainable product and services at the bottom of the pyramid is generally low. This massive market has remained mostly invisible to the corporate sector. One interesting observation is that this market is wide open for technological innovation. Here the multinational companies can be leaders in providing environmentally ethical products. The United Sates with only 4 percent of world population consumes more than 25 percent of planet’s energy sources. Trying to build such model for the emerging economies, especially for people living at the bottom of the pyramid will be catastrophic (Prahalad & Hart, 2002, p.4). Entry Strategies for Emerging Markets To enter in any market, a firm needs a strategy. The obstacles to successful entry into emerging markets are dissimilarities in the economic environment infrastructure, level of technology, and the political, legal, and cultural environment. Western companies face such dissimilarities at the different levels. At the global level, firms investigate international agreements, communication and relationship. At macro level, bilateral agreements and relationship between the two countries are investigated. Steps for realization of a successful market entry are considered at the micro level. An entry strategy depends on the promise and size of the market, the business environment in the market, managerial understanding of the market, internationalization objectives, product market fit, the level of asset commitment for the target market, and the nature of competition in the target market (Cavusgil et al. 2002, p.89). Firms venturing into international business have three broader routes. The first one is export entry modes which include indirect and direct exporting. The second entry mode is contractual entry mode that includes licensing, franchising, technology transfer, countertrade, counter purchase, buyback, offset, clearing, management contracts, contract manufacturing or subcontracting, turnkey projects, and infrastructural projects. The third entry mode is the investment way like marketing subsidiary, joint ventures, and foreign direct investments (Cavusgil et al. 2002, pp.89-90). Indirect exporting involves the use of indirect channels which are basically domestic intermediaries. This places the burden of responsibility for sales contacts, negotiations, and product delivery on the intermediary. At the early stages of exporting, cost of penetrating the market is very high. In case of indirect exporting, it is borne by the intermediary. However, there is an opportunity cost. Here, the intermediary has the final pricing power. So a loss of profit is expected. In case of direct exporting it is done through overseas intermediaries. This strategy gives partial or full control over the foreign marketing plan. The feedback from the market is quicker. The manufacturer can protect the trademarks, patent and goodwill in a more effective manner (Cavusgil et al. 2002, p.92). Here the initial costs are higher due to greater information requirements and higher costs. In contractual entry mode, the domestic firm makes insubstantial possessions, such as patents, trade secrets, knowledge, trademarks, and company name available to the foreign firm. The domestic firm gets a royalty type of payment for this consideration. Licensing is advantageous in some ways. It is a quick and easy mode to enter into a particular market. Royalty incomes are guaranteed and periodic. The domestic firm needs not to commit substantial amount of resources and in some countries, licensing is the only entry route. There are some disadvantages as well. The domestic firm needs to have attractive technology or trademark. Otherwise, foreign firms may not be interested. The domestic firm lacks control over the marketing plan and production processes and there is a possibility that some day the foreign firm will be a potential competitor. The absolute size of the royalty can be very small compared to the potential market. The biggest trouble is that the contract gives exclusive rights to the foreign firm for some period of time. The domestic firm cannot use other routes to enter the market until the contract expires (Cavusgil et al. 2002, pp.93-94). Franchising is another form of licensing where the company licenses a business system as well as other property rights to an independent company. This type of entry mode is advantageous in case of rapid expansion with low capital outlays. The marketing procedure is standardized. The disadvantages are total decontrol of franchisee’s operations and thereby limitation on franchiser’s profit. Franchising is particularly beneficial when company has a product that can be easily produced but cannot be exported to the foreign market due to some non-legal issues (Cavusgil et al. 2002, p.94). The other form of entry is through countertrade. It refers to a transaction where the exporters and importers exchange goods and services in addition to or in place of financial settlements. It is considered an excellent tool to gain entry into a new market when the products face strong international competition (Cavusgil et al. 2002, pp.96-97). Other forms of entries involve counter purchase, buyback, offset, clearing, etc. Turnkey projects are contracts for constructing operating facilities which at the time of commencement of the operations are transferred to the foreign owner. The same is true for infrastructural projects (Cavusgil et al. 2002, pp.99-100). There are also several modes for the entry through investment. The first is setting up a marketing subsidiary. Marketing subsidiary is a very good entry mode in case of technology intensive products where spin-off sales generated by spare parts. The firm must look for sourcing niches to gain competitive advantage (Cavusgil et al. 2002, p.100). Joint ventures are special investment vehicles where equity is owned by two or more companies. Joint ventures mean sharing both capital and risk and at the same time making use of each other’s strength. Problems generally appear when more than one party is involved in the decision making process (Cavusgil et al. 2002, p.100). The most significant way of entering into a market is through foreign direct investment (FDI). In a modern set up, large companies can afford to go for FDI. Direct investment may provide lower costs, marketing advantage due to local preferences and purchasing power. However, FDI requires substantially more capital, management and other resources (Cavusgil et al. 2002, p.101). So far we have discussed the formats of entering into a new market. Now let us focus on some marketing strategies. Generally the western companies try to replicate the model of the domestic country. But business is not always that simple. For example, the U.S. ‘cereals giant, Kellogg’, ventured into India in the mid-1990s. The company was attracted by the hope of one billion breakfast consumers. But the sales are not that impressive after years of operation. In India, most consumers prepare their breakfast from the scrape every morning. Advertising positions that are common in the west, such as the convenience of breakfast cereal, did not vibrate with the mass market. Sections of the market that did locate the convenience positioning demanding were not capable to pay for the international prices of Kellogg’s brands. After years of experience, the company launched a 50 gram pack of breakfast biscuit priced at rupees 5 under the brand name ‘Chocos’ (Dawar & Chattopadhyay, 2000, p.1). There is a rising understanding that the billions of customers have not responded to the multinationals’ invitation; that local competitors are tougher than anticipated. Competition for the top segment of the market is severe, as main players from around the globe struggle for the same narrow market. Local operations now realize one thing. The three to five percent of consumers in emerging markets with global preferences and purchasing power no longer is sufficient as the only target market. As a substitute, they must look into deeper into the local consumer base to tap into billion-consumer markets. This calls for a shift in importance from the “global” to the “local” customer (Dawar & Chattopadhyay, 2000, p.2). One may find it counter intuitive to globalization. But the business reality demands such move. There are some other business realities about these emerging markets. One of them is that consumers have an aversion to products that develop too fast Rapid evolution makes the recent buys outdated. People like basic, functional, long lasting products. For example, The Volkswagen Beetle was the popular business making car in Brazil long after being phased out of the developed markets and regardless of competitive assaults by other makers with newer models. The largest selling car in China has been the Volkswagen Santana. The model was phased out of developed markets years ago. These cars are recognized as dependable workhorses and can be easily fixed when they collapse. The spare parts are readily obtainable and reasonably priced, too (Dawar & Chattopadhyay, 2000, p.5). There is a common assumption that high savings rates in emerging markets stem from the lack of purchase options and as the firms provide options to a consumer, savings will be spent on consumption. Though this is true to some extent, the rate of conversion from savings to consumption has been slow. Instances of high savings are due to shortfall in unemployment insurance, retirement and disability reimbursement, etc. These social and family commitments for savings are often driven by strong cultural standards. Consumption choices do not simply compete with these motives for saving (Dawar & Chattopadhyay, 2000, p.7). In the emerging markets, policies that support ‘thin margins’ and ‘large volumes’ generally do well. Pricing reason governs the marketing programs and influences the product, packaging, distribution, and communication decisions. For example, Unilever’s Lifebuoy brand of soap, accepted in Africa, India, and Indonesia is priced low and made with reasonably priced local components and wrapping material. Lifebuoy is the major selling variety of soap in terms of quantity (Dawar & Chattopadhyay, 2000, p.7). Another interesting observation about the emerging markets is that the recommendation of the shop owner carries a lot of weight. Typical structures of the stores do not permit the buyers to select by browsing through the items. The owner’s connection with clients is based on an understanding of their wants and buying habits, and cemented by the retailer extending credit (Dawar & Chattopadhyay, 2000, p.9). One may conclude this section by throwing some light into the role of institutions in the emerging market. Organizations have an indispensable function in a market based economy. They support the effective functioning of the market mechanism so that firms and individuals can engage in market dealings without undergoing undue costs or risks. The legal framework and its enforcement, property rights, information systems, and regulatory regimes are the examples of institutions. Institutions also provide information regarding business partners and their probable actions. This reduces information asymmetries which is a central origin of market failure. The intensification of the institutional structure thus reduces costs of doing trade and influences the mode of entry. So the relative costs linked with diverse modes of entry are subjected to the institutional framework of the country (Meyer et al. 2008, pp.6-8). Foreign Direct Investment and the Indian Retail Sector The retail sector plays a very important role in Indian Economy. About 40 percent of the country’s total GDP of USD 1 trillion comes from retail sales to Indian consumers. The local, one-off corner stores account for more than 94 percent of this total retail sales of around USD 400 billion (KPMG, 2010, p. 1). In 1997, the retail industry of the nation was liberated for foreign direct investment (FDI) with 100% FDI being allowed in ‘cash & carry’ extensive business under the government endorsement way and was then brought under the regular route in 2006. As a proceeding measure, FDI in ‘single brand retail’ was allowable to the point of 51% in 2006, and FDI in ‘multi-brand retail’ was banned till newly (Ghosh at al. 2011, p.1). FDI inflows of nearly USD 1.8 billion were received in the ‘cash & carry’ sector. This comprised 1.54 percent of the entire FDI streams received during the time. For single brand retail, a total of 94 proposals came till May 2010, and out of them 57 proposals were accepted. An FDI inflow of nearly USD 194 million was received between April 2006 and March 2010, comprising 0.21 percent of the total FDI inflows during the period, under the category of single brand retailing (KPMG, 2010, p. 1). There are a few foremost limitations of the Indian retail industry. There occurred a need for funds in the logistics segment of retail system. This has led to an inefficient market mechanism. India possesses only ‘5386 stand-alone cold storage’ with total facility of 23.6 million MT. 80% of this capacity is applied in case of potatoes. Shortage of sufficient storage amenities has led to serious losses to farmers in terms of depletion in excellence and measure of produce. Following some estimates, ‘25-30 percent of fruits and vegetables’ and ‘5-7 percent of food grains’ in India are worn out The second big limitation is the presence of intermediaries in the entire value chain. There is no clear norm and the pricing lacks transparency. According to a study commissioned by the World Bank, a farmer receives around 12–15 percent of the price the consumer pays at a retail outlet for a typical horticulture product (KPMG, 2010, p. 1). Considering these facts, FDI in retail is the urgent need. Though FDI is allowed in cold-chain to the degree of 100 percent, through the ‘automatic route’; in the nonattendance of FDI in retailing, FDI flow to the segment has not been important. There are a few political compulsions for not permitting FDI in multi-brand retailing. In 2007- 08, retail trade employed 7.2 percent of gross workforce and supplied job openings to 33.1 million persons. The main fear is that FDI in multi-brand retail will push this unorganized sector to an unfair competition and it will lead to mass unemployment. The other problem is that the organized retail sector in India is still in its nascent phase. So letting the multinationals invest in this sector may lead to premature death of the domestic industry (KPMG, 2010, p. 2). Despite all these factors, no one can deny the importance of FDI in this sector. Other emerging economies like Thailand allow 100 percent foreign equity, with no limit on the number of outlets. Entry of the foreign players had led to the development of prearranged retailing and Thailand has turned into a vital shopping target. China allowed FDI in retail sector till 49 percent in 1992 and limited it to ‘six provinces and SEZs’. Subsequent to its progression to WTO, the foreign ownership limitations were removed with effect from December 2004. There are no equity limitations from that time. Apart from Thailand and China, FDI is permitted in the retail sector in “Brazil, Argentina, Singapore and Indonesia without limits on equity participation” (KPMG, 2010, p. 2). Technological, organizational, and institutional change in the procurement systems of supermarkets in the emerging-market countries of the Pacific Rim are main deciding factors for transformations in the markets that farmers face (Reardon et al. 2005, p.5). So India will gradually open up the multi-brand retailing for FDI. Now, it is only a matter of time. Wal-Mart Business Model Wal-Mart Stores, Inc., (NYSE: WMT) comprise above 10,130 retail stores with 69 special banners in 27 economies. In the year 2012 the company posted revenues of roughly $444 billion. Wal-Mart employs 2.2 million connections worldwide (Wal-Mart, 2012). The value scheme of Wal-Mart is based on offering ‘Everyday Low Price (EDPL)’. The key features of Wal-Mart are aligned to keep the prices low. This proposition means that customers do not have to wait for best deal. Wal-Mart provides the convenience of choosing from a wide range of products and services. At the same time it is possible to make all the shopping needed, from groceries to pharmacy. Thus precious time and money are saved (LI, 2011, p.94). The distribution channel of the company mainly includes thousands of stores and web portal. These are owned and direct, and bring higher margin. The company tends to reach to the mass market through mass customization. The consumers can be divided into three broader groups. The first group contains people, who have low income but are obsessed with brand. The second group includes wealthier shoppers who love deals and the final group has people who cannot afford high price (LI, 2011, p.94). The strategic activities of the company include purchase and delivery of goods, and total cost control. The organization also creates products for catering specific customer segments. Recently the company is trying to develop some strong in house brands. Wal-Mart has technological edge in its inventory control, logistics, and distributions (LI, 2011, p.94). The cost of distribution and storage is a big part of the product’s selling price. Thus, Wal-Mart handles 80% of the purchases that are directly shipped in the warehouse in order to reduce the cost of logistics. According to the Wal-Mart logistic factsheet, the organization has 85,000 associates, 147 distribution centers, 51 transportation offices, 7,200 tractors, 53,000 trailers, and 7,950 drivers in the US. A Wal-Mart grocery distribution center is equipped to house up to four million bananas at one time. Ice cream freezers at a grocery DC are cooled to -20 degrees Fahrenheit. Wal-Mart has nine ‘disaster distribution centers’ methodically situated across the country. These centers are stocked with relief supplies needed to assist communities recover in the event of a disaster (Logistic Factsheet, 2009). The key resources of Wal-Mart can be divided into 3 parts. The physical resources like stores and logistics are owned by the company. The second resource is its manpower and the third one is the company culture. Wal-Mart culture originates in endless attempts at steady self-improvement, regulation and devotion. The main partners of Wal-Mart are its suppliers. It provides suppliers the chance of accessing to a large market. At the same time, it made the suppliers to keep their prices low (LI, 2011, p.94). Wal-Mart’s revenue streams come from retail sale, such as music downloading with fixed menu pricing. The Cost structure is marked by economies of scale. Its technology helps it to grow and lower its costs. Economies of scale at both the chain levels and stores have strengthened Wal-Mart’s advantage (LI, 2011, p.94). Wal-Mart’s China Strategy Wal-Mart’s China strategy is relevant to our discussion as we are considering Wal-Mart’s India strategy into multi-brand retail. The retail industry scenario both in India and China are basically similar. Wal-Mart formed a joint venture with Shenzhen International Trust & Investment Co., Ltd, China, and followed government regulations strictly. Wal-Mart also has been functioning with universities and government to help endorse improved guidance and education for China’s escalating retail economy. In November 2004, Wal-Mart donated USD 1 billion to Tsinghua University to establish China’s first ever organization for vending research. In November 2006, Wal-Mart functions 67 units across China with high focus in the more urbanized areas of southern and eastern regions. At that time, it employed 36,000 people. China’s richest city - Shenzhen has alone 12 Wal-Mart stores (Gereffi, & Ong, 2007, p.47). As a part of expansion plan Wal-Mart acquired the Taiwanese retailer Trust-mart for USD 1 billion. Trust-mart operates 108 shops and has above 30,000 workers in around 20 regions all over China. Wal-Mart gained an advantage with this acquisition over Carrefour, Tesco, and Metro (Gereffi, & Ong, 2007, pp.47-48). On the logistics and supply chain front, China remains as a central position for channeling the goods which are then sold worldwide. Wal-Mart’s Global Procurement Center shifted from Hong Kong to Shenzhen in the year 2002. The retailer is also trying to expand its supplier network into northern and eastern China. Another possible procurement center for the future can be Shanghai. The operation in China involves 15,000 suppliers. 95% of the commodities transacted in China are channeled locally. Wal-Mart has a tough bargaining power. It instructs its suppliers regarding the production methods of the goods from product requirement to wrapping and how much revenues they would be getting. It has embedded this strategy into China’s marketable society (Gereffi, & Ong, 2007, p.48). In China, Wal-Mart is yet to achieve the supply chain efficiency that is prevalent in the United States. There are three reasons: infrastructural bottlenecks, attitudinal problems of local suppliers, and lack of scale. These three problems will remain as the company forays into Multi-brand retailing in India (Gereffi, & Ong, 2007, p.48). Wal-Mart’s India Strategy As mentioned earlier, Wal-Mart is present in India through Bharti Wal-Mart’s ‘cash & carry’ business. They are doing this business under the brand name ‘Best Price Modern Wholesale’. They offer over 5,000 items under one roof. The categories include snacks & hot beverages, packaged food, confectionery, dry fruits, spices, household items, restaurant supplies, hair & personal care, detergent & cleaning aids, luggage, apparel & footwear, office supplies & stationery, and electronics & household appliances. The sourcing is done through local and regional sourcing teams. There are also special pack sizes for the customers from the hotel, restaurant, caterer and offices & institutions (Bharti Wal-Mart, 2012). The ‘cash & carry’ model is specially designed to help the small grocery stores, also known as ‘Kirana’ in Hindi. Wal-Mart provides special benefits to the store owners who are the members of ‘Best Price Wholesale Stores’. There is a huge market to tap in this segment. There are about 12 million kirana stores in India and around 90% of these stores are not served by the FMCG majors. Wal-Mart offers them these quality products at lowest possible prices. Wal-Mart is helping the kirana stores to manage the inventory in a better manner. Wal-Mart is trying to act as a strategic warehouse for these small stores (Bharti Wal-Mart, 2012). At the same time, Wal-Mart is trying to educate the kirana store owners about assortment planning, hygiene, in-store displays, inventory management, value added services through innovative kirana model ‘My Kirana’. Also the company is helping the members in taxation, food preparation, and food safety. The company has introduced category workshops for different target segments (Bharti Wal-Mart, 2012). The market opportunity in India is huge. Indian family expenditure on food is one of the maximum in the world with 48% of proceeds allocated to ‘food and grocery’. This sector shows huge unexploited potential as industrialization, consumerism and approval to modern retail grows. Recent data shows that demand for readymade and western outfits is growing at 40-45% annually. Here the critical success factors are to deliver affordable and accessible fashion, and provide value added services to sustain consumers (Deloitte, 2011, p.7). The pharmacy retailing is dominated by the local chemists. The modern retailer has the opportunity to shift from ‘pure-play’ pharmacy to ‘health and beauty care’. The current market size of consumer durables, which consists of consumer appliances and consumer electronics, is USD 6.5 billion and is estimated to grow at a CAGR of 18%. Furniture and furnishing has recently witnessed a move. The modern retailers are setting up home furnishing sections in hypermarkets or starting up specialty stores in spite of the fact that this category faces stiff competition from small traditional retailers as well as individual carpenters & furnishers (Deloitte, 2011, p.7). There is a first mover’s advantage in the Indian market. Indian consumers tend to believe in long term sustainable relationship. More than 72 per cent of India’s population resides in small towns and rural areas with agro-produce retailing forming the largest share of total retail pie in these regions. Players like Reliance Retail, Aditya Birla Nuvo Group’s Trinethra Supermarket etc. possess rapid plans to make use of prospects in these rising economies in appropriate structures. Players who have already established their presence in the top metros of the nation are already setting up their firms in these emerging regions to add the ‘first-mover advantage’ over other firms (Ernst & Young, 2007, p.22). There is no doubt that Wal-Mart will lag behind these local players. India is a very competitive market and later entry can prove costly for the company. This pattern has been seen in the telecom industry as well. Since there is regulatory hurdle, for the time being, Wal-Mart can spread its ‘cash & carry’ model to a pan India level as quickly as possible. Otherwise, the company will lose a lot of important suppliers. In case of huge time lag, the company will have no other option but to buy some retail chains with good network. India has few innovative retail formats that are unheard of in the west. One such format is ‘Wedding Malls’. They stock the complete range of wedding product offerings from apparel to jewelry. Wal-Mart has to blend the experience from the global retail industry with the unique requirements and preference of the Indian consumer. There is a need to bring a great deal of innovation in the product offering and business format (Ernst & Young, 2007, pp.22-23). Social Impact of Wal-Mart Wal-Mart has a lot of controversies surrounding its business model. In 2006, Wal-Mart imported goods of amount USD27 billion into U.S. from China. Wal-Mart is responsible for 11% growth in U.S. trade deficit with China between 2001 and 2006. Nearly 200,000 U.S. jobs were eliminated due to Wal-Mart’s China sourcing policy (Scott, R.E. 2007). The company has also problems related to labor issues. A UC Berkeley Labor Center research shows that low wages forced the employees to accept USD 32 million annually in health related services and USD 54 million in other assistance from the state. The other assistance includes subsidized school lunches, food stamps and subsidized housing (Raine, 2004). Other allegations include killing of small business, suppressing the suppliers, etc. In case of populous countries like India, such instances can seriously jeopardize company’s operation. Prevalence of traditional retailing is highly pronounced in small towns and cities with primary presence of neighborhood “kirana (small grocery stores)”, push-cart vendors, “melas (various kinds of fairs)” and “mandis (commodity shopping place)” (Ernst & Young, 2007, p. 3). These political masses have a strong control over the law and order in such countries. In 2007, two retail outlets of Reliance Fresh – India’s leading grocery chain – were ransacked by a trader’s organization at Lucknow and Varanasi (Business Standard, 2007). This event happened only as a result of the fear that entry of such big companies into retailing would kill the small retailers. Such sensitivity should be kept in mind while framing strategies for India. Conclusion Emerging markets provide a wide range of opportunities. The western companies should strategically consider the best possible entry mode into these markets. At the same time, companies should think on the appropriate business model for these parts of the world. A US type model is basically impossible for these markets. For Wal-Mart, India provides a great opportunity. Wal-Mart can leverage their experience from other emerging markets like, China. 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