Consumer Analysis for Walmarts India Strategy

Consumer Analysis for Walmarts India Strategy

Walmart’s India strategy is relatively different from that adopted in other countries. The difference is due to the business environment in India, which is characterized by barriers to entry and foreign investment policies. Perhaps, this explains why Walmart has to rely on the Flipkart acquisition to penetrate the Indian market. One way Walmart has benefited from the acquisition is through Flipkart’s wealth of information regarding online shoppers in India (Bhaskaran & Bandookwala, 2020). This information fits into the strategic plan for growing and expanding both local and international markets. The data allows Walmart to study and understand consumer trends and serve them based on their best interest. Some trends observed through the data acquired include spending by specific age demographics and products receiving major sales through online sales. Further, such information helps the company maintain its competitive strategy of leading every sector because it helps increase sales.

Cultural differences influence Walmart’s strategy in India. Notably, consumer behavior and preferences are shaped by their culture. Further, the culture of the people in India is significantly different from the one in other countries where Walmart operates. For instance, customers in the US do not consider the layout of stores as an important factor in buying goods. However, in Indian culture, the buyer experience, including store layout, influences purchases. According to Hunt et al. (2018), Walmart’s strategy has been slow because of attempting to locate its business in areas where it can adopt a layout preferred by the Indian market. When this is considered based on Porter’s five forces, it indicates that Walmart faces a higher bargaining power of buyers (Burbach, 2021). The strength of this force is so high that Walmart has to reconsider its strategy in India. However, with the other four forces, the company can handle them effectively, just like in other non-Indian markets.

References

Bhaskaran, P. B., & Bandookwala, N. (2020). Walmart’s Acquisition of Flipkart: Emerging a Paradigm of the Digital Era. South Asian Journal of Business and Management Cases, 9(1), 24-39.

Hunt, I., Watts, A., & Bryant, S. K. (2018). Walmart’s international expansion: Successes and miscalculations. Journal of Business Strategy. https://doi.org/10.1108/JBS-02-2017-0013

Burbach, C. (2021). Walmart Strategic Analysis. https://digitalcommons.unl.edu/honorstheses/382

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 In 2018, Walmart implemented a joint venture strategy in India by acquiring most shares in the country’s dominant online retailer, Flipkart. Paying $16 billion made this the world’s largest-ever e-commerce acquisition.

Consumer Analysis for Walmarts India Strategy

In 2020, this partnership expanded and is estimated to reach $200 billion by 2027. As part of its strategic plan, Walmart focuses on entering global markets representing high-growth opportunities and exiting or reducing its presence where growth is less evident. Since consumer markets are unique to each country, this part of Walmart’s strategy requires a detailed analysis of the markets it targets for entry.

Instructions

Use course content and outside research on market/consumer analysis tools to discuss the following:

Flipkart is India’s largest online retailer, which means it has a wealth of information on its online shoppers that can be used to analyze the market potential for Walmart’s e-commerce offerings. How does using detailed consumer information fit into Walmart’s strategic plan?

Is the strategic plan impacted by cultural differences and/or typical household composition in India? Discuss.

How does this reflect Porter’s Five Forces Model?