Walmart from China to India Case Solution

1. After reading the case, consider the history of Walmart in the United States. How did the company develop its leading position in its home market? How did their capabilities evolve over time? For this question, feel free to seek out information beyond the case (just for their  historic success in the US).

Walmart, since its early days, has focused on a clear and unique selling proposition, which was everyday low prices. In order to provide its customers with a unique offering, the company had to leverage its strategy at multiple fronts such as distribution & logistics, procurement, lean operation, corporate strategy, marketing, availability of goods, relationship with suppliers, information technology, etc. (Parnell & Lester, 2008). Walmart always had thin margins due to its low price strategy; therefore, it was obvious that the high volume would be the goal. However, to ensure that the same strategy is not replicated by any of its competitors, the company had to constantly improve its operation by taking measures, which were unprecedented in the retail industry. Today, Walmart is the largest retail chain, in the world but to achieve this milestone, the company had to evolve its capabilities over time. For instance, in 1980s, it moved towards Vendor Managed Inventory system allowing smoother flow of inventory; low overhead cost in terms of utility as well as, human resource; leveraging its strong negotiation power against suppliers; expansion in international markets, etc. (Soderquist, 2005).

2. What do you make of the long-term lack of profitability for Walmart China? Should this inform the decisions being considered in India? Why or why not?

As apparent from the above CAGE Distance Framework that there is a considerable difference in two countries. Though, the top management had an idea about these socio-cultural and politico-economic differences but they were not informed about their gravity and its implications, which is why it took longer than usual for them to turn positive. However, the company has learnt its lesson from its experience in China, which is why it is in a better position to formulate strategies and adopt policies so as to succeed in the Indian market. In addition to this, it already has a joint venture with Bharti Enterprises, which has not proven to be entirely profitable as yet, but has given them an insight of Indian market.