analisys of a business article

According to a recent article in Forbes magazine , Wal-mart and Bharti enterprises are in final talks to setting up a joint retail venture in India . If plans push through , this would mean an entry by the large American retailer into India 's 300 billion market which has been long delayed because of numerous restrictions . Wal-mart 's entry into the Indian market is propitious as it has been increasingly sourcing its produce for its international operations from India . In 2006 , it bought 600 million worth of produce directly from Indian suppliers , up from the

previous year 's 400 million . This aside from the fact that its main rivals , France 's Carrefour and Britain 's Tesco are preparing to enter the Indian market too

This plan also fits the proposed expansion of Bharti to set up more supermarkets , hypermarkets and small retail chains in different Indian cities over the next eight years . Bharti is also making a survey to determine if it is suitable to use the Wal-Mart name for the joint venture

The deal itself would be in accordance with government guidelines with Bharti managing the front end of the retail business and Wal-mart providing back-end support for logistics and supply chain . Wal-mart which is known all over for its highly efficient supply chain , wants to make use of said advantage to assist Indian farmers in selling their produce to the markets and prevent wastage due to inadequate storage and transportation facilities

But protests by a coalition of labor unions , trade groups and nongovernmental organizations continue to hound the venture . 97 of India ' retail market is made up of small operators , who will oppose any market entry by a large international retailer like Wal-mart (David 2007

For Wal-mart , the importance of gaining a foothold into an emerging market like India cannot be denied , especially when its international business is getting to be so profitable . Annualized international sales for last year was 77 .1 billion or a 30 .2 increase over the previous year . Operating profit was 4 .2 billion , an increase of 21 .5 percent compared to the previous fiscal year (Wal-Mart , 2007 ) Entry into the Indian market is therefore important for Wal-mart if it wishes to maintain its leading global status . According to recent research India 's vast middle class and its almost untapped retail industry are key attractions . While organised retail in India is only two per cent of the cent annually , driven by changing lifestyles , strong income growth and favourable demographic patterns (India Brand Equity Foundation , 2006 )The joint venture with Bharti in a way makes things easier for a foreign retailer like Wal-mart to enter the market and obtain a large market share ahead of its competitors like Carrefour and Tesco . It can take advantage of the reputation and stability of the domestic partner , its familiarity with the regulations and the opportunities and threats within the market as well as capitalize on already existing assets or resources , such as locations , personnel , suppliers , etc . Bharti Enterprises fits the...