Wal-Mart considers the strategic decision of buying stake in the Indian firm Flipkart. Flipkart is the market leader of the e-commerce market of India with 44% of the total market share.[i] Flipkart is a leading retailer in India. Considering this decision, there are certain benefits that Flipkart will achieve of this action in terms of marketing strategies. Flipkart may be able to attract below-the-line promotions by the decision. They may also cut competition with the rival firm, Amazon. As more and more consumers are being tapped on by this planning of Wal-Mart by the spreading news. This is also a good way for Wal-Mart to promote themselves in India. They have been trying to enter since some time now.[ii] Yet they are not able to do this provided by the strict policies of discouraging international retail firms to operate in India( such as the ‘Make In India’).
Supplying goods at a cheaper rate and home service convince is a value proposition for this business. Along with this providing greater variety of good and services sold online. Another value proposition followed that attracts mainly Indian customers is the low costs of products that attracts mainly customers. With an increase in investment Flipkart may able to lower the cost even more to attract more customers. This may further increase their market share of 44%. There will also be an expansion in the customer segments.[iii] Walmart is an internationally recognized brand and customers may get attracted to buying from Flipkart knowing that there is potential advantages of buying from the firm as it may know share the key values of Walmart.
The operations of the business may also work better as there may be an enhanced product portfolio by which may be supported by Walmart. Also data and sales forecasting might be better off as there is will more research and data available by Walmart for Flipkart. Thus working in synergy may give both the firms potential advantages such as getting more customers, better forecasting, economies of scale and etc. provided by working in synergy thus it is recommended for the firm to engage into this action even if incurs cost yet in long run it may prove advantageous.
Source -N.p., n.d. Web. 1 Oct. 2016. <http://www.flipkart.com/about-us>.
Word Count-450
References
[i] “Wal-Mart in Talks to Buy Stake in Indian Online Retailer Flipkart: Report.” N.p., n.d. Web. 1 Oct. 2016. <http://www.cnbc.com/2016/09/29/wal-mart-in-talks-to-buy-stake-in-indian-online-retailer-flipkart-report.html>.
N.p., n.d. Web. 1 Oct. 2016. <http://www.flipkart.com/about-us>.
[ii] “Can Walmart and Flipkart Help Each Other in India?” Techcirclein India Startups Internet Mobile Ecommerce Software Online Businesses Technology Venture Capital Angel Seed Funding Can Walmart and Flipkart Help Each Other in India Comments. N.p., 17 Aug. 2016. Web. 02 Oct. 2016. <http://techcircle.vccircle.com/2016/08/16/can-walmart-and-flipkart-help-each-other-in-india/>.
[iii] “List of Assets Owned by Walmart.” Wikipedia. Wikimedia Foundation, n.d. Web. 02 Oct. 2016. <https://en.wikipedia.org/wiki/List_of_assets_owned_by_Walmart>.
v@thehimalayan. “‘Look into Constraints for Foreign Investment'” The Himalayan Times. N.p., 20 Sept. 2016. Web. 02 Oct. 2016. <http://thehimalayantimes.com/business/look-constraints-foreign-investment/>.
