Wal-Mart, which employs more than a million people, is under intense scrutiny for its policies and practices in the U.S. In spite of all its might and contributions, it is regularly under attack for treatment of its employees-for their low wages, lack of medical and dental plans, and lack of pension beneflts-and for the decimation of small entrepreneurs in the community wherever it establishes its mega stores. So it is no surprise that Wal-Mart's coming to India, through a partnership with Bharti Group, is being opposed by many.
The primary purpose of this study is to analyze the ethical aspects of the largest international retailer, Walmart, coming to India where millions of people depend upon small businesses for their livelihood. The other important topics to be researched include: (a) The reasons why Wal-Mart wants to enter the Indian market; (b) Why its entry is opposed by some people; and (c) Why some others want the retailing giant to come to India.
This is a practice oriented case study (versus academic) appropriate for both undergraduate (junior and senior levels) and graduate level students. A teacher would require about an hour to explain the case contents and its significance to students. Similarly, a student would need about 2-3 hours to prepare the case and about half an hour to present it to the class, if so required. Time would vary depending on whether the case is analyzed and presented using a team approach or otherwise. However, because of the multidimensional nature of the case, a team approach may be more meaningful in its analysis.
This case would be very helpful to students, teachers, advisors, and policy makers who are interested in subject areas such as, international retailing, retailing in India, infrastructural development in India, and the effects of a giant multinational retailer's coming to India on its millions of kirana stores (small businesses) and the millions of people who depend upon these kirana stores for their livelihood.
Questions and Answers
1. Why Wal-mart wants to enter the Indian market?
India is a large, diverse, technologically advancing, and poor country. Its population of more than one billion is only second to China. Its networks of roads, railroads, waterways, and airways are quite deficient. The airport at New Delhi, capital of India, is often closed because of fog. It is quite common to find cows sitting in the middle of the roads and highways-slowing down or stopping streams of trucks, auto-rickshaws, cars, and hand-carts going in different directions. Pedestrians walk on the road, or on the heavily crowded sidewalks if available.
Electric power supplied by the local governments is available but only for a few hours a day. Power outages happen frequently, with or without advance notice. The commercial refrigeration of perishable products is in its infancy stage. A large number of people, particularly women, are illiterate. Air and water pollution is widespread. The real estate prices are skyrocketing. It is very difficult to find sufficient space for locating superstores or malls on or near the main streets of India.
India has received worldwide attention for its technological excellence and exports and the millions of jobs it has created in these areas. However, its retail trade industry has not benefited much from these opportunities. The large-chain retail stores, which are benefiting from technological tools, make up only about 3 percent of the retail sales in India. Neighborhood stores and kirana shops (small stores) make up the rest (Institute for Local Self-Reliance, July 21 , 2005). Large supermarkets are few and far in-between. Most Indians continue to shop at the neighborhood stores and the kirana shops for their requirements.
The retailing business in India is unorganized. Most of the millions of kirana shops are very small, have very little space (500 sq. …