JOINT VENTURE CASE STUDY ON

Presented By:
Devendra Rai
Mahima Bhatnagar
Gokul Raj
WAL-MART
Wal-Mart is a US based public corporation, headquartered
in Bentonville, Arkansas
Established in 1962
Ran large discount department stores
Ranked 2
nd
biggest public corp. in the Global fortune 500 list, with
revenues of US$469 billion
Biggest private employer in the world with over two million employees
Was publicly traded on the New York Stock Exchange in 1972
Has over 11,000 stores in 27 countries, under 55 different names
BHARTI
Bharti Enterprises is an Indian business conglomerate, headquartered in
New Delhi, India
Founded in 1976 by Sunil Bharti Mittal
Grown from being a manufacturer of bicycle parts to one of the largest
business groups in India
Operates in 20 countries across Asia and Africa
Owns various businesses spanning across telecommunications, retail,
financial services and manufacturing
BHARTI- WALMART
Bharti- Walmart is a 50:50 joint venture between the two groups
Formed in 2007 for cash-and-carry and back-end infrastructure
Operates in India by the name Easyday
Presently has 220 stores across 13 states
Three kinds of format stores-
The standard neighborhood stores are called Easyday, in over 190 locations
the compact hypermarkets are termed Easyday Market, function in 22
marts
large hypermarket style stores are named Easyday Hyper,

with just one
store so far




TERMS OF THE VENTURE
Wal-Mart had proposed an initial investment of US$100 million
Wal-Mart and Bharti planned to use two different formats for their stores:
a franchised retail company and a wholesale cash-and-carry joint venture
The companies signed two separate agreements:
The first was to manage the 5050 venture for back-end supply chain
management and wholesale cash-and-carry operations
The second agreement allowed Wal-Mart to franchise itself while
sharing expertise and technology with Bharti to support the retail stores
that would be built by Bharti Retail Ltd, its wholly owned subsidiary


REASONS FOR COLLABORATION
Bharti, with its deep knowledge of Indias fast-growing consumer
market and Wal-Mart, with its extensive global retail experience,
share the same commitment to building relationships with
producers
Bhartis prior experience in dealing with FDI and international
businesses
Bharti saw an opportunity to turn around the infrastructure,
supply-chain and IT through a strategic alliance with retail-giant
Wal-Mart
REASONS FOR COLLABORATION
WALMART
Strengths:
Supply chain expertise
International infrastructure
Leverage with producers


Weakness:
No access to Indian market
without partner
Inability to establish presence
outside Americas

BHARTI
Strengths:
Existing presence in India
Experienced with Indian culture
Strong reputation
Track record of retail/working
with FDI
Weakness:
Needs multi-brand experience
Supply chain inexperience
PROBLEMS IN THE VENTURE
Foreign Goodies
Brand name
Local protesters criticized Wal-Marts operations.
Dealing with Indias unique cultural factors.
Criticized for not being socially responsible company.


SUCCESS OF THE VENTURE
Strong reputation of Bharti in India and the international infrastructure of
Wal-Mart.
Supply chain expertise of Wal-Mart and Bhartis track record of
retail/working with FDI.
Business-to-business wholesale cash-and-carry joint venture to set up
world-class modern supply chain and back-end logistics infrastructure .
Driving efficiencies across the supply chain will help minimize wastage and
provide small retailers quality merchandise at competitive wholesale prices



FALL OF THE VENTURE
On October 9, 2013 the company made public the news of the fall
Bharti will acquire the $100 million worth Compulsory Convertible
Debentures (CCDs) held by Wal-Mart in Cedar Support Services, a
company owned and controlled by Bharti
Wal-Mart acquired Bhartis stake, giving Wal-Mart 100 per cent ownership
of the Best Price Modern Wholesale cash and carry business

REASONS FOR THE FALL
Government's stringent foreign investment regime
Sourcing 30% of the goods from domestic companies
Investment issue
Corruption scandals
Conclusion
Emergence of organised retail sector .
Wal-Marts joint venture with Bharti aimed at capitalizing growing middle
class.
Bharti ideal partner for Wal-Mart.
Many unique challenges in India to overcome.
If challenges tackled , this partnership could transform Indian retail