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Wal-Mart has recently announced that the company is terminating its agreement with Bharti Enterprises, an Indian conglomerate (Riley n.p.). The American multinational company will not cooperate with the Indian conglomerate and the two companies will develop on their own. Notably, Wal-Mart has operated in India for decades. However, the recent agreement is one of the signs of the company’s expansion slowdown.
Notably, the company will still operate in the region. For instance, the company’s CEO stresses that Indian market is still growing as lots of families shift to the middle class (Riley n.p). At the same time, the company’s representatives note that the Indian government has enacted laws and regulations which make it difficult for a foreign company to operate in the region effectively.
Admittedly, this event can have a number of implications regionally as well as globally. At this point, it is necessary to note that this slowdown is a sign of the ongoing trend. Indian government strives for supporting national businesses. Such giant as Wal-Mart is still able to operate in the region, but smaller (national) business will have more opportunities.
Thus, Indian market will have more national retailers. Notably, multinationals will still be present in the market and this will favorably affect the market as there will be the necessary competition which always leads to development.
At the same time, Wal-Mart may consider the possibility of expanding to other markets. As for India, Wal-Mart may try to develop new strategies to make the existing facilities more efficient. There are chances that Wal-Mart will focus on western markets. The slowdown of Wal-Mart’s expansion can also make other western companies reluctant to enter Indian market.
As far as I am concerned, Wal-Mart’s decision to terminate cooperation with some of Indian companies can provide a variety of opportunities for national businesses in the region. Wal-Mart has had a significant impact on the development of Indian market. It even dictated certain approaches, but the Indian government has changed the trend. The corporation will still be present in the market.
However, it will have to cope with a number of limitations and restrictions imposed by the government. At the same time, national business that has learnt a lot from such multinationals as Wal-Mart will grow stronger and will become more competitive. The Wal-Mart’s expansion slow-down will favorably affect the Indian market and economy as national companies will be more competitive and efficient.
As for Wal-Mart, the company will have to go back to western markets. The expansion slowdown can pose certain threats as the company is likely to have losses. Clearly, the multinational has to develop new strategies to be able to remain competitive and efficient. Expansion to new markets in Eastern Europe is also possible. Nonetheless, the best way for Wal-Mart is to try to reconsider its policies.
Numerous scandals negatively affect the company’s image, which, in its turn, can lead to significant losses for the company. It has been acknowledged that Wal-Mart has faced a lot of constraints and lost a lot of points. If the company sticks to the existing approaches and strategies, it will go bankrupt soon.
Clearly, the company will not be able to remain efficient at the expense of the expansion in Asia. The region is becoming less attractive for western multinationals due to introduction of new policies.
Works Cited
Riley, Charles. “Wal-Mart Breaks up with Indian Partner Bharti Enterprises.” CNN Money. 2013. Web.
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