Market Entry Strategy.Contemporary International Marketing Issue Assignment

Market Entry Strategy.Contemporary International Marketing Issue. Wal-Mart Stores Inc - Assignment Example Critical evaluation of market entry strategy used by Wal-Mart at the time of entering India The retail market of India is one of the largest growing sectors and it contributes to about 15%, towards the GDP of the country. Retailing sector is the most organized sector with large amount of target customers of annual income of more than Rs 45 lacks. Keeping such scenario in mind, Wal-Mart, one of the largest retailers of US decided to enter into the market of India (Onkvisit & Shaw, 2004, pp. 456-470). However, Wal-Mart entered the market of India through the strategy of franchising in order to capture it. It is the procedure in which, the franchisor presents a chain of stores to distribute varied types of products to its target customers. This strategy proved quite effective for Wal-Mart as it helped in fulfilment of the vision of presenting best quality of products at lowest possible prices. Due to which, the level of customers started increasing at a considerable level, thereby creating a stable position in the market among other retail owners. Along with this, its market share also enhanced from 5% at initial sages to about 35% in the year 2011-2012. Apart from this, the total sales increased from US $ 412.112 billion to US $ 435.127 billion in 2012, among other retailers in the market. Due to which, the level of reputation and brand image of Wal-Mart increased to a considerable extent that proved quite effective for the entrant to dominate other retailers. ... Not only this, the strategy of presenting worth mentioning services to the customers also acted as a strength for the organization of Wal-Mart thereby enhancing its brand value considerably. Moreover, it also helped in creating a strongest brand image within the minds of the customers that enhanced its level of sustainability in the market among other contenders. Other than this, due to wide range of products of varying qualities, Wal-Mart became able to attract numerous customers of diverse economic standards. Due to which, it attained a hike in its total sales by almost 65% as compared to other retailers in this competitive market. Therefore, due to such above mentioned activities, Wal-Mart attained the brand name of, ‘World Largest Retailer’, that continued to fulfil the demands of its low-income group customers. Therefore such type of strategy acted as a boon for the new entrant in Indian market, thereby enhancing its profit margin from US $ 311.23 billion to 342.121 billion (Kotabe & Helson, 2011, pp. 376-389). Hence, it might be depicted from the above mentioned points that the strategy of franchising proved extremely effective in generating a strong brand image in the segment of retailing. The factors that influenced Wal-Mart’s decision to enter Indian market In order to understand the retail market scenario of India, Porter’s five forces is used. Threat of new entrants- the threat of new entrants is extremely low as it requires high rate of investment at the initial levels. This fact acted as a boon for the retailer like Wal-Mart as it comprises of huge amount of cash required for investment at the time of entering