Walmart Organic Grwth

7/30/2019 Walmart Organic Grwth

1/5

WALMART ORGANIC GRWTH

DEF:ORGANIC GRWTH:

Organic growth is the process ofbusinessexpansion due to increasing

overall customer base, increased output per customer or representative,

new sales, or any combination of the above. The growth rate that a

company can achieve by increasing output and enhancing sales. This

excludes any profits or growth acquired from takeovers, acquisitions or

mergers. Takeovers, acquisitions and mergers do not bring about profits

generated within the company, and are therefore not considered organic.

Organic growth represents the true growth for the core of the company.

It is a good indicator of how well management has used its internal

resources to expand profits

WALMART

Anticipated 2011 sales of around 450 billion dollars. Thispositions Walmart International firmly as the world's number 3

retailer, galloping ahead of Tesco and Germany's Metro Group and

just a fraction smaller than Carrefour.

Walmart International accounts for more than 25 % of totalWalmart and is growing at 20 % per year through a network that

includes more than 4,500 stores covering 55 different banners in

14 countries outside the USA. Walmart's financial reserves allow them to invest heavily in multi-

format, new store development. For example, they have basically

tripled their store counts in Mexico & Canada since entry.
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Business


2/5

Walmart operates through several retail formats such asSupercenters(A very large commercial establishment that is a

combination of a department store and a supermarket.), general

merchandise stores, food and drugs, bodegas (small markets), cashand carry stores, membership warehouse clubs, apparel stores, soft

discount stores, and restaurants

WALMART DUAL GROWTH STRATEGIES IN DIFFERENT

COUNTRIES:

Wal-Mart's strategy combines organic growth with large-scale

acquisitions, its Chinese revenues having doubled in 2007, helped by

the USD 1 billion purchase of a controlling stake in the Trust-Mart chain

early in the year, but also by the opening of 24 new Wal-Mart stores.

Wal-Mart plans to double again its number of outlets over a five year

period, a target that seems realistic considering the current rate of new

store openings.

Walmart Canada continues to increase sales through its supercentre

expansion program. Brazil, China and Mexico continue to offersignificant opportunities to add new stores and serve more customers.

We will grow in our countries by winning locally. It is observed that

their returns through organic growth is more predictable than through

acquisition

OPPORTUNITY FOR WALMART IN INDIA:

India being the second largest populous country in the world was

emerging as the hottest destination for retail industry.

Market Size:-

Indian retail sector is divided in to two groups one is organised group

and other one is unorganised .In that only 3% retail market is organised
http://financial-dictionary.thefreedictionary.com/USDhttp://financial-dictionary.thefreedictionary.com/USD


3/5

and remaining 97%is unorganised so there is huge scope for growth and

expansion in Indian retail sector. Scope for a growth in Indian retail

market is 97%.

India represents a $250 billion retail market, growing 7.2 percent a year,

but modern retailing is just starting to emerge. This shows us that India

is a huge organic growth opportunity for Wal-Mart. The average urban

household income in India is about $3,000 a year, roughly in line with

China, and the consuming class has grown from 35 million families in

1996 to an expected 80 million this year. That's roughly in line with the

U.S market. This is a very big opportunity for walmart.

FUTURE PLANS FOR WALMART:

Walmart International continues to invest in organic growth across its

markets. Capital expenditures will range from $4.5 to $5.0 billion in

fiscal 2014. New stores are expected to add between 20 and 22 million

square feet next year, in line with the current fiscal year projection of 21

to 23 million square feet.

Next year, walmart is allocating 60 percent of our funding to

developing our higher growth markets and 40 percent to developed

markets,explained Doug McMillon, Walmart International president and

CEO. We will point our investments toward the better performing

formats, such as supercenters and discount compact hypermarkets, and

we will stop or slow growth in lesser performing formats. In some

cases, we have already done this, and it will be reflected in futureperformance.

WHY ORGANIC GROWTH BETTER:


4/5

organic growth is always better, its a slow and steady growthwhich can be sustained for a long period of time, to say in one

word, long run strategy.

companies can make fast and steady, as it depends on thecriticality of company compared to the Industry growth.

The most profitable growth of any company is predominantlyorganic growth - initiatives that focus on bringing innovation in the

form of new products and services, identifying opportunities for

existing offerings in new markets, or generating more revenue

from existing offerings from current customers

Recommendation:-

The increase number of buying power of Indian middle class opensdoors for new players to make the market attractive and profitable.

If Wal-Mart use this planned strategy to make entry in Indian

market, it will help them to establish and make sustainable

business.

Indian retail law does not allow multi-brand foreign retailers tosell directly to consumers So Wal-Mart will have to make 51:49

joint ventures with any Indian company to enter in Indian market.

Walmart can opt for combined strategy of organic growth andacquisition in India.

According to me Wal-Mart must enter in Indian retail industry,there is so much scope for such companies.


5/5

Wal-Mart competitive advantages matches to the Indian consumer,which is a positive reason to enter in India. It will become

milestone for Wal-Mart in South Asia.

Documents

Walmart Organic Grwth