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Wal-Mart, the world's biggest retailer, was founded
in the year 1962 when Sam Walton and his brother
opened the first retail store in Rogers, USA. The initial strategies of
Wal-Mart included opening retail stores in small towns. The Walton's
adopted innovative concepts for their retail stores such as self-service. By
the year 1967, Wal-Mart was operating 24 stores with revenues of
over $12.6 mn. The early success of Wal-Mart, in 1968, encouraged it to
expand in the areas of Oklahoma and Missouri. Supported by an
efficient distribution network, Wal-Mart continued to grow in leaps
and bounds. The retailer was operating with 276 retail stores and
impressive sales of $1.4 bn by the year 1980. The number of stores soon
increased to 640 in 1984. Wal-Mart mainly operated two kinds of
divisionsSpecialty divisions and the Retail divisions. The specialty segment
further included Wal-Mart Optical, Wal-Mart Vacations,
Wal-Mart Pharmacy and Tire & Lube Express. The Retail
division was segregated into Wal-Mart Stores,
Neighborhood Market and Sam's Clubs.
In the early 1990s, Wal-Mart declared that it wanted to operate on
a broader level and hence was planning to go global. Very soon, it
became a big name in the global retail markets. Parallely, the Indian
retail sector was growing at an impressive pace. Driven by rising incomes
of people, changing consumer behavior, luxurious lifestyles, rural
retailing, etc., the retail sector soon became a growth engine of the
Indian economy. Wal-Mart soon began to show a keen interest in entering
the Indian landscape. However, one problem in entering the Indian
markets was the government restrictions on FDI in Indian retail. These
restrictions were imposed by the government due to the
following reasons: |
