Tomahawk, WI 10/10/2013 (BasicsMedia) – Wal-Mart Stores, Inc. (NYSE:WMT) was to get into a business partnership with Bharti India. This deal was to be beneficial to both firms. WMT has not enjoyed similar sales in its international stores compared to what it has posted in its local stores in the U.S. The U.S. still retains its place as the largest market for WMT. This deal was expected to help WMT see its operations in India improving tremendously bearing in mind that this is one market which presents the company with numerous opportunities for growth and increased sales.

 The fact that Bharti is an Indian company with widespread acceptance by the public was designed to help WMT enjoy its network and connections as well as market presence to market its own products. This deal would have helped to popularize WMT stores and products all over India. The benefits would have been awesome for WMT. At no time was this deal ever seen as one which is destined to fail, or perform dismally or fail to take off. The truth of the matter is that the deal seems to have been everything else other than a success.

The two firms have now said that the deal or arrangement they were to get into is no longer tenable and they are looking at their options. This comes hot in the wake of reports issued last year where WMT had called or referred to Bharti as its natural partner as it seeks to gain a better share of the Indian market. If WMTs deal with Bharti had gone ahead, I foresee a situation where it would have outperformed even the local ventures out up by Indians to cater for the clients. As things now stand, WMT has to look elsewhere for ways of penetrating India.

 WMT has to find another way of helping its Indian operations to stay afloat. The Indian laws regarding foreign investments requires the foreign firms to own not more than 51% of their operations in this country. What this means is that the company now has to look for other partners to help its Indian operations lest the government is forced to act. Secondly, Bharti’s presence would have been good for WMT bearing in mind that the government has placed a policy where foreign firms have to source for 30% of their products locally.

 Bharti would have perfectly helped WMT with the last requirement regarding 30% of all products being sourced locally. It would have perfectly made use of its local connections to source of 30% of the [products which WMT needs as part of its day to day operations. In a sense, I would say that WMT has come out the worst from the collapse of its deal with Bharti. The latter is an Indian company; therefore, it doesn’t suffer similar problems as those encountered by WMT. However, it could also have benefited from the marketing and similar products.

 But if there is something good to have come out of this deal, is the announcement by WMT that it will not get out of India.

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