The arrival of Wal-Mart—the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business—in India, as a joint venture with Sunil Mittal's Bharti, has created much excitement and media hype. This paper describes the value chain of Wal-Mart of USA, outlining the Indian retail environment today, with a mapping of the value chain for the success of a supermarket in the Indian scenario.

The word `value' is interpreted differently by different people. In business, value is assumed to be the benefits received from a product choice less their cost of acquisition. In other words, value talks about the stakeholders' satisfaction. Satisfaction here refers to meeting the expectations, not only of customers, but also of employees, suppliers, shareholders, the market, etc. It implies that stakeholder satisfaction calls for a broader range of management decisions, and a number of ways of fulfilling the expectations and delivering satisfaction. Today, creating and delivering value is considered to be a part of strategic management, which ensures that organizations adopt flexibility while responding to different types of customer satisfaction.

Competitive advantage cannot be diagnosed by looking at an organization as a whole. It descends from various discrete activities performed. Each activity contributes to the organization's relative value position and creates a basis for differentiation. For analyzing the sources of competitive advantage, value chain forms a tool, a means to evaluate the activities performed in an organization and how they interact, in a systematic manner (Porter, 1985). Knowledge is a resource, and knowledge management hints at enabling an organization to bring about more effective decisions to put together the parts the value chain operations in order to maximize customer satisfaction. It identifies the adventitious knowledge required to enhance the competitive advantage of the organization.

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