Picking Walmart’s P.O.C.K.E.T.S. Michael Bergdahl International Speaker, Author & Walmart Competition Authority Casas GEO March 2011.
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Picking Walmart’s P.O.C.K.E.T.S.
Michael Bergdahl International Speaker, Author & Walmart Competition Authority
Casas GEO March 2011
Lions or Lions or Gazelles?Gazelles?
“Bird-Dawg”
X
X Bentonville, Arkansas Walmart Headquarters
STRATEGIES of the World's Largest Company
TACTICS of the World's Richest
Man
19621962Sam Walton’s first store
Rogers, Arkansas
Walmart Big FactsWalmart Big Facts
- World’s Largest Employer – 2.3 millionWorld’s Largest Employer – 2.3 million
- Weekly, 200 million customers shop its stores. Weekly, 200 million customers shop its stores.
- 89% of the USA public shop its stores annually- 89% of the USA public shop its stores annually
- Its 2010 sales exceeded US$400 billion.- Its 2010 sales exceeded US$400 billion.
Sam Walton’s Goal Sam Walton’s Goal was never to be was never to be the biggest . . . the biggest . . .
Walmart 2011Walmart 2011
• USA, Japan, United Kingdom, Canada, USA, Japan, United Kingdom, Canada, Mexico, India, China, Argentina, Brazil, Mexico, India, China, Argentina, Brazil,
Guatemala, Honduras, Costa Rica, Guatemala, Honduras, Costa Rica, El Salvador, Nicaragua & Puerto Rico & El Salvador, Nicaragua & Puerto Rico &
South AfricaSouth Africa
Mexico is Walmart’s Mexico is Walmart’s 22ndnd largest market! largest market!
Do you shop at Do you shop at Walmart?Walmart?
Why?Why?
WalmartVenezuela & Colombia?
The Walmart Way
To provide superior customer service
Goal to be the best at serving customers
To make customers the focus of everything
The Casas GEO Way
To provide superior customer service
Goal to be the best at serving customers
To make customers the focus of everything
The Walmart Way
Goal:
To be the #1 Retailer
in every Market
The Casas GEO Way
Goal:
To be the #1 Home Builder
in every Market
The Walmart WayThe Walmart Way
P.O.C.K.E.T.S.P.O.C.K.E.T.S.Price
Operations
Culture
Key Item Promotion/Product
Expenses
Talent
Service
1. Be #1 in Every Market
2. The Best Place to Live
3. GEO Culture
4. Meet the Budget
5. GEOmore
The Casas GEO Way
GEOstrategy – Doing everything for the client
“How did Walmart turn its Price Strategy into such a powerful competitive
advantage?”
Price
Price Strategy Question:
Answer:Answer:
Other retailers focused on how much they could
charge for their products . . .
Price
Sam Walton’s Discounting Principle
Buy an item for 80¢ & price it at $1.00
Sold 3 times as much as he could at $1.20 Though he made ½ the profit per item
He generated a greater profit overall
Price
Shopping Cart ComparisonShopping Cart Comparison
“Walmart saves its customers US$2500 per year on
groceries!”
Price
Walmart’s Pursuit of Value 1. Buying at lowest prices
2. Controlling their own expenses
3. Get suppliers to lower expenses
4. Pass savings along to customers
Price
Pricing Ideas for Pricing Ideas for The Casas GEO WayThe Casas GEO Way
Price
Control your costs – pass savings on to customers
Provide a better quality home for a comparable price
Value price leader – “Building Communities”
Operations Strategy Question:
“What makes Walmart’s Store Operations so unique?”
Operations
Operations
Answer: Walmart is a logistics, distribution, transportation, & technology driven
company
120,000 products120,000 products8300 stores8300 stores
120 DC’s120 DC’s Cross docking distribution centers
No Warehouses
Largest privately owned IT systems in the world
7000 privately owned truck fleet – largest in the USA
Operations
Hurricane Hurricane KatrinaKatrina
“Walmart’s trucks arrived in New
Orleans days before the United States
Federal Government!”
Operations
Benchmarking Best Practices
Vendor Partners
P&G
Disney
FedEx
Operations
Operations Ideas for Operations Ideas for The Casas GEO Way The Casas GEO Way
Operations
1. Continuous Improvement
2. Leverage Technology
3. Demand Superior execution:
By your leadersBy your employeesBy your suppliers
Culture Strategy Question:
“How did Sam Walton turn the people at Walmart into a
competitive advantage?”
Culture
Answer:Answer:“Sam Walton believed if you take care of your people . . .”
Culture
What Makes Walmart . . . Walmart?
Istanbul, Turkey
Culture
Culture
The Sam Walton Way
1 agenda
3 values
7 POCKETS strategies
10 rules – his tactics
Sam Walton
Walmart refers to Walmart refers to its . . .its . . . - Employees as Business Partners
- Customers as Neighbors or Friends
- Managers as Coaches
- Suppliers as Vendor Partners
Culture
Culture Ideas For Culture Ideas For The Casas Geo WayThe Casas Geo Way
Culture
Communicate Your Primary Mission - SERVICE
Drive decision making down - EMPOWERMENT
Adapt quickly – EMBRACE CHANGE
“What is Walmart’s strategy for selecting products?”
Key Item Promotion / Products Strategy Question:
Key Item Promotion / Products
“An outside-in approach”
Answer:Answer:
Key Item Promotion / Products
One AgendaOne Agenda
Sam Walton required every employee at
Walmart to think like a Retail Merchant
Key Item Promotion / Products
Saturday Morning MeetingsSaturday Morning Meetings
Product Presentations by the Buyers
Key Item Promotion / Products
Vendor Partnerships
3 kinds of suppliers
Key Item Promotion / Products
Product mix is adapted
“Walmart’s leaders manage as if it were a
small company!”
Key Item Promotion / Products
Key Item Promotion / Product Key Item Promotion / Product The Casas GEO WayThe Casas GEO Way
Key Item Promotion / Products
Provide a product with superior value
Be known as the best builder
Be known as the best place to live
Expenses“How important is expense
control to Walmart’s strategy?”
Expenses
Answer:Answer:
“Walmart’s success is driven equally by buying products at the lowest prices and continuously
reducing costs.”
Expenses
Sam Walton’s People GreetersSam Walton’s People Greeters
Theft control specialists
Expenses
Expense Control at WalmartExpense Control at Walmart
Everyone is expected to negotiateEveryone is expected to negotiate
The Walmart PriceThe Walmart Price
Walmart leverages ScaleWalmart leverages Scale
Expenses
Expense Control at WalmartExpense Control at Walmart
Everyone is expected to negotiateEveryone is expected to negotiate
The Walmart PriceThe Walmart Price
Walmart leverages ScaleWalmart leverages Scale
Expenses
Expense Control Expense Control The Casas GEO WayThe Casas GEO Way
As volume rises – expenses go downAs volume rises – expenses go down
Leaders need to lead by exampleLeaders need to lead by example
Pass savings along to clientsPass savings along to clients
Expenses
Talent“How did Sam Walton get hundreds of thousands of employees to execute his
aggressive tactics?”
Talent
Answer:Answer:“Sam Walton hired
average people, encouraged them to
perform at above average levels.”
Talent
H.E.A.T.K.T.E.H.E.A.T.K.T.E.
HHigh EExpectations AAre
TThe KKey TTo EEverything
Talent
Talent PoolTalent Pool
- Bentonville - hired off the farm
- 75% of managers promoted internally - The Walmart Way is most important
Talent
Talent Ideas for Talent Ideas for The Casas GEO WayThe Casas GEO Way
Hire for attitude and teach the skillsHire for attitude and teach the skills
Deal with Non-performers Deal with Non-performers
Adapt The Casas Geo Way standards Adapt The Casas Geo Way standards
Talent
Service“What is the importance
placed on customers and customer service at
Walmart?”
Service
Answer:Answer:“The focus of all of
Walmart’s Strategies is to improve the customer’s
experience.”
Service
All for one and one for all
Internal Customer Internal Customer ServiceService
Service
The Walmart CheerThe Walmart CheerService
Who is Number One?
Sam Walton’s Legendary Service Standards
“99.9% of Customers are honest”
The Customer is the Boss
2 rules of Customer Service
Service
Service Ideas for Service Ideas for The Casas GEO WayThe Casas GEO Way
Empower employees to resolve complaints
All for one and one for all mentality
Drop everything else to serve your customers
Service
The Walmart Way & The Casas GEO
Way
Focus everything on your clients
The Casas GEO CheerThe Casas GEO CheerService
Who is Number One?
Casas
GEO
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