Picking Walmart’s P.O.C.K.E.T.S. Michael Bergdahl International Speaker, Author & Walmart Competition Authority Casas GEO March 2011.

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