Walmart by VIPLAV SINGH , ITS GHAZIABAD

Presented by-

Viplove singh

WALMARTTYPE - Public ( NYSE)

FOUNDER - Sam Walton

FOUNDED- Rogers, Arkansas(1962)

HEADQUARTERS – Bentonville , Arkansas

CEO - H. Lee Scott CHAIRMAN- S. Robson Walton

PRODUCTS - Supercentres ,neighborhood

Market Cap.- US$ 228 Bn. (2007)

SALES-$374.5 billion(2008)

EMPLOYEES- 2.1 Million AREA SERVED – Worldwide

INDUSTRY – Retail Discount stores

OPERATIONS -16 Countries

AUG. 11,-08

Overview of Wal-Mart

• Retail Units Worldwide 7,390

• US Retail Units 4,219Wal-Mart Stores 920Supercenters 2,565Sam’s Clubs 593Neighborhood Market 141

• International Retail Units 3,171

AUG.11,-08

History of Wal-Mart• In 1945 Sam Walton

opened the first Ben Franklin franchise in Newport Arkansas and operated them with his wife, Helen and brother, Bud.

• These were small chains that were very successful.

• In November of 1962 Wal-Mart was opened.

• Wasn’t until mid 1970’s that Wal-Mart began to grow.

AUG.11,-08

Important Facts• Wal-Mart employs 2.1 million associates worldwide in more

than 4219 stores in the US and more than 3171 throughout the rest of the world.

• They serve more than 176 million customers per week.• its 5 forces tend to have a positive effect on the company. The

company has high barriers of entry, a moderate threat of rivalry with Target and Kmart due to its expansion of super centers, and its incredible power over all its suppliers because Wal-Mart purchases so many products, the suppliers have little negotiating powers, and finally Wal-Mart technically has a great amount of power over its buyers because of its product variety and low prices.

Cont.

• Wal-Mart is a retail phenomena that has grown from a backwoods discount store into a company that accounts for nearly 17% of general merchandise, apparel, and furniture sales in the U.S. as well as generating enough revenue to rank 30th in the world's economies, right behind Saudi Arabia (Forbes, 2004) .

• Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The Company’s securities are listed on the New York Stock Exchange

AUG 11,-08

AUG 11,-08

Supply chain management• Wal-Mart’s merchandise replenishment cycle is no more than 48 hrs• Fleet of 7,000 trucks in US

Point-of-sale system

captures data in real-time

Data is transmitted to warehouses

for Inv. Mgmt.

Retail Link transmits data to supplier

Orders are generated from previous-day

sales

Merchandise is loaded onto trucks using

cross-docking

Merchandise is delivered to

the store

Merchandise is manufactured

based on historical and real-time data

Merchandise is shipped to warehouses

Customer made a

purchase

The store will re-stock the shelves with merchandise

Cont.

AUG. 11,-08

The US-based Wal-Mart, the largest retailer in the world, is believed to be the best supply chain operator of all times. Much of the efficiency achieved by the company in managing its supply chain is because of its proactive use of IT and Internet-enabled technologies.

Cont.• Probably the number one thing that led to success is their world class

supply chain. Wal-Mart’s supply chain is remarkable and really allows them to cut cost by eliminating unneeded steps. For instance their supply chain is so high tech that it can notify Wal-Mart’s suppliers directly (cutting out worker intervention) when inventory is low for certain products. Another internal strength that has lead to Wal-Mart’s success is its ability to focus on driving costs down to ensure every day low prices. Wal-Mart has never drifted away from this motto.

• They have successfully designed a distribution system that allows them to accomplish the impossible: efficiently and effectively re-supply their 3,500+ stores in a quarter of the time of their competition. They also utilize Electronic Data Interchange technology to shorten the distribution cycle and as well as other technologies such as RFID to automate tasks.  Wal-Mart’s internal trends continue to include their low cost mode of operation, their innovative spirit which is particularly noticeable in their management of their supply chain

AUG. 11,-08

Successful usage of SCM• Using IT in Supply Chain Management Wal-Mart employed the most advanced IT tools and applications in

all supply chain functions, starting from demand forecasting, procurement, logistics, distribution and inventory management. The company focused on bringing efficiency to every function of the supply chain so as to offer its customers products at the lowest possible prices.

• Using The Internet In Supply Chain Management Wal-Mart is integrating its supply chains with major

customers. Wal-Mart is an innovator in SCM, which has helped it to provide low-cost merchandise to its customers and undercut its competitors

AUG 11,-08

Wal-mart’S PRODUCT ATTRIBUTES

• What are the 4 key product attributes??? ….product cost, product delivery-response time,

product variety, product quality

• Wal-mart’s product cost? Low

• Wal-mart’s product delivery-response time? Low

• Wal-mart’s product variety? High

• Wal-mart’s product quality? Moderate-high

AUG. 11,-08

AUG 11,-08

Wal-mart Strategy

AUG. 11,-08

Mission Statement

AUG. 11,-08

Their Vision Statement

"The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience."

- Sam Walton (1918-1992)

AUG 11,-08

New Mission Statement • Our mission is to provide goods and services for our

customers at everyday low prices. With our innovative technology we strive to have merchandise ranging from food, clothes, music, etc. on hand 24 hours a day 7 days a week. We are committed to the growth of Wal-Mart and challenge ourselves to be better. We strive to have the best, be the best, and provide quality and assurance to our customers. Our employees are a huge asset to our company, and we would not be the company we are today without them. They have a huge impact on what our company was, what it is, and what it will be. We also feel it is important to give generously to those who are less fortunate than others, which is why Wal-Mart donates thousands of dollars a year to different organizations.

AUG 11,-08

New Vision Statement

• Our vision is to provide good quality and services to our customers while remaining the market leader and striving daily to be the most admired company.

AUG 11,-08

Divisions of WAL-MART

• Neighborhood Markets

• International • Sam’s Club• Supercenters• Distribution

Centers

AUG 11,-08

Neighborhood Markets• Began in 1998• Located in market with Wal-Mart

Supercenters• Average area about 42000 sq. ft.• 132 stores in U. S. • Offers customer groceries,

pharmaceuticals & general merchandise.

• Provides about 28,000 items to customers.

• Neighborhood Markets are used to fill the gap between Discount Stores and Supercenters.

AUG 11,-08

International

• Wal-Mart's international operations currently comprise 2980 stores in 14 countries outside U. S.

• It accounts for 20% of sales• In U. K. only 42.7% sales of

international division.

Sam’s Club• Membership-only, cash-and-carry

operations. • Sam's Club is a chain of warehouse

clubs which sell groceries and general merchandise, often in large quantities.

• Financial service credit card program (Discover Card) available at all clubs.

• Annual membership fee is $35; the Elite Membership is $100.

– Elite membership has additional benefits like automotive service contracts, roadside assistance, home improvement, auto brokering and pharmacy discounts.

• Bulk displays and name brand merchandise.

AUG 11,-08

supercenters

• These are hypermarkets• Avg. size 197000 sq. ft.• Additional discount stores

they have meat and poultry, baked goods, frozen foods ,dairy products , sea foods ,garden related, pet shops, optical centre, fast food outlets, hair and nail saloons, local bank branches ,gasoline etc.

• 2447 supercenters in U. S. A.

AUG.11,-08

DISCOUNT STORES

• These are departmental stores approx avg. size 102000sq. Ft.

• They have general merchandise and selection of foods

• 971 discount stores in U.S.

AUG. 11,-08

AUG.11,-08

Worldly Stores

CountryDISCOUNT

STORESSUPERCEN

TERS

SAM'S CLUB

SNEIGHBORHOOD

MARKETS

Argentina 0 11 0 0

Brazil 0 12 8 2

Canada 213 0 0 0

China 0 20 4 2

Germany 0 94 0 0

Korea 0 15 0 0

Mexico 472 75 50 0

Puerto Rico 9 1 9 33

United Kingdom 248 10 0 0

International Totals 942 238 71 37

AUG. 11,-08

Stores in US and World

U.S. Totals 1568 1258 525 49

Grand Totals 2510 1496 596 86

AUG.11 ,08

BCG

April 19, 2006

External Factors

AUG. 11,-08

Key External Factors in U. S.

• Opportunities– Fortune’s number one Most Admired Company

and largest company in nation– World’s largest private satellite

communication systems– Ron Brown Corporate Leadership Award

• Threats– Target– A solution to the monopoly that Wal-Mart has

created

AUG 11,-08

Internal Factors

Key Internal Factors in U. S.

• Strengths– Stores in all 50 states– New concepts:

• Hypermarkets, supermarkets– Wide variety of merchandise– Nationally advertised merchandise– Limited lines of merchandise – made in USA– Point-of-sale bar code scanning– Great employee benefits

• Weaknesses– No formal mission statement– Management resisted putting women on board of

directors– Hiring illegal minorities to clean– Growth for employees only in division

SWOT OF WAL-MART strength(internal)R&D, high techDeep pockets, Infrastructure, Luxury car/ truck dominance, Infrastructure/ small cars, Distribution network ,Joint Ventures

Opportunity(external)Worldwide presenceExpansionBuy U.S.Leverage tech. and financial know-howBetter segmentationCompetition

weakness(internal)Lead timesDifferentiated modelsPlatform madnessProductivity, efficiency, costsBureaucracy/ leadershipIncentive systemVertical integration

threats(external)CompetitionLabor unrestBrand loyalty disappearancePerception, quality, reliability, durabilityConsumer social awarenessRising costsSupplier backlash

AUG 11,- 08

AUG 11, -08

Different Strategies

• Add more hypermarkets and supermarkets to establish more growth

• Buy products from other countries to have more of a variety of merchandise and better quality merchandise for customers

Sourcing from india

• For the past 3 years, the sourcing from India has been growing at 30% every year with a cumulative figure of goods worth $1.2 billion. Now, it intends to grow this by 40 per cent. Wal-Mart has been sourcing goods from India since 2001.

• Item sourced-textiles, leather, jewellery,food items like basmati rice, tea, spices , sea food

• Sourcing office located in BangaloreAUG 11,-08

Bharti and wal-mart venture

• Bharti-Wal-Mart venture would make an initial investment of US$ 100 million

• Wal-Mart's logistics skill and Bharti's execution capability will create a potent force in the Indian market.

• Wal-Mart will operate through franchises and handle the wholesale end• Bharti will manage the front end involving opening of retail outlets, while

Wal-Mart will take care of the back end, such as cold chains and logistics.• The partnership may seem odd, since Bharti has no experience in

discount and grocery stores. But Bharti, the No. 1 cellphone company here, has a vast retail distribution network and a knowledge of the buying habits of India’s middle class. Moreover, Bharti has a good flow of cash, which could help Wal-Mart expand

AUG 11,-08

About Bharti Enterprises• Bharti  Enterprises  is  one  of  India’s  leading  business groups with

interests  in  telecom,  agribusiness, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of India’s leading private sector providers of telecommunications services with an aggregate of 44.67 million customers as of end of June 2007 spanning mobile, fixed line, broadband and enterprise services.  Bharti Airtel was recently ranked amongst the best performing companies in the world in the BusinessWeek IT 100 list 2007. Bharti Teletech is the country’s largest manufacturer and exporter of telephone terminals.  Bharti has a joint venture with ELRo Holdings India Ltd. – ‘FieldFresh Foods   Pvt.  Ltd’ - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - ‘Bharti AXA Life Insurance Company Ltd.’ - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd

AUG. 11, -08

Cash and carry & wholesale strategy

• Wholesale cash-and-carry operations provide small retailers and business owners a wide range of quality products at competitive wholesale prices that help them enhance their businesses and profitability. The Bharti Wal-Mart business-to-business (B2B) wholesale cash-and-carry joint venture will serve kirana stores, fruit and vegetable resellers, restaurants and other business owners.  It also will serve other retailers such as Bharti Retail, which is setting up a chain of stores in India that are 100 percent owned and operated by Bharti.

• The wholesale cash-and-carry venture will invest in setting up an efficient supply chain. This will link farmers and small manufacturers directly to retailers, thereby maximizing value for farmers and manufacturers on the one end and retailers, and in turn, consumers on the other. The venture will support farmers and small manufacturers who have limited infrastructure and distribution strength, and the supply chain will enable minimum wastage, particularly of fresh foods and vegetables.

AUG. 11,-08

Cont.• Wal-Mart's global expertise in supply chain and logistics will

bring enhanced efficiencies across the retail ecosystem. This venture promises to bring great value to millions of farmers, artisans, small manufacturers and retailers across India. We are pleased to be a partner in developing this sector which is set to become a significant engine of India’s economic growth

• We are delighted that, in Bharti, we have a well-respected partner who has a deep understanding of the local market. Through our wholesale cash-and-carry joint venture, we will help drive efficiencies across the supply chain and work towards the betterment of India’s farmers, small manufacturers and retailers, in line with our global vision of saving people money so they can live better. We would also like to leverage our global scale to transform some of these suppliers into exporters with access to our global markets over time

AUG.11 ,-08

Cont.

• sell a wide range of fruits and vegetables, groceries and staples, stationery, footwear, clothing, consumer durables and other general merchandise items.

• Bharti Wal-Mart Private Limited will bring modern supply chain and back-end logistics expertise to India, bringing Wal-Mart’s global best practices in such areas as just-in-time inventory, retail information systems, cold chain infrastructure, GPS for truck and trailer tracking, and fuel management systems.

• It is our hope that big and small retailers and businesses will be our customers, take advantage of the efficiencies we provide and derive significant benefits for their businesses.”

AUG. 11,-08

Cont.• The equal joint venture, Bharti Wal-Mart Private Ltd., is for cash-

and-carry, or wholesale, and back-end supply chain management• Bharti Wal-Mart will open 10 to 15 cash-and-carry facilities over

seven years, employing about 5,000 people. A typical store would occupy 50,000-100,000 square feet.

• The first of the stores, which will sell groceries, consumer appliances and fruits and vegetables to retailers and small businesses, is slated to open in North India by 2009.

• If that’s the wholesale cash-and-carry business, Bharti plans to set up front end stores- like convenient stores, super markets and hyper markets - in which it plans to invest about $2.5 billion. This will be wholly owned by Bharti, which will of course source expertise and technology from Wal-Mart. Once the rules permit FDI in front end multi-brand stores, Wal-Mart is likely to be a part of the company.

AUG.11,-08

Opportunity in India

• India's rapidly growing middle class has more money to spend than any previous generation - but no place to spend it. Just 3% of retail spending in the country is in what westerners would consider "organized" retail stores

• The Indian retail industry is expected to grow from $300 billion a year today to $637 billion by 2015. The share of the overall retail market in India held by large retail stores is expected to grow in the next five years to 18 percent, from 3 percent.

• According to the research of (NCAER) published in Economic times dated Aug.8th,08 the trend among the top 20 Cities for the income per household will be doubled till 2016

AUG 11,-08

Thank you

April 19, 2006