We Are the NATION , the NATION OF DOMINATION !!!!

NEW

S

COMPANY’S MISSION:

“Saving people money so they can live better ”

LEADERSHIP :

Sam Walton

“Save Money Live Better,"

1962 - 64

1964 - 81

1968 - 81

1981- 92

1992- 2008

2008 onwards

WAL-MART : EVOLUTIONWAL-MART : EVOLUTION

1962 : 1ST Store in Rogers , Arkansas , USA : sales of over $ 1 million : early success rapid expansion Oklahoma & Missouri

1970 : WALMART STORES INC Bentonville , Arkansas .

1972 : Listed in NYSE

WAL-MART : EVOLUTIONWAL-MART : EVOLUTION 1972 - 80 : developing years of super power - Everyday low price - Increasing numbers of stores - Customer Centric approach - Wal-mart cheer - Increasing Sales , profits - Increasing employees - Hutchison shoe co. - Starting of diversification - Use of technology

WAL-MART : EVOLUTIONWAL-MART : EVOLUTION1987 Wal-Mart Satellite Network (largest private satellite communication system in the U.S.) 1988 David Glass named chief executive officer of Wal-Mart Stores, Inc.1988 First Supercenter opened in Washington1990 McLane co.1992 Made in America2002 Sales $ 218 Billion Record sale of $ 1.43 billion in a day.

Medals of Honorssssssssss…………….

WAL-MART : WAL-MART : BUSINESS SEGMENTSBUSINESS SEGMENTS

RETAIL DIVISION - WAL MART Stores - SAM’s Clubs - Neighborhood markets - Wal-Mart International - Wal-Mart . Com

SPEACILITY DIVISION - Tire & Lube Express - Wal-Mart Optical - Wal-Mart Pharmacy - Wal-Mart Vacations - Wal-Mart Used Fixture Auctions

WAL-MART : CONCEPTSWAL-MART : CONCEPTS SAM’s Ten Rules Respect for the Individual Service to the Customer Strive for Excellence The Sundown Rule Exceed Customers' Expectations The "Ten-Foot Attitude" branded products at low cost open door policy

MISSION

MISSION

CHINACHINA

Wal-Mart’s International Wal-Mart’s International OperationsOperationsReason….. stiff competition from K-mart and

Target, becoming difficult to sustain its

double digit growth rate, to tap vast markets elsewhere, opportunities for discount stores.

Development center

NortheastDevelopment center

North

Development center

Southwest

Wall-Mart

Sout

h

Supe

r cente

r

Apr.

2000

1st Super center

Apr. 2001 2nd

Super

cente

r

Oct.

200

2 Super center

July 2005

its 48 th store

•Ground work started in 1994 and opened its first super center in August 1996 in association with Shenzhen International Credit Investment Company•The plan for Shanghai was cancelled due to government issues•But within the year of opening sales touched $120.8million

In 1998 sales climbed by 10%With that encouragement they open development centers in

In 1999 Wal-Mart ranked ninth among china’s retailers.In April 2000 opened its first super mart in north China, in association with Dalian Human Group Co. ltd.By the end of 2000 Wal-Mart’s investment in China was more than RMB 900 million ($108.7 million).In April 2001 opened its second super mart in Dalian and ninth store in china, with floor space of 21000 square meters biggest in the world

Now in ChinaSupercenters 97SAM'S CLUBs 3Neighborhood Markets 2Trust-Mart 100Associates More than 1.9 million

Wal-Mart’s International Presence in Wal-Mart’s International Presence in 20052005

Country Mode Of Entry

Year of Entry

JV partner/ Company Acquired

No. of Stores

Mexico Joint Venture

1991 Cifra 679+

Puerto Rico Wholly owned subsidiary

1993 Wal-Mart Puerto Rico,Inc.

54

Canada Acquisition 1994 Woolco Stores

262

Argentina Greenfield operations

1995 - 11

Brazil Joint Venture

1995 Lojas Americans’

149

China Joint Venture

1996 Shenzhen international Credit Investment Company

45+

Cont….Cont….

Country Mode Of Entry

Year of Entry

JV Partner/ Company Acquired

No. of Stores

Germany Acquisition 1997 Wertkauf and Interspar

91

South Korea Acquisition 1998 Makro Stores

16

United Kingdom

Acquisition

2000 Asda 282

Total - - - 1587

Wal-Mart’s Division Wise Operating Wal-Mart’s Division Wise Operating ResultsResults

2005 2004 2003

Division

Net sales ($ mn)

% of Total

% Increase

Net sales ($ mn)

% of Total

% increase-

Net sales ($ mn)

% of Total

Wal-Mart’s stores

191,826

67.3 10.1 174,220

68.0 10.9 157,120

68.4

SAM’s Club

37,119 13.0 7.5 34,537 13.5 8.9 31,702 13.8

Internati-onal

56,277 19.7 18.3 47,572 18.5 16.6 40,794 17.8

Total net sales

285,222

100 11.3 256,329

100 11.6 229,616

100

Operating Income from Operating Income from International OperationsInternational Operations

Fiscal year Operating Income (in $ million)

2005 2,998

2004 2,370

2003 1,998

Governance PracticesGovernance Practices

high degree of transparency in relation to career growth,

three months training to all new employee,

“standards training” to suppliers, employed 100 auditors to

conduct surprise inspections at supplier factories.

Charitable contribution by Charitable contribution by Wal-MartWal-Mart Between 1997 and 2004, Wal-

mart’s charitable contribution was around RMB 19.44 million.

In November 2004, it donated 1 million RMB (US$ 120,482) to help establish the China Retail Research Center at Tsinghua University.

List of honors received by Wal-Mart List of honors received by Wal-Mart in Chinain China

Prize- winning Company/store

year Honorary Title Award- giving Official Unit

1998 Advanced Food Sanitation Enterprise

Shenzhen Public Health Bureau

Lakeview Wal-Mart Supercenter (shenzhen)

2000 No Fake products Store

Shenzhen quality & Technology Supervision Bureau

2001 Good Reputation Store

Shenzhen quality & Technology Supervision Bureau

2000 Advanced Food Sanitation Enterprise

Shenzhen Public Health Bureau

Cont…….Cont…….

Prize- winning Company/store

year Honorary Title Award- giving Official Unit

Zhongshon Wal-Mart Supercentre (shenzen)

2000 No Fake products Store

Shenzhen quality & Technology Supervision Bureau, STDB

2001 Good Reputation Store

Shenzhen quality & Technology Supervision Bureau

2000 No Fake products Store

Shenzhen quality & Technology Supervision Bureau, STDB

The Approach to maintain EDLP

GPC (GLOBAL PROCUREMENT CENTER)

FINALIZATION OF SUPPLIER BASED ON

PRODUCT QUALITY PRICES SERVICE STANDARDS

STORE MANAGEMENTSTORE MANAGEMENTCombination of 95% Chinese

goods with Chinese workforce gave strong feel to Wal-Mart .

Store had wider aisles and smaller check out counters.

Local Chinese delicacies .Retail-tainment.

Wal-Mart's Supply chain

operations is not as efficient.

Competition was very high from

both local Chinese retailers and

foreign retailers.

Wal-Mart’s EDLP practice was

replicated by other retailers.

Wal-Mart’s golden

strategy was not fully

successful .

Transportation cost for wal-

mart in china was

high due to long distances.

In 2003, Wal-Mart’s

distribution center opened in “Tianjin” was

not utilized properly.

Suppliers were unhappy with the company’s sudden

price reduction practice.

VS

Wal-Mart entered china in 1994

First store in 1996 at ShenzhenIn a year sales touched $120.8 million

April 2001 9 stores with investment of $108.7 million

2004 Wal-Mart invested 1.6 billion RMB in china and established 45 stores

1

3

9

16

22

25

1999 2003 2004

Carrefour in china

• Entered and started in 1995• They studied the market differently• Entered into direct deal with the local

government assuring developments• They even acquired other retailers which is

against the governance • Expand there operations rapidly by 2001 they

had 27 hyper market and 3rd largest retailer in china

Comparison TableContext Carrefour Wal-Mart

Start 1995 1996

Strategies

Unethical EthicalLocalized approach Localized Approach

Simple procurement process

Complex procurement process

Decentralization Centralization

Joint Venture 8 Local RetailersWith investment

companyGPC 10 6Growth Inorganic Organic

•Freedom is given to each store manager•Store manager is responsible for any decision•He takes the decision on Product, Price, and Promotion of it

•Freedom is not given to any employees to take a decision•They follow the ten foot rule and Wal-Mart cheer •Pricing decided by Wal-Mart after conducting market survey

•85% of the products wear from the local market•Suppliers are instructed to negotiate with store manager for price and stocks

•90% of the products wear from the local market•They believe in controlling the suppliers

supplier relationship•suppliers are unhappy with sudden reduction in price •Suppliers were made to bear the losses caused by the reductions

Buyers Power•There is no concept of Brand loyalty•They bargain for the lowest price•Give importance for the culture

Thereat from competitorsCarrefour plan of 300 discount stores

Thereat of new entranceHome world group in northern china

RevelryStrong competition from the local players as the copy the EDLP strategy, and get supplies for low cost

Porter’s 5 Factor analysis

• They opened stores in places like Shanghai, Beijing, Chongquing, Qingdao, Shanyang and Wuhan by convincing the local government like they generate taxes, provide employment and help in overall development

• Acquired small retailers • By the time SETC finding out these violation of laws, Carrefour grown to a

position where they cant be stopped so SETC forced for an agreement. As follows• 35% ownership transferred to the local retailers• The number of holding companies where reduced to 13Government restriction Bijing, Shanghai, Tianjin, Guangzhou, Dalian,

Quingdao, Hainan, ShenzenShantou, Xiamen

4 Key Strategies used in

Second tier Cities and Rural

China :

Choice and Convenience

Price Leadership

Logistics Technology

Localized and training

WALMARTStrategies adopted in

China

35

WALMARTFuture Of Walmart

Expansion in Asian Markets

Expected Surge in Global sales-20 %

India’s Entry Strategy- Joint venture with Bharti Enterprises

37

Home World Group Statement made by Du Sha

Owner Home World Group

In any country you go to the world, it’s a local company which that leads the

industry such as Walmart in the U.S. and Carrefour

in France. In China it won’t be different.

WALMARTDisadvantages to Walmart

Competition from local players, Home world

Group

Advantage to Domestic retailers

Established supply chain network Knowledge of local tastes and preferences Support from Govt. of China

1700 Supermarkets and Hypermarkets Improvement in overall functionalityPoaching of trained workers from foreign chainsLaunch of loyalty programs Private-label products

Local Competitor’s Strategy