What is Wal-Mart

8/2/2019 What is Wal-Mart

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Sams Clubs

W A L * M A R T S T O R E S , I N CA L I N A W A Z S H E I K H

S E R I S H K H A N

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WALMART

Sam Walton started as aspecialty store owner of BenFranklin franchise stores.

He was fortyfour when we

opened first WalMart in 1962.


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What is Wal-Mart

Worlds biggest retailer

Sells Grocery & General Merchandise

One Hour Photo Studio

Pharmacy & Optical Centre

Tire & Lube Express Gasoline station

Fast Food Outlet

Garden Centre

Pet Shop Also feature hair and nail salons, a video rental store, a family

fun center, a branch of a local bank


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Wal-Mart

Mission/

Vision

To give ordinary folk the chance to buy the same thing as rich people.

Product Strategy

1. Lowest prices across-board the product lines2. Product USP: core competency

Low prices, In-stock positions, Customer service

Service Strategy

1. Respect for the individual

2. High standards of service

3. Constant strive for excellence

Segmentationmiddle-class, lower middle

PositioningConsistent positioning- Always low prices

Activities

1. Food retail

2. Non-Food retail

3. On-line food retailer

Intangibles Personalized customer service

Co-branding Co-branding with McDonalds


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Wal-Mart Subsidiaries

Wal-Mart Stores Division US

Wal-Mart Discount Store

Wal-Mart Supercenter Wal-Mart Neighborhood Market

Sams Club

Wal-Mart International

Private Labels (Sams Choice , Great Value ,Equate ,Smart Price)


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Key Statistics on Wal-Mart

Founder Sam Walson & Family owns 40% of Wal-Mart

Headquartered at Bentonville , Arkansas , US

Total No. of Stores 6775 Stores Stores in US 4065 Stores in US

Outside US 2701 Stores in 14 Countries

Total Employees 1.9 Million

Total Sales 415.6 billion in 2011 Net Income 13 billion in 2011


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Wal-Marts growth in last 25 yrs

Diversified into Food & Grocery , Private Labels andonline store.

Wal-Mart online is the e-commerce website. Has started selling online Music and Movies.


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Some interesting figures

First Store opened at Rogers , AR in 1962

Worlds largest Private Employer , fourth only toChinas Army ,NHS of UK, and Indian Railways

Wal-Mart sells 20% of retail grocery in US and 45%of total Toys sold in US.

Its bigger than Europes Carrefour , Tesco & MetroAG combined.


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WALMARTWal*Marts Discount Stores

andSams Legacy

Philosophy

Keep prices below everybody else

Trip expenses cant exceed 1% of thepurchases

Spent lots of time in his own store and

observe competitors

CultureDo not show off buying luxury goods

Success

The way it treated its associates


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andSams Legacy

Management style

Maintain an open-door policy

Empowering associatesMaintain technology superiority

Build loyalty among associates,

customers, and suppliers


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Consumer Global Brand Opportunities: Wal-Mart


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Wal-Mart International

Present in 14 countries

Walmax in Mexico

ASDA in UK The Seiyu Co. Ltd in Japan

Wholly owned subsidiaries inArgentina , Brazil , Canada ,PuertoRico


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Wal-Mart Market Share / Competitors

Wal-Mart is three times big thanits nearest competitor CarrefourSA

z


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Wal-Mart Corporate Values

Constant Improvement

Shared Passion, Vision & Organization Culture

Customer Focus

Speed Execution

Improvements In Basic Operations

Community Involvement


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Strength Weakness

Cost advantage

Low price & customer-oriented

Strong supply chain

People are key to success

Ignore store decoration

Since Wal-Mart sell products

across many sectors (such asclothing, food, or stationary), it

may not have the flexibility of

some of its more focused

competitors.

Opportunity Threat

Build its own brand

Put efforts on social welfare

better image

New locations and store types

Overseas markets

Other competitors

Intense price competition


andSWOT Analysis


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Diversified into Wal-Mart

1. Non-food

Tire & Lube Express, Wal-Mart Optical, Wal-Mart

Pharmacy, Wal-Mart Vacations, Wal-Mart's UsedFixture Auctions

2. Discount format Wal-Mart Stores,

3. E-commerce WalMart.com

4. Wholesale Sams Club

5. Expansion abroad 12 international locations

Sector Strategy: Diversification


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Penetration/ Strategy

Advertising Expenditure : 0.3% Of Sales Rev. Only

- By Word-of-mouth, In-store Promos

Folksy Facade -Friendly Image

Brick & Click Retailing Model Competitive Strategy:

- Pre-emptive Expansion

- Local Retailing Monopoly

- Mkt Penetration By SelectingMost Convenient Locations

Acquired Or Constructed

Global Buying For Relentless Pressure On Prices

Logistic Efficiency: Speed To Market


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Potential Development strategy

Re-positioning: Complete Shopping Experience &Value-for-money Deptt Store Way Beyond Just LowPrices

Enhancing Product Range: Full-line Deptt Store Differentiation: Price-based - Best Quality At The

Charged Price

Merchandising: Max. In-store Merchandise Display

Market-broadening: Store-type Adaptations To LocalCulture

Self-branding: Brand-name Is Extended To PopularItems

Ancillary Business: Hair-cuts, Optics, Hearing aids


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WALMARTDiversification

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Backward Integration

Acquire McLane Company

Texas retail grocery supplier

To service both Sams Clubsand supercenters


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Wal-Mart Failures

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Wall-Mart Failure In Japan

Reasons:

1. Mass firing:It fired 25 percent of headquarters staff,including 1,500 employees and managers, whenit took over Seiyu. This is not a normaloccurrences in Japan.

2. American values:Japanese believe Wal-Mart is trying to forceAmerican values on them, such as mandatingthat stores stay open 24 hours per day.


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Contd.

3. Low-price model:Japanese consumers who want high-qualitygoods are willing to pay high prices for them.

Thus, Wal-Marts low-price model may not bethe best fit for the Japanese market.


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Wall- Mart Failure In Korea

Reasons:

1. Timing and the location selection:Korean consumers prefer shopping in storeswith close proximity. Local rivals had managedto build stores in the early 1990s that had muchhigher store traffic compared to Wal-Mart.

2. Mismatched merchandising, assortment andmarketing:It missed local needs that contributed to Wal-Marts failure in Korea.


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Contd.

3. Effective channel mix organization:

Wal-Mart failed to build a strong alliance withlocal suppliers.

Failed to control all logistic phases, fromsourcing to delivery, which dampened Wal-Marts price competitiveness, which was its corecompetitive advantage in the US market.


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Wall-Mart Problems In China

Reasons:

1. China's distribution sector pose challenges forWal-Mart and its suppliers.

2. Businesses in China still depend heavily on a hard-copy paper flow of documentation, which addscost, requires excess manpower, and createsopportunities for human error


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Contd.

Solution: Overcomingthese challenges through innovative and flexiblesupply chain management and logistics strategies

are vital to Wal-Mart's success in China.


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Recommendation

Understand Consumer behavior

Market Segmentation

Format of stores super centers or hypermarkets

Wal-Mart to adopt a blended model of its traditionalformat tweaked to fit the reality of Indian real estate


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Web References

www.walmartfacts.com www.gartner.com

www.forrester.com

www.hoovers.com www.wikipedia.com

www.tsmg.com (Tata Strategic Management Group)

www.finance.yahoo.com

www.ficci.com
http://www.gartner.com/http://www.forrester.com/http://www.hoovers.com/http://www.wikipedia.com/http://www.tsmg.com/http://www.finance.yahoo.com/http://www.ficci.com/http://www.ficci.com/http://www.finance.yahoo.com/http://www.tsmg.com/http://www.wikipedia.com/http://www.hoovers.com/http://www.forrester.com/http://www.gartner.com/


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Thank You

Documents

What is Wal-Mart