wal-mart - a case study
TRANSCRIPT
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WAL-MART - a case study
PRESENTED BY
AhmedAtif (2)
Barretto Nereus (6)
Iyer R.K (12)
Jadhav Vishal (13)
Kureshi Mushtaq (26)
SayyedAsif (54)
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Wal-Mart Profile
1st store opened in Rogers, ARKANSAS, 1962
10 years later Annual Sales topped 1 bn$
By Jan 2005, WORLDs Largest Retailer, 288bn$
sales Discount store businessmodel.
Wal-Mart Slogan-
"WAL-MART. ALWAYS LOW PRICE. ALWAYS.|
Wal-Mart Stores Mission Statement:
"WAL-MARTS MISSION IS TO HELP PEOPLE SAVEMONEY SO THEY CAN LIVE BETTER."
SWOTAnalysis
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Some stunning facts aboutWal-Mart
Information Technology employed to power logistics
and supply chain were on par with the systems used
at Pentagon.
Largest privately owned satellite communications
network in the U.S
Largest private sector employer in the world.
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Growing Competition(Intenational Markets)
Maintenance ofTechnologies(Logistics, Aircrafts, SatelliteTelecom)
Network Partnerships
Competitors Expansion Plans
Growing Competition(Intenational Markets)
Maintenance ofTechnologies(Logistics, Aircrafts, SatelliteTelecom)
Network Partnerships
Competitors Expansion Plans
Retail Store Market Share(8.9%)
Network Synchronizing aperGeographic Locations(International Markets)
VirtualAdministartion
Retail Store Market Share(8.9%)
Network Synchronizing aperGeographic Locations(International Markets)
VirtualAdministartion
Target Net income Lag( . / .8)
Shop lifting, Pilferage
Target Net income Lag( . / .8)
Shop lifting, Pilferage
Market Leader, Supermarket Division
Largest Private Sector Employer
Information Technology and SupplyChain & Logistical efficiency
Branded Products Low cost andEconomies of Scale forOperations
SamWalton and Financial muscle toenter new markets
Market Leader, Supermarket Division
Largest Private Sector Employer
Information Technology and SupplyChain & Logistical efficiency
Branded Products Low cost andEconomies of Scale forOperations
SamWalton and Financial muscle toenter new markets
Strength Weakness
ThreatsOpportunities
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PESTLEAnalysis
Political : Entry into new markets restricted by
FDI norms.
Economical : Macro Economic fears Social : Bad press received sinceWalMart
blamed for cutting out small retailers
Technological : Hig
hinvest
ment in tec
hnology
Environmental :
Legal : FDI norms and foreign laws
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Problem Identification Sustenance of
being th
e Market Leader Find new avenues of growth
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Trouble Shooting
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Strategic Model Best Efficient Operations
(Time Constrained)
Supply Chain & Logistics Efficiency, Real-time Replenishment Strategy,Cross-docking and Distribution efficiency.
HR Strategy- Frugality (Wal-Mart Culture), Profit Sharing, E-sops, Result-
orientedAppraisal Strategy.
Marketing Strategy Everyday Low price
Information Strategy State of art technology acquisition and Deployment
extended to suppliers
Procurement Strategy Not Over-Dependent (not >4 % ) total Sales from
single supplier, N/w development, Economies of Scale.
Custom
er Satisfaction Strategy 10 Foot attitude.
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Data & Supporting ClaimsCOMPETITIVE FINANCIAL DATA ON SELECTED COMPANIES
Five YearAverage: 1999-2004
Wal-Mart Home Depot Kroger Costco Target
Return on Equity (%) 21.1 19.7 20.1 13.4 17.3
Sales Growth (%) 11.6 13.7 4.5 11.9 6.8
Operating Income Growth (%) 11.1 15.9 -13.8 10 13.3
2004 Data
Sales ($Bn) 288.2 73.1 56.4 48.1 46.8
As % of Sales:
COG
S 76.3 66.6 74.7 87.5 68.7Gross Margin 22.7 33.4 25.3 12.5 31.3
Selling &Administration 17.8 22.6 20 9.6 20.9
Operating Income 5.9 10.8 1.5 2.9 7.7
Net Income 3.6 6.8 -0.2 1.8 6.8
Inventory T.O 7.5 4.8 9.8 11.3 5.9
Return On Equity (%) 23.2 22.1 -2.5 12.8 15.6
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0 5 10 15 20 25
Wal-Mart
Home Depot
Kroger
Costco
Target
Return on Equity (%)
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-10
0
10
20
30
40
50
60
70
80
0
Wal-Mart Home Depot Kroger Costco Target
Chart Title
COGS
Gross Margin
Selling & Administration
Operating Income
Net Income
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0
2
4
6
8
10
12
Wal-Mart Home Depot Kroger Costco Target
Inventory T.O
Inventory T.O
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Interpretation &Analysis
Enjoys comfortable position in current
scenario in US retail market
Em
ploys ah
uge network of people andInformations systems for proper functioning.
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Conclusion
Needs to find different avenues for sustaining
mission of low price.
Com
petitionm
ay em
ploy strategies used byWalmart
Need to expand in new markets.
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Recommendation
Focus on associates.
Employ the use of local retailers so as to help
build its im
age. Heavy reliance on information technology can
lead to system breakdowns if proper actions
mitigating risks are not undertaken.
Move from LOW PRICE strategy to GREAT
QUALITYATTHE BEST PRICES.