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Theme: GLOBAL RECESSION WINNING STRATEGIES FOR

INDIAN COMPANIES

Title: WINNING STRATEGIES FOR INDIAN INC-LESSONS FROM McDONALD’S AND WALMART

Presented by :

Shahiba Shamshad & Santhosh Kumar.K

MBA Students,

Department of Management Studies,

Srinivasa Institute of Engg. & Tech.

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WINNING STRATEGIES FOR INDIAN COMPANIES-

LESSONS FROM MCDONALD’S AND

WALMART

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Introduction

Recession is a general slowdown in economic activity in a country over a sustained period of time, or a Business cycle contraction.

As the global economy slowly slides into recession, organizations face new challenges and opportunities. contd

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The goal of strategy in a downturn is to help you end up on the right side of the mortality tables

To build that strategy, you need to know exactly how you plan to win, and how you will mobilize the organization to implement the strategy.

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The Indian companies can learn from those companies which have implemented a strategy which inturn helped them to end up on the right side.

Here we present two organizations such as McDonald’s and WalMart , where they have implemented a strategy which inturn helped them to be relaxed during recession.

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MCDONALD’S

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McDonald’s

McDonald’s Corp. has been one of the world's most successful companies during this recession.

McDonald's has been on a roll since 2003, when, to get out of a slump, it halted rapid expansion and instead focused on improving the food, service, atmosphere and marketing at its existing outlets.

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McDonald’s during Recession In February, McDonald's same-store sales

world-wide increased 5.4%, after stripping out a calendar shift from last year's leap year. By that measure, U.S. same-store sales rose 6.8%, while sales in Europe increased 4% and rose 4.1% in the region that includes Asia Pacific, the Middle East and Africa. Strong U.K. sales were partially offset by Germany, while gains in Australia and Japan were somewhat offset by China. contd

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In India, McDonald’s vow that the slowdown is not bothering them the least. Instead same stores sales have raised 20% y.o.y in January 2009. It is also the secret knowledge that revenues from India are likely to go up soon, than the present 5% to the company’s global revenues. After all, McDonald’s is all set to raise the prices over the next three years, simultaneously marking a shift in its Indian strategy in tune with the times.

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WINNING STRATEGIES OF McDonalds

1.Its effective supply chain management.

2.The change in their menu, image and more importantly their thinking- which is serving them well in these bad times.

3.Not only did the burger company do away super size burgers and include healthy meals to their menu, they also improved their efficiencies. Increasing number of outlets.

4.Creating and marketing lower priced items, adjusting price based on customer demand, added the McCafe and McTreat chains in their portfolio and launched the I’m lovin’ it campaign.

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WALMART

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WALMART

1.WalMart is one of the largest retailer in the world.

2.Walmart has always dwarfed many of its competitors.

3. Wal-Mart isn't just some massive outlet that peddles cheap wares; it has focused on food for a long time, and is really hitting a stride during the recession.

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WALMART DURING RECESSION

The biggest retailer in the world are loving life as the economy sinks.

At a time when companies are cutting costs and jobs to tackle the economic downturn, global retail chain major Wal-Mart has doled out $933.6 million in bonuses to its workers.

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WALMART DURING RECESSION

Wal-Mart reported $401.2 billion in net sales for its most recent fiscal year, which ended on January 31, a gain of 7.2 per cent from the prior year.

Earnings per share rose six per cent to $3.35

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Wal-Mart has doubled its share of the industry’s sales to 16% this year, while increasing its average sale from $489 two years ago to $660.

WALMART DURING RECESSION

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WINNING STRATEGIES OF WALMART "Wal-Mart sells what you need to

have, as opposed to what you want to have“

The main thrust of Wal-Mart’s strategy is what we call as “win, play, or show.”

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WINNING STRATEGIES OF WALMART “Win” categories are those where

Wal-Mart can outmaneuver rivals with low prices on hot products such as flat-screen TVs, including higher-end models.

“Play” applies to areas like apparel where Wal-Mart can be a player but is unlikely to dominate.

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WINNING STRATEGIES OF WALMART Show” are the one-stop-shopping

essentials such as hardware, which are necessary to compete with the likes of Lowe’s (LOW) and Home Depot (HD).

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WHY ONLY WALMART AND McDonald’s

These companies are the only two in the Dow Jones industrial average whose share price rose in 2008 when the stock market lost a third of its value.

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CONCLUSION

In the world of globalization where the economies are integrated we cannot say that a strategies followed by a company in The US is of no use to Indian firms. On the contrary these two companies provide much valuable lessons to Indian companies who are feeling the pain of recession