Walmart PPT

PPT of Walmart- History- Strategy- SWOT- Retail Marketing

1. 1
Presentation on

2. Presented by
Abu MotaharMohammad Sohel
ZR 1302025
Md. Mahbub-Ur-Rahman
ZR 1103019
Md. Hafiz-Al-Asad
ZR 1401003
2

3. Sequence of Presentation
1
•Introduction to Wal-Mart.
2
•History of Wal-Mart.
3
•Business Description & Competitors.
4
•Vision, Mission and Values.
5
•Corporate Strategy.
6
•Competitive Strategy.
3

4. Sequence of Presentation
7
•Business Strategy.
8
•SWOT Analysis.
9
•Five Forces Model.
10
•SCM at Walmart.
11
•Key Success Factors.
12
•Criticism of Walmart.
4

5. Introduction to Walmart
•AnAmericanpubliccorporationthatrunsachainof
largediscountdepartmentstores&warehousestores.
•World'slargestpubliccorporationbyrevenue.
•Largestprivateemployerintheworld.
•Fourthlargestutilityorcommercialemployer.
•LargestgroceryretailerintheUnitedStates(20%).
•LargesttoysellerintheUnitedStates(22%).
•World’sbiggestretailer.
5

6. Walmart at a Glance
•Founded : Arkansas, USA (1962) by Sam Walton.
•Headquarters: Bentonville, Arkansas, U.S.A.
6

7. Walmart at a Glance
•Products: Discount Stores, Super centers, Neighborhood Markets.
7

8. Walmart at a Glance
•Revenue : US$ 485.65 billion (Jan 31, 2015).
•Net Income: US$ 16.36 billion (Jan 31, 2015).
•Total Assets: US$ 204.75 billion (2014).
•Total Equity: US$ 76.25 billion (2014).
8

9. Walmart at a Glance
9

10. Walmart at a Glance
Slogans:
oThe Lowest Prices. Guaranteed!
oSave Money, Live Better
oWe Sell For Less Everyday!
10

11. Company Overview
•FoundedbySamWaltonin1962
•IncorporatedonOctober31,1969.
•PubliclytradedontheNewYork
StockExchangein1972.
•Walmartoperateretailstoresin
variousformatsacrosstheworld.
11

12. 12 Company Overview

13. 13
As of April 30, 2014: 10,994
oWalmart US –4,233
oSam’s Club –635
oInternational –6,126
Company Overview

14. History of Walmart
o1918: Born in a farmer’s family in Kingfisher, Oklahoma.
o1940: Graduated from the University of Missouri.
o1950: Gave up job and opened his first store in Arkansas.
o1962: WaltenBrothers opened fist Walmart in Arkansas.
14

15. •1970: Walmart became public.
•1990: 1
st
National retailer.
•1991: International Expansion.
15History of Walmart

16. o1993: Creation of “Great Value”.
o2003: Largest corporation in the world.
o2012: 50
th
Anniversary.
16History of Walmart

17. Business Description
•Dry and wet grocery
•Beverages
•Frozen food
•Jewelry etc.
Products
•Photo processing service
•Cellular service plan
•Money order services
Services
•Walmart
•Great value
•Sam’s choice
Brands
17

18. Competitors
Tesco
PLC
Metro
AG
Amazon
Inc
CVS
Care
mark
Staples
Inc
18

19. Competitors19

20. Competitors20

21. Vision
“To be the best retailer in the hearts and minds of
consumers and employees.”
21

22. Mission
“Saving people money so they can live better.”
22

23. Slogan
Save Money. Live better.
23

24. Values of Walmart
Integrity Opportunity
Family and
Community
Purpose Responsibility
24

25. Md. Mahbub-Ur-Rahman25
Corporate Strategy
Competitive Strategy
Business Strategy

26. The Corporate Strategy
Dominance in the Retail Market.
26

27. The Corporate Strategy
Expansion in the U.S. and International Markets.
27

28. The Corporate Strategy
Creation of Positive Brand and Company Recognition.
28

29. The Corporate Strategy
Branch Out into New Sectors of Retail.
29

30. The Corporate Strategy
Sam Walton gave 3 Policy Goalsto define Wal-Mart's business:
Respect for
the
Individual
Service to
Customers
Strive for
Excellence
30

31. Sam Walton’s Practices
•Consistentlystocktheshelveswitha
widerangeofgoodsatlowprices.
•Keepthestoreopenlaterthanmost
otherstores,especiallyduringthe
Christmasseason.
•DiscountMerchandising.
oBuywholesalegoodsfromthelowest
pricedsupplier.
oPassonthesavingstothecustomer.
31

32. Strategic Goals
ThreesuccessfulelementsandafourthelementofWalmart
strategyformulation:
1.DominatetheRetailMarketwhereverWal-Marthasa
presence.
•Wal-Martisprimarilyadiscountretailer.
•Loweringthemarkup,andearnprofitonthe
increasedvolumeofsales.
•Competitivenessofeveryunit.
32

33. Strategic Goals
2.GrowthbyexpansionintheUSandInternationally.
•GainentryintoanationbyCorporateTakeoverofa
nationalretailer.Oncethecompanyisbought,Wal-
MartconvertsthestoresintoWal-Martstores.
3.Createwidespreadnamerecognitionandcustomer
satisfactionwiththeWal-Martbrand,andassociatethe
retailerwiththereputationofofferingthebestprices.
•Thecompanyaccomplishesthisthroughtelevision
advertisingcampaignsandnewspaperadverts.
•Thecompanyengagesinpartnershipsandco-
branding.
33

34. Strategic Goals
4.Branchingoutintonewsectorsofretailingsuchas
pharmacies,automotiverepair,andgrocerysales.
•Moveintothegrocerystorebusinesswithitsnew
"NeighborhoodMarkets."
34

35. Competitive Strategy
•LowCostLeadership.The
giantretailerpridesitselfon
providingcustomerswithlow-cost
itemsthatbeatcompetitors.
•DifferentiationStrategy.Wal-
Martusesthedifferentiationstrategy
tosucceedbycreatingaproductor
serviceuniquetocustomers.Wal-
Marthasachievedthisstrategyby
offeringuniquewarrantiesand
brandimagesexclusivetothe
store.
35

36. Competitive Strategy
•Thecompany'scompetitivestrategyistodominateevery
sectorwhereitdoesbusiness.
•Itmeasuressuccessintermsofsailsanddominanceover
competitors.
•Sellgoodsatlowprices,outsellcompetitors,andtoexpand.
•Tobuildmorestores,makeexistingstoresbigger,andto
expandintoothersectorsofretail.
•Everystepoftheway,itstrivestomakemoneyanddominate
itscompetitors,tothepointofputtingsomecompetitorsout
ofbusiness.
36

37. Business Strategy
•LowCostLeadershipStrategy:Walmart’svalue
propositionisbasedonofferingEverydayLowPrice(EDLP).
ThisisthecoreofWalmart’sBusinessModelandtherestof
thekeyfeaturesofWalmart’sBusinessModelarealignedto
keeptheeverydaylowprice.
•PressureOverVendors:Todeliverlowprice,Walmart
exchangesinformationonsalesandinventorylevelsbased
on“VendorPartnership”concept.Ithasitsowndistribution
channelwhichisamajordistributionchannelformany
vendors.
37

38. Business Strategy
InvestmentinTechnology:
Walmartinvestedheavilyontechnology
tohelpenhancecommunication
betweenheadquarters,stores,and
vendors.Asaresultinventorycosts
decreasedandinboundlogistics
becamemoreefficient.
HumanResourcePolicy:Walmart
wasrecognizedasoneamong100best
companiestoworkforinAmerica.It
usedtoofferapercentageofstoreprofit
asincentivestostoremanagers.
38

39. Business Strategy
LocationSelection:Walmart
focusedonruralsuburbanareas
ignoredby othercompanies.
Establishingstoresclosetodistribution
center,itdevelopedadensedistribution
networkthatallowedthefirmtospread
costsandexploiteconomiesofdensity.
ProductSelection:Walmartgives
itscustomersawiderangeof
selection.Itoffersgroceryitemsin
supercenters.Sam’sclubcaterstothe
wholesalepurchaseneedofcustomers.
39

40. Business Strategy
CostConsciousness:Walmartdevelopedacost
consciouscultureforthecompanytoreducecosts
wheneverpossible.Itcontrolledcostsbysystematic
eliminationofsuperfluousexpenses.
CustomerService:Walmartimplementedpoliciesto
createfriendlyshoppingenvironmentforcustomers.Itstarted
its“AggressiveHospitality”programin1984,where
customerswerereceivedby“peoplegreeters”andthey
enjoyedbenefitssuchasextendedopeninghours,free
parking,nohasslerefundandexchangepolicies,speedy
checkoutlanes,wideraisles,andcleanstores.
40

41. Practices Followed
•Aggressive Hospitality.
oUsing door-greeters.
oPatriotic themes and displays in stores.
oCompels its staff to engage in morning cheers.
41

42. Practices Followed
•AffiliationswithCharities.TheUnited
WayandChildren'sMiracleNetwork.
•Sundown Rule.Allcustomerand
supplierrequestsorqueriesmustbe
reasonablyansweredwithin24hoursby
allemployees.
•Ten Foot Rule. Store employees must
greet, smile, and attend to a customer in
a store when within 10 feet of them.
42

43. Business Strategy
•Thecompanyusesitssize,financial
power,immense resourcesto
dominateretail.
•Thepowerandsizeofthecompany
enablesittorealizeitsgoalswith
ruthlessefficiency.
•Thestrategyisveryclearand
direct.Itwasputintoplaceinthe
1960'sbySamWalton,andrefined
overthedecades.
43

44. Walmart Growth Strategy
Maintaincurrentnetsalesgrowthof
approximately12percentperyear.
Expandintointernationalmarketsthathave
largepopulationcenters.
Increasingtheoverallefficiencyofthe
organizationbyreducingoperatingcostsor
costofgoodssold.
44

45. Md. Hafiz-Al-Asad45
SWOT
Analysis
Five Forces
Model
SCM at
Walmart
Key Success
Factors
Criticism of
Walmart

46. SWOT Analysis
Strengths
•Powerful retail brands, large
scale of operation worldwide.
•One Stop Retail.
•Strategic business programs.
•Efficient working capital
management.
Weakness
•Self Cannibalization.
•Involvement in numerous legal
issues.
•Continuous product recall.
•Community relations problem.
Opportunity
•Global food safety initiative
standard.
•Increasing demand of online
sales.
•Increasing opportunity in
growing economy.
Threats
•Intense competition.
•Price matching program by
target.
•Foreign currency fluctuation.
46

47. Five Forces Model47

48. Five Forces Model
1.BargainingPowerofCustomers:Low.
48
oCustomers usually make small purchases.
oA large number of customers.
oWal-Mart’s main customers are individuals.

49. Five Forces Model
2.BargainingPowerofSuppliers:Medium-Low.
49
oWal-Martpurchaseshugequantitiesof
productsfromitssuppliers.
oLowswitchingcostsfromonesupplierto
another.
oProductshavealotofsubstitutes.
oAlmostalltheproductsarenotcriticalfor
Wal-Mart.

50. Five Forces Model
3.PotentialEntrants/BarrierstoEntry:Medium-High.
50
oEconomiesofscale.
oHighcapitalrequirements.
oCustomersmainlylookforproductswith
lowpricesandstandardquality.
oRequiresaprecisedistributionsystem.

51. Five Forces Model
4.ThreatofSubstitutes:High.
51
oPricesandqualityofsubstituteproducts
areverycompetitive.
oPerformanceofsubstituteproductsare
similar.
oConsumerswitchingcostsarelow.

52. Five Forces Model
5. Potential Competitors/ Rivalry: High.
52
oWal-Martrepresentsthe25%shareof
theU.S.supermarketbusiness.
oCompetitorshavesimilarsizes.
oIndustrygrowthisslow.
oExitbarriersarehigh.
oThereisahighproductioncapacity.

53. Supply Chain Management at Walmart
Relationship with
Suppliers
Use of Cutting Edge
Technology
Strengths of SCM
53

54. Relationship with Suppliers
•Scaleofoperationhelpstobargainwith
supplierstogetthebottomprices.
•Procurementpersonnelspendalotoftimewith
thevendorstounderstandtheircoststructures
andtogettheminimumpriceinawin-win
situation.
•Encourageditsvendorstocontributeideas
abouthowtomakeitsstoresmoreattractive
withtheirproducts.
•Vendorswereencouragedtovoiceanyproblems
intheirrelationshipwithWalmartandtobecome
involvedinWalmart’sfutureplan.
54

55. Use of Cutting Edge Technology
•Probing,testingandthendeployingthenewest
equipment,retailingtechniques,computer
softwareprogrametc.toincreasedproductivity
anddrivecostsdown.
55
Introducing it's
“WAVE”
Technology
Truck System

56. Use of Cutting Edge Technology
•SophisticatedITandonlinecapabilityforreal-timeaccessto
detailedfiguresonmostoperations.
•Trackingcapabilityofit’sgoodsmovementthroughitsentirevalue
chain.
56

57. Use of Cutting Edge Technology
•WalmarthasDataSharingSystemsandRetailLinkSystemwith
30,000suppliers,whichallowthemtoavoidbothstockoutsand
carryingexcessinventories,identifyingslow-sellingitemsto
reducecosts.
57
•Thecompanyhasmore
than88,000associates
engagedinlogisticsand
information systems
activitiesforeffective
andefficientsupply
chainmanagement.

58. Use of Cutting Edge Technology
•WalmarthasintroducedElectronicProductCode(EPC)and
Radio-frequencyIdentification(RFID)systems.Withthehelpof
EPCandRFID,thecompanycantrackmovementofanyitemsin
realtime.
58
Apparel supervisor Sonia Barrett uses a handheld
scanner to read EPC labels on men's denim jeans

59. Strengths of SCM
Vendor-
Managed
Inventory
(VMI)
Enterprise
Resource
Planning
(ERP)
Customer
Relationship
Management
(CRM)
Sales Force
Automation
59

60. Key Success Factors
Economies of
Scale
Supply Chain
with
Integrated
Technology
Superior
Logistics
Systems
Decentralized
Operations
Every Day
Low Prices
60

61. Criticism of Walmart61

62. Opposition from Local Communities:
•LocalcommunitiestrytoopposetheconstructionwhenWalmart
plansnewstorelocations.Opponentsciteconcernssuchas
trafficcongestion,environmentproblems,publicsafety,absentee
landlordism,badpublicrelations,lowwagesandbenefitsetc.
Criticism of Walmart62
Ananti-Walmartsignon
thefrontlawnofaBallston
Spahome.

63. PredatoryPricing:
Walmarthasbeenaccusedof
sellingmerchandiseatsuchlow
coststhatcompetitorshave
triedtosueitforpredatory
pricing(intentionallysellinga
productatlowcostinorderto
drivecompetitorsoutofthe
market).
Criticism of Walmart63

64. Criticism of Walmart
Employee & Labor Relations:
•Withcloseto2.2millionemployeesworldwide,Walmarthas
facedatorrentoflawsuitsandissueswithregardstoits
workforce.Theseissuesinvolvelowwages,poorworking
conditions,inadequatehealthcare,aswellasissues
involvingthecompany'sstronganti-unionpolicies.
64

65. Criticism of Walmart
Low Wages:
•Walmartreportsthatfull-time
hourlyassociatesreceived,on
average,$10.11anhour.“,which
isabout20%lessthanthe
averageretailworker.
•BecauseWalmartemployspart-
timeandrelativelylowpaid
workers,someworkersmay
partiallyqualifyforstatewelfare
programs.Thishasledcriticsto
claimthatWalmartincreasesthe
burdenontaxpayer-funded
services.
65

66. Criticism of Walmart
WorkingConditions:
•Walmarthasalsofaced
accusationsinvolvingpoor
workingconditionsofits
employees.
•Walmarthasalsobeen
accusedofethicalproblems.
ItissaidthattheWalmart
employees aregender
discriminatedwhentryingto
behiredanddiscriminated
againstintheworkarea.
66

67. Criticism of Walmart
HealthInsurance:
•Walmartspendsanaverage
of$3,500peremployeefor
healthcare,27%lessthan
theretail-industryaverageof
$4,800.
•Walmart'shealthinsurance
covered 44% or
approximately572,000ofits
1.3millionU.S.workers.
67

68. Criticism of Walmart
Anti-Labor Union Policies:
•Walmarthasbeencriticizedforits
policiesagainstlaborunions.
Criticsblameworkers'reluctanceto
jointhelaboruniononWalmartanti-
uniontacticssuchasmanagerial
surveillanceandpre-emptiveclosures
ofstoresordepartmentswhochoose
tounionize.
68

69. Criticism of Walmart
Imports and Bargaining Power:
•Asalargecustomertomostofits
vendors,Walmartopenlyuses
itsbargainingpowertobring
lowerpricestoattractits
customers.
•Thecompanynegotiateslower
pricesfromvendors.Ifavendor
doesnotkeeppricescompetitive
withothersuppliers,theyrisk
havingtheirbrandremoved
fromWalmart'sshelvesinfavor
ofalower-pricedcompetitor.
69

70. Criticism of Walmart
AllegationsofBribery:
WalmartMéxico,itssubsidiary
inthatcountry,hadpaid
millionsofdollarsinbribesto
localofficialstoexpeditepermits
forconstructionandoperationof
itsmanystoresinthatcountry.
70

71. Criticism of Walmart71

72. 72