CORPORATE FINANCE | SUBMITtED to MS.

NABEELA NAEEM

Overview:

Walmart, is an American multinational retail corporation

that operates a chain of discount department stores and warehouse stores.
Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton
in 1962 and incorporated on October 31, 1969. It has over 11,000 stores in 27
countries, under a total 71 different brands. The company operates under the
Walmart name in the US and Puerto Rico, It operates in many different countries
with different names. . The revenue was reportedly US$ 476.294 billion in 2013
which makes Walmart one of the most successful and truly and American giant.

Business Model:

Wal-Mart stresses primarily on their Everyday

Low prices (EDLP) pricing philosophy, in which their price items at a low price
every day that builds & maintains customers trust in their pricing. Since they
employ both the clicks and bricks and bricks and mortar methods to market
their products, consumers get to choose their products either the traditional way or
online anytime of the day. Though Wal-Mart has not advertised in Advertising, as
many of its competitors do, the trust people have built on the Wal-Mart brand has
taken them far from their competitors. The reason of Wal-Mart success is its
massive network and strong logistics and channel management, Wal-Mart also uses
the most enhanced and smart inventory management system that runs on the most
expensive and powerful system named MPP (Massively Parallel Processor) with also
the first one to use the RFID system in inventory management makes Wal-Mart
stand out against others.
B2B Single firm network Business Model: SAMS CLUB segment of Wal-Mart
supports small businesses. Its main focus in this segment is to create its own
network of trusted partners to coordinate supply chains and provide exceptional
value on brand-name merchandise at Members Only prices.
B2C E-Tailor Business Model: Wal-Mart uses clicks and bricks methodology to
provide millions of its customers online version of its retail store,
Walmart combines a Cost-Leadership and Differentiation strategies because:
I.
II.
III.
IV.
V.

Allowed to achieve a large scale and an efficient supply chain.

Has its own low-cost brands, like Great Value.
A unique cost structure that allows Walmart to establish the lowest prices
and achieve competitive advantage. (Best value/price combination)
Present in many different industries and markets with efficient distribution
channels.
Very difficult strategy to imitate by offering a broad quantity of products at
a low price.

Broad

Cost
Leadership

Differentiati
on

SCOP
Cost Focus
Narrow

Differentiati
on Focus

Ownership Structure
Differentiatio
Walmart was founded by Sam WaltonCost
and who owned
the major stake in the
company, despite his death in 1992 the Walton family still owns the Walmart
Sources of Competetive
at large and is wealthier than the Top billionaire like Bill Gates. The
percentage of Waltons ownership is above 50%. As of Today three family
members serve on Walmart's board of directors; Rob is the chair, and sits on the
board with his brother Jim and his son-in-law, Greg Penner, whereas the current CEO
and President is Doug McMillon.

Direct Shareholders

Institutional Shareholders
Vanguard, SSC and Berkshire Hathway hold the most part of the institutional
stocks.

Source: Business Management, Wikipedia, SlideShare, Google, Yahoo Finance, Walmart Inc.