Introduction to Management

ABDULLAH MAQSOOD Reg. # 11

BsBA-DDP 2nd Semester

Sam Walton Founder of Wal*Mart Stores, Inc. 1962 Performance of Wal*Mart 20-year average return on equity of 33% Compound average sales growth of 35% Market value = $57.5 billion
Wal*Mart Sales per square foot Industry average

$300

$210

Key Statistics on Wal-Mart

Founder Sam Walson & Family owns 40% of WalMart Headquartered at Bentonville , Arkansas , US Total No. of Stores 8970 Stores
Stores in US 4065 Stores in US Outside US 2701 Stores in 14 Countries

Total Employees 1.5 Million Total Sales 348.6 billion in 2010 Net Income 11 billion in 2010
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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

Philosophy Keep prices below everybody else Trip expenses cant exceed 1% of the purchases Spent lots of time in his own store and observe competitors Culture Do not show off buying luxury goods Success The way it treated its associates

Wal*Marts Discount Stores and Sams Legacy 7

WALMART

Management style Maintain an open-door policy Empowering associates Maintain technology superiority Build loyalty among associates, customers, and suppliers

Wal*Marts Discount Stores and Sams Legacy 8

WALMART

Marketing slogan Lower price Store managers set up prices 2-4% pricing differential between Wal*Mart and its best competitors in most markets in early 1990s

Wal*Marts Discount Stores and Merchandising 9

WALMART

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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Wal-Mart International
Present in 14 countries Walmax in Mexico ASDA in UK The Seiyu Co. Ltd in Japan Wholly owned subsidiaries in Argentina , Brazil , Canada ,Puerto Rico

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Wal-Mart Market Share / Competitors

Wal-Mart is three times big than its nearest competitor Carrefour SA 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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What Wal-Mart does to achieve those values

Competitively Reduced Cost (Puts All Gains & Savings Into Reducing Prices) Consumer-centric Sales Localization Co-operated Suppliers Retail-tainment & Shop-ability: Aisles, Lighting & Signs Store-manager Autonomy
Cont.
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What Wal-Mart does to achieve those values (Cont.)

One- Stop Shopping Keep Customer Shopping: Added Food & Services Full Stock Register Full Product Line Merchandising Ladder Private Branding

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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 lines 2. 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 middle-class, lower middle Consistent positioning- Always low prices 1. Food retail 2. Non-Food retail 3. On-line food retailer Personalized customer service Co-branding with McDonalds

Segmentation Positioning

Activities

Intangibles Co-branding

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Sector Strategy: Diversification

Diversified into

Wal-Mart
Tire & Lube Express, Wal-Mart Optical, WalMart Pharmacy, Wal-Mart Vacations, WalMart's Used Fixture Auctions

1. Non-food

2. Discount format 3. E-commerce 4. Wholesale 5. Expansion abroad

Wal-Mart Stores, WalMart.com Sams Club 12 international locations

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Consumer Global Brand Opportunities: Wal-Mart

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Supply chain integration in developing countries

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Strength in supply chain

Efficient consumer response Vendor-Managed Inventory Enterprise resource planning Customer relationship management Sales force automation

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SWOT ANALYSIS (GLOBAL)

Strength Efficient supply chain management Targeted marketing Service innovation and technology Growth through adaptability. E-tails continued development Least cost of packaging strong penetration strategies Infrastructure (financial strength)
Opportunity Many countries are still left Unorganized retail Globalization (diminishing trade barriers) Cold Storage market Increase in consumer purchasing power E-business Unemployment

Weakness Poor public image Late entrant in international market. Unable to adapt to different countries Ununionised & Strict labor laws Were unable to handle media High law suits against the company. Low penetration in European union

Threats

Terrorism Competitors Negative publicity International laws against anti dumping Campaign against anti competitive practices
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Present Scenario
Wal-Mart joint venture with Bharti 15 large wholesale outlets over the next seven years Entering as a wholesaler, because Indian law does not allow multi-brand foreign retailers to sell directly to consumers Govt. of U.P forced several top retailers to shut shop after local kirana stores triggered unrest. Other foreign retailers : Carrefour - Wadias ,Debenhams - Future group ICRIER study 12 million stores
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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 traditional format tweaked to fit the reality of Indian real estate

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Environmental Goals

To be supplied by 100% renewable energy

To create zero waste

To sell products that sustain our resources and the environment

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Conclusion:

From the start, they've been committed to doing the right thing. And they've got the policies, programs and practices in place that allows them to use our size and scope to help make a difference

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Q & A Session

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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
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Thank You

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