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BUSINESS STRATEGIES OF WAL-MART

Presented By-
Sanjeev Kumar Nayak
CONTENT

 Company Profile
 SWOT Analysis
 Cost Leadership Strategy
 Wal-Mart’s Aggressive Pricing
 Marketing Strategy
 Wal-Mart Customer Service
 Wal-Mart Growth Strategy
 Conclusion
COMPANY OVERVIEW
 Wal-Mart was established in 1969.

 Wal-Mart Stores operates retail stores in


various formats across the world.

 In the US, the retail formats operated by Wal-


Mart include discount stores, supercentres,
market side, and Sam's Clubs.
 Internationally, the company operates in
Argentina, Canada, China, Brazil,India,UK etc.
• Currently it employs 2.1 million people in US.

 The company recorded revenues of $400000


million during the financial year ended 2009, an
increase of 7.1% over 2008.
 The operating profit of Wal-Mart during FY2009
was $22,798 million, an increase of 3.6% from
2008.
BUSINESS DESCRIPTION
 Wal-Mart is the largest retail company in the
world.
 It operates retail stores in various formats
worldwide. Wal-Mart offers a wide assortment
of merchandise at every day low prices in its
retail stores.
 e-commerce websites services.
 It has three business segments:Walmart US,
Sam's Club, and the international segment.
 The segment has retail operation in all the 50
states in the US.Wal-Mart operates 891 discount
stores and 2,612 supercenters.
 To support the retail operations of the Walmart US
segment, Wal-Mart operates 121 distribution the
company owns 106; the remaining are owned and
operated by third parties.
2ND SEGMENT - SAM’S CLUB
 Sam’s Club operates Wal-Mart’s warehouse
membership clubs in the US.
 Wal-Mart operates 602 Sam's Club in 48 US
states.
 It offers bulk displays of brand name
merchandise including hard goods, some soft
goods, institutional-size grocery items.
 Sam's Club warehouses offer photo
processing services, pharmaceuticals,optical
departments and gasoline stations.
3RD SEGMENT –INTERNATIONAL
SEGMENT

 The international segment comprises wholly


owned subsidiaries operating in Argentina,
Brazil, Canada, Japan.

 Wal-Mart utilizes a total of 146 distribution


 facilities located in Argentina, Brazil, Canada.

 During FY2009, approximately 74% of the


international segment’s purchases were
shipped from these distribution facilities.
MAJOR PRODUCTS & SERVICES
 Products:
 Dry and wet grocery,Beverages,Frozen foods,
Shoes, Jewellery, Toys,etc.
 Services:

 Photo processing services, Cellular service plan,


Money order services.
 Brands:

 Wal-Mart, Great Value, Sam’s Choice


COMPETITORS
 Tesco PLC
 Metro AG

 Amazon.com, Inc.

 CVS Caremark Corporation

 Staples, Inc.
SWOT ANALYSIS OF WAL- MART
STRENGTHS:

 Wal-Mart is a powerful retail brand. It has a reputation for


value for money, convenience and a wide range of products
all in one store.

 Wal-Mart has grown substantially over recent years, and


has experienced global expansion (for example its purchase
of the United Kingdom based retailer ASDA).

 The company has a core competence involving its use of


information technology to support its international logistics
system.

 A focused strategy is in place for human resource


management and development.
WEAKNESSES:

 Wal-Mart is the World's largest grocery retailer


and control of its empire, despite its IT
advantages, could leave it weak in some areas
due to the huge span of control.
 Since Wal-Mart sell products across many sectors
(such as clothing, food, or stationary), it may not
have the flexibility of some of its more focused
competitors.
 The company is global, but has has a presence in
relatively few countries Worldwide.
OPPORTUNITIES:

 To take over, merge with, or form strategic alliances with other global
retailers, focusing on specific markets such as Europe or the Greater China
Region.

 The stores are currently only trade in a relatively small number of countries.
Therefore there are tremendous opportunities for future business in
expanding consumer markets, such as China and India.

 New locations and store types offer Wal-Mart opportunities to exploit


market development. They diversified from large super centres, to local and
mall-based sites.

 Opportunities exist for Wal-Mart to continue with its current strategy of


large, super centres.
THREATS:

 Being number one means that they are the target of


competition, locally and globally.
 Being a global retailer means that they are exposed
to political problems in the countries that you operate
in.

 The cost of producing many consumer products tends


to have fallen because of lower manufacturing costs.
Manufacturing cost have fallen due to outsourcing to
low-cost regions of the World.
This has lead to price competition, resulting in price
deflation in some ranges. Intense price competition is
a threat.
COST LEADERSHIP STRATEGY
 It is the world's largest public corporation by revenue
 dominant player in the retailing industry
 became successful by rigorously pursuing its core
philosophy of cost leadership
 strategy of establishing discount stores in smaller towns
and capturing significant market share.
 growth in the 1980s by using information technology (IT) to
manage its supply chain and by expanding business in
bigger metropolitan cities.
 In the late 1980s, it ventured into food retailing by
introducing Supercenters
 In the late 1990s, Wal-Mart launched exclusive
groceries/drug stores known as "neighborhood markets"
WAL-MART'S AGGRESSIVE PRICING
 Mission ” to provide a wide variety of high quality,
branded and unbranded products at the lowest
possible price”.
 efforts to procure products at the lowest prices
possible from manufacturers.
 Wal-Mart's products are usually priced 20% lower than
those of its competitors
 generate more profits due to larger volumes.
 surplus generated was reinvested in building
facilities(modern equipment, latest technology) of an
efficient scale
 Wal-Mart imposes a strict control on its overhead costs
 The stores are set up in large buildings, while ensuring
that the rent paid was minimal.
MARKETING STRATEGIES
 Wal-Mart's marketing strategies are based upon a set of two
main objectives
 The customer is featured in the first objective; "Customers
would be provided what they want, when they want it, all at a
value".
 Team spirit was featured in the second objective, "Treating
each other as we would hope to be treated acknowledging
our total dependency on our associate - partners to sustain
our success".
 They also tailor their merchandise assortment and store
experience to meet the specific needs of a broader customer
base
 Currently, Wal-Mart's has created over 125,000 new jobs and
the operation of over 3,000 international stores, buying
products from 70 countries
CONTD.
 Over sixty percent of Wal-Mart sells came from the
middle income families
 The use of customer data has allowed for an
increase in segmentation in order to better server
the customer
 The use of radio frequency id tags and electronic
check conversion has improved inventory
management and reduced cost
 Promotional strategy implementation has seen
continued lowered cost and delivery of products and
services with minimal difficulty or inconvenience
WAL-MART CUSTOMER SERVICE
 Wal-Mart’s key to success is that it thinks like the
customer, give a good value in product for the
customer, sell the customer what he or she really
wants to buy, exceeds the customer’s expectation
and ensures that the customer enjoy themselves
in the process.
 Wal-Mart’s customer strategy is to have almost
every aspect of their business centered on its
customer
 Wal-Mart handles their customer’s complaints in a
fast and friendly manner.
WAL-MART GROWTH STRATEGY
 At present, the most important goal for Wal-Mart is
to maintain their current net sales growth of
approximately 12 percent per year.
 expand into international markets that have large
population centers.
 increasing the overall efficiency of the organization
by reducing operating costs or cost of goods sold.
 In the area of human capital, Wal-Mart has no
unions, pays low wages, and relies heavily on part-
time and temporary help.
CONCLUSION
 Their strategy is to give their customers
everything: a wide assortment of good quality
merchandise at the lowest possible price. And
their policies include guaranteed satisfaction with
what you buy; friendly, knowledgeable service;
convenient hours; free parking; a pleasant
shopping experience.