By – Group – 03

Nivedita Bajpai
(19xpgdm09)

Oppiliappa BG

WALMART (19XPgdm10)

Pooja Borah

Stores, inc., (19XPGDM11)

Piyush Sharma
(19XPGDM12)
 AN AMERICAN PUBLIC FOUNDED BY SAM PUBLICLY TRADED
CORPORATION THAT WALTON IN 1962 ON THE NYSE IN
RUNS A CHAIN OF 1972.
LARGE DISCOUNT
DEPARTMENT STORES
& WAREHOUSE

Introduction STORES.

WORLD’S BIGGEST ROE NEVER FALLEN LARGEST PRIVATE

COMPANY IN BELLOW 19%. EMPLOYER IN THE
TERMS OF REVENUE WORLD
SINCE 2000.
 • 1960s
History • Retail Revolution Sam
Walton's strategy was built
on an unshakeable
foundation: The Lowest
Prices Anytime, Anywhere.
• 1962 On July 2, 1962, the
first Walmart store in Rogers,
Ark.
• 1969 The company officially
incorporated as Wal-Mart
Stores, Inc.
• 1970s
• 1970 Walmart became a
publicly traded company.
The first stock was sold at
$16.50 per share.
• 1971 The first distribution
center and Home Office
opened in Bentonville,
Ark.
• 1972 Walmart was listed
on the New York Stock
Exchange (WMT). With 51
stores, Walmart recorded
sales of $78 million
 • 1980s -
History • 1980 Walmart reached $1
(Cont…) billion in annual sales.
• 1983 The first Sam’s Club
opened in Midwest City,
Okla.
• 1990s
• 1991 1 st international
stores in Mexico City (Sam’s
Club Store)
• 1993 Walmart celebrated its
first $1 billion sales week
• 2000s
• 2002 Topped the Fortune
500 ranking of America's
largest companies for the
1st time
• 2014 Doug McMillon
succeeded Mike Duke as
CEO. 2.2 million associates
worldwide; serves >200
million customers each
week at >11,000 stores in
27 countries
Wal-Mart
Store Format
• Sam’s Warehouse Clubs
• Super-Centers

• Neighbourhood Markets
• Express Store
Challenges

• Growing Competition
• Growing Criticism

• Sustainability
• Meeting Size
Solutions
• Increased investment
• Expanding its ranges of Good & Services.

• Minimum starting pay

• Weekly to Monthly Meetings
 Management

Philosophy Style
• Keep prices below everybody else • Maintain an open-door policy
• Trip expenses can’t exceed 1% of the • Empowering associates
purchases
• Maintain technology superiority
• Spent lots of time in his own store and
• Build loyalty among associates,
observe competitors
customers, and suppliers
• Culture
• Promotional strategy
• Do not show off buying luxury goods
• Everyday-low-prices
• Success
• The way it treated its associates
International
Expansions
• International Expansions began in 1991 with joint
ventures.
• Expansion followed a no standard pattern:
• - Greenfield Entry
• - Joint Ventures
• - Acquiring an existing retailer
• In most of the countries Walmart met with varying
degrees of success.
• In Japan , due to profitability elusive , around 30
stores were closed.
• In 2011 , 13 Walmart stores in China was closed.
• In 2015, the CEO Doug McMillon announced to
open 115 more stores in China by 2017.
• In every country , Walmart was forced to adapt the
repsective countries environment.
Sam Walton’s Practices

• Thrift and value for money was a religion.

• He was very economical.
• He used to do detail analysis.
• His priorities laid with employees , customers and operational details.
• Consistently stock the shelves with a wide range of goods at low prices.
• Keeping the stores open later than most other stores.
• Central to his leadership roles was his relationship with his employees.
• Employees followed the “10-foot attitude” pledge and the “Sundown Rule”.
Three basic
beliefs
The three basic beliefs which became
Wallmart’s corporate culture:
Vision and
Mission
Vision and Mission

VISION
To be the best retailer in the hearts and the minds of the consumers and employees.

MISSION
“Everyday Low prices” by “Save money, Live Better”
Business Strategy
 Low cost Leadership strategy:
Walmart’s value proposition is based on offering Everyday
Low Price (EDLP).
 Location Selection :
Walmart focused on rural suburban areas ignored by other
companies.
 Product Selection :
Walmart gives its customers a wide range of selection.
 Customer Service :
Implemented policies to create friendly shopping
environment for customers. Customers were received by
people greeters. Compels its staff to engage in morning
cheers.
Business Segments

 Walmart US :
It is the largest segment and operates retail stores in all 50 stores. Walmart US generated approximately 60% of the net
sales in fiscal 2015.

 Walmart International :
It consists of operations in 26 countries outside US. Walmart International generated approximately 28% of the net sales
in fiscal 2015.

 Sam’s Club:
It consists of membership only warehouse clubs and operates in 48 states in US. Sam’s Club accounted for 2% of the net
sales in fiscal 2015.
 Walmart’s competitive advantage
Competitive Advantage

Cost Advantage Differentiation Advantage

i) Purchasing and Vendor relations i) Marketing and external
relations
ii) Warehousing and distribution ii) Human Resource
management
iii) In-store operations iii) Information technology
iv) Organization and
Management style
Purchasing and vendor relations

• Volume of purchase and Negotiating ability/skills enable Walmart to procure at low cost.
• Centralized purchasing at Bentonville HQ.
• Advantages from supplier side: Easy and quick access to US market
• De-merits from supplier side: Razor thin margins to supplier due to bulk purchase

Walmart Purchasing Strategy:

• Avoid dependence of Individual supplier ( Limits purchases from single source)
• Maintain arms length relationship with supplier
• Suppliers employment and environmental policies were monitored through third party
audits.
Purchasing and vendor relations, contd…

EDI – Electronic data Interchange

• Electronic interface for Vendors – Suppliers can log on to Walmart database
for real time information on sales and inventory of their products.
• This allowed manufacturers and suppliers within supply chain to perform
 Collaborative planning
 Forecasting
 Faster replenishment
 Lower the inventory
 Warehousing and distribution
Distribution strategy and cost reduction in supply chain:
• 82% of Purchases are shipped to own distribution centers & then
distributed to stores
• Million Sq.Ft distribution centers , operating 24 x 7 , serving 75 to 110
stores within 200 mile.
Delivery to stores
(Inbound logistics) Distribution Walmart
Centers Walmart trucks Stores
Supplier trucks Return merchandise

Walmart trucks
Warehousing and distribution, contd…..

Walmarts logistic system for increased speed and efficiency:

1) Cross Docking: Unloading from inbound trucks and reloading to outbound trucks
2) Remix: Use of third party logistics for frequent pick up from suppliers
3) Direct supply from overseas suppliers – better control of import logistics
4) Use of radio frequency identification (RFID) for logistic management and
inventory control.
5) Packing trucks: Maximum capacity utilization
In store operations

Competitive advantage: “Satisfied Customers, getting wide range of quality products at low prices &
pleasing shopping experience”.
STORE MANAGEMENT STRATEGY:
1. Merchandising: Moving from wide range of nationally branded products to increased range of
private labelled products.
2. Decentralization of store management: Individual store managers can decide merchandising and
product positioning within stores & Departmental managers have power to implement own ideas for
boosting sales and cost cutting.
3. Customer service: - Opening Discount stores from 9AM to 9PM on weekdays & shorter on
weekends
- Continuous operation of supercentres
- Greet and Engage customers at personnel level
- “Satisfaction Guaranteed programme” – accepting returns from customer
SWOT ANALYSIS
STRENGTHS:
• Strong market presence
• Value/Low pricing structure
• Supply chain management systems
• Focus on international expansion
• Economies of scale
• Increasing focus on social responsibility
• Easy accessibility of products through large scale sales
SWOT ANALYSIS, Contd…

WEAKNESS:
• Thin profit margins
Opportunities:
• Expansion in developing countries
• Improvement in HR practises to develop competitiveness in labor market
Threats:
• Aggressive competition
• Fast developing online retailers of various sizes
Marketing and External relations

• One boss-Customer
• Cost Reduction of marketing cost from Promotional price cutting to Everyday low
price
• Communication aligned with American virtues-hard work, thrift, individualism,
opportunity, and community.
• Sustainability-Delivering value through Image marketing
• BPR-”Everyday low prices to save money, Live better
Human resource management

• One rank-Associates ( based on respect, high expectations, close communication,

clear incentives)
• Low pay to competitive pay.
• Remove unionization to OUR Walmart.
• Innovation, Collaboration, Transformation, and lots of fun.
Information technology

• First retailers to implement EDI Electronic Data Interchange,

• Own satellite
• Combination of IT with Hub and Spoke in distribution.
• Implemented IT through outsourcing it by having mobile payment platform
CurrentC.
Organization and Management style

• Sam’s Walton’s principles and values –Closely in touch with customers and store
operations.
• Regional VP
What do you think Amazon will look
like 10 years from now?
US Retail Market With Channels in $Bn
4500

4000

3500

3000

2500

2000

1500

1000

500

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2027

Retailing Store based Retailing Non Store Retailing

US Retail Market With Channels in %ge

US Retail Market With Channels in %ge

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2027

Store based Retailing Non Store Retailing

US NON Store Retailing In $Bn
Internet retailing

US NON Store Retailing In $Bn

1800

1600

1400

1200

1000

800

600

400

200

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2027
Market Share Of overall Retailing in US
in %ge Amazon Vs Walmart
Market Share Of overall Retailing in US in %ge
14

12

10

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Walmart Inc. Amazon.com Inc
Market Share of INTERNET Retailing In
US in %ge Amazon Vs Walmart
Market Share of INTERNET Retailing In US in %ge
50

45

40

35

30

25

20

15

10

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Walmart Inc. Amazon.com Inc

Amazon Competitors Financials in $Mn
Vs Walmart

Gross
Company Merchandising Op, Op, Net %ge Net Market
name Revenue Volume Profit Marging Income Income Cap
Walmart Inc. 500343 502343 20437 4.1 9862 1.971% 246148
Amazon.com
Inc 177866 257217 4106 2.3 3033 1.705% 767338
What Amazon is doing?
• Gaining margin by reducing channel like wholesale
and retail by direct delivery,(First party retailer)
• Coming into every channel and business by
grabbing big share in each industry and every
business.
As Is – To Be
after 10 Years
• PP-SS Model
• Pin to Plane and Shoes to Space
• Omni Channel to Omni Products and
Services.

• Amazon Go
• Pharma Industry including AL,IoT with Alexa
• Drone delivery.
• Trying to go to space
• Aquiring FedX to be in logistics business.
• Virtual Delivery Through Amazon People.
• Amazon Prime Aviation.
Threat From Amazon
• Amazon Is ?
1. Range
2. Low Price
3. Delivery
4. Customer data, like preference, choices ,taste ,purchasing capacity
Retailer Will.
1. Increase Store format to make customers come and enjoy shopping
2. Low Price by reducing own margin
3. Increase Range of products
4. In home delivery
5. Retaining customers by having their birthday anniversary data and
wish them of gift on that day.
6. Attaching our store with some E-Commerce company as third party
retailer.