Contents of the report

Introduction of Walmart Key Statistics on Walmart Case Objectives Walmart Case Abstract Case Questions and Answers

An Inroduction to WALMART

Introduction to WALMART
Wal-Mart is the worlds largest corporation (Fortune, 2003). Wal-Mart is U.S.A.s biggest seller of DVDs, diamonds, groceries, toys, guns, CDs, apparel, dog food, detergent, , sporting goods, videogames, socks, bedding, and largest film developer, optician, private truck fleet operator, energy consumer, and real estate developer Wal-Mart has four large scale retail formats; Wal-Mart Stores, SAMs Club, Wal-Mart Supercenters and Neighborhood Markets No.1 rank in total sales and most powerful corporation in the world. 8,446 stores and club locations in 15 countries employ more than 2.1million associates, serving more than 176 million customers a year.

Key Statistics on Wal-Mart

Founder Sam Walson & Family owns 40% of Wal-Mart Headquartered at Bentonville , Arkansas , US Total No. of Stores 8446 Stores Stores in US 4381 Stores in US Outside US 4065 Stores in 14 Countries Total Employees 1.9 Million Total Sales 348.6 billion in 2008 Net Income 11 billion in 2008

Growth in Retail Industry

In Fiscal Year (FY) 1996 to FY 1997, sales increased only12.4%. Sales for FY 1990 $32,601,000,000increased to$117,958,000, 000. The increase was $85,357,000,000 (o r 261.8%).

Kmart had sales of $32,183,000 and sales of$32,070,000 in FY 1990. Kmart sales decreased by <$113,000,000> while WalMart sales increased by $85,357,000,000 for the eight FYs (1990-1997)

Walmart Case Abstract

 Wal-Mart Stores, Inc., in 1998, with corporate headquarters in Bentonville, Arkansas, was not only the nations largest discount department store chain but also had surpassed Sears. A major concern was Wal-Marts spectacular growth and the dominance of the firm in the market. What makes this situation unique is that the discount department store industry was perceived as being at maturity. The industry faced increased competition, leveling of sales, moderate profits by surviving firms, over-stored markets, and more complex operations problems than previously. Another concern: what of Wal-Mart without Sam Walton? A new president and chief executive officer was in place. Management claimed: Theres no transition to make because the principles and the basic values [Sam Walton] used in founding this company were so sound and so universally accepted." Senior management felt that the firm could continue to maintain its blistering growth pace by "outmaneuvering the competition with innovative retailing concepts.

Question and Answers of the case

Question 1: Identify and evaluate the marketing strategies that Wal-Mart pursued to maintain its growth and marketing leadership position. What factors should a firm consider in the development of its marketing strategy?

Efficient supply chain , Distribution Centers locations, Inventory control system by using information technology and Internet Sales Promotion , The development of a human relation/human resource base corporate culture linked to the satisfaction of consumer needs and wants in the marketplace. The team spirit, employees as "associates," training programs, Saturday morning meetings, stock ownership, and profit-sharing programs are part of this plan. Market segmentation/target market positioning strategy of operating a discount store in small communities, offering name-brand merchandise at "everyday low prices" and offering friendly service. Market dominance strategy of first opening a distribution center, dominating a market area with Wal-Mart stores, and then growing by expanding to contiguous areas.

 Offering a wide variety of general merchandise to the customer in 36 different departments with specialty centers at some locations. Developing a competitive differential advantage by being able to "strike a delicate balance needed to convince [Wal-Mart] prices were low without making people feel that its stores were too cheap." People greeters, paper sacks, warm colors, wide aisles were considered part of this strategy. Liberal refund and exchange policies were part of a "Satisfaction Guaranteed" program. Corporate programs like developing new retail formats like SAMS Clubs and Supercenters, and Neighborhood Markets. Programs to emphasize contemporary social issues like the Buy American Program and Green Marketing. Power-based programs to establish Wal-Mart as a leader in its channel of distribution. Inventory control system which links stores with distribution centers and headquarters staff.

Question 2: Discuss the importance of changes in the external environment to an organization like Wal-Mart. External Environment: Economics Change in customers purchasing power Rival firms: change in marketing strategies Technology: innovation of new technologies Trade Area: change in international policies

Internal Environment House-brand strategies Cost leadership Improved service qualities Sources of fund

 The discount department store industry has been a growing industry in the United States for years and WalMart has established itself as the leader of the pack. Fierce competition among retailers has forced down prices and has allowed WalMart to become the most dominant retailer in the US. Many changes in the external environment have made this possible. Several economic trends beginning in the late 1980s helped WalMart to gain market share in the industry. The economic slowdown that lasted into the mid-1990s forced retailers to drop their prices to draw in customers. When the economy returned to prosperity in the late 1990s, this competition only increased. Companies such as Sears, Roebuck and Co. met this competition by restructuring and focusing more on their retail business. WalMart was now forced to compete with companies designed to better serve the consumer. Companies such as Target Stores began to shift its focus to its national markets by carrying more fashionable merchandise. Many companies, such as Caldor and Woolworth Company, were unable to stay with the competition and closed down entirely.

 WalMart was able to buy up many of stores and expand its own market. New retail formats emerged and changed the face of retailing. The superstore was introduced in the United States and it saw immediate success. WalMart was able to enter this market easily and has seen much success. Kmart Corporation, the third largest retailer in the US, has recently been having problems competing with WalMart and other large retailers. They failed to change in a changing market and they have recently just gone bankrupt. If Kmart Corporation is unable to reorganize in the next few years. WalMart will most likely increase its customer base with Kmart customers. WalMart success has often come at the expense of local merchants in many rural areas. When WalMart announces the building of a new store in a specific area, many local businesses close up. They just are not able to compete with the low prices that WalMart can provide to its customers.

Question 4: How may the of Samuel Moore Walton impact the organizations forward momentum? What steps should management take to continue Mr. Sams formula for successes? A number of programs might be introduced to perpetuate the enthusiastic and exciting leadership that Mr. Sam brought to the organization: Give proper idea about Sam Walton`s philosophy by film, in books, in articles, in a painting to hang in every store; Spread positive thinking about Mr. Sams philosophy among the new employees. Train new employees with various training program like leadership programs, communication programs which would emphasize continuing the Mr. Sam philosophy in the company. Develop Mr. Sam as a symbol or idea as opposed to an individual. Execute in the firm all the ideas that Mr. Sam stood for, like his homespun humor, life style, or morality. Continue to encourage the human reactions and human resource, bottom-up style of management in the firm. Monitor whether the employees follow MR.Sam`s philosophy or not

Question 5: What evidence is there to suggest that the marketing concept was understood and applied at Wal-Mart? According to the marketing concept, a firm should try to provide product and service that satisfy customer needs through a coordinated set of activities that also allows the organization to achieve its goals. Evidence of an appreciation and application of the marketing concept is found in annual reports of the firm and in management comments and actions. The 2000 Annual Report of Wal-Mart Stores, Inc. suggested that over the next five years, 60 to 70 percent of the firms sales and earnings would come from domestic markets with Wal-Mart stores and Supercenters, and another 10 to 15 percent from SAMS Club and McLane. The remaining 20 percent of growth would come from planned growth in the international markets. This would mean the success in domestic markets would drive growth in international markets.

 At another point in the case, it was noted that stores were expected to quote and provide the customer with a clean, pleasant and friendly shopping experience. Some have suggested that it was many of the little things that set Wal-Mart apart from the competition and made it an example of the application of the marketing concept. The people greeter wide aisles, employee vests for recognition, warm interior decor and exterior colors, and the use of alternative wrapping were considered examples of the customer first attitude. Since customer satisfaction is the major aim of the marketing concept, the Satisfaction Guaranteed Refund and Exchange Program; could be interpreted as also part of the application of the marketing concept. The comments made by Glass also reflect the concept: Well be fine as long as we never lose our responsiveness to the consumer.

THANK YOU..!!
Narinder Sethi (2011 G41) Nikhil Adhye (2011G10) Suchita Dalvi (2011G17) Ajay Pardeshi (2011G57) Sumit Malivya (2011G03) Krishna Kunwar(2011G19)