You are on page 1of 80

1

WAL-MART RETAIL MANAGEMENT

A PROJECT REPORT

Submitted in partial fulfillment of the requirement for the
award of the degree in

MASTER OF BUISNESS ADMINISTRATION

BY

Mahtab Ali Roll No: 520945075

UNDER THE GUIDANCE OF

Amit Sinha

2

TABLE CONTENT-

Contents Page No.

Acknowledgements

Introduction to Retail Management 7

Introduction of Wal Mart 15

Walmart cooperation gallery 18

Walmart strategy 21

 Walmart Point of Sale 24

 Supply Chain Management of Walmart 26

 Retail supply chain network of the future 28

 Inventory Optimazation 33

Merchandising of Walmart 35

 Walmart marketing strategies 38

 Walmart online shopping 40

 Walmart partnerships with Indian manufactures 42

 Inventory Management Review of walmart 44

Walmart is ordinary fewer case more frequently 46

 Walmart Representation without taxation 47

 Loyalty program of Walmart 50

 Walmart is Cost Leadership 63

 Walmart Global Sourcing 68

 Walmart Stores 71

 Investors of Walmart 72

 Recent Financial News 73

 Suppliers 77

 Health &Wellness Programs of Walmart 79

 Walmart Customers 80

3

 Departments of Walmart 82

CERTIFICATE

4

This is to certify that the project entitled “WAL-MART RETAIL
MANAGEMENT” has been developed by Mahtab Ali under my
supervision in partial fulfillment for the award of degree in Master of
Business Administration (MBA) for the session 20010-11.

Submitted By:

Mahtab Ali

MBA IV-Semester

SMU

Acknowledgement
It gives me immense pleasure in submitting this project on “WAL-MART RETAIL
MANAGEMENT”. I have developed this project in fulfillment of “MBA Course”.

I am highly thankful to Mr. Rajeev Dixit for their encouragement, guidance and
valuable suggestions, which I incorporated in my project.

to my parents. IVth Semester Project Report on “RETAIL MANAGEMENT OF . I am grateful to the faculty members of MbB from whom I got the constant encouragement and support throughout all years of M.B.B. I am also thankful. (MAHTAB ALI) M. Program. 5 I am thankful to all staff members of Department of Computer Science of SIKKIMM MANIPAL UNIVERSITY.A.A. friends for the constant follow up and boost provided by them through their encouragement during the course of carrying out the project.

A Strategic Retail Planning is the total planning of company's overall resources for the achievement of objective. determine the appropriate retail format. It describes how retailers select target market segment. 6 WAL-MART” Introduction of Retail Management System- A Retail Strategy can be defined as a specific plan or framework of action that direct a retailer to achieve its goals. and build a sustainable competitive advantage .

economic. catalog and store channels to reduce redundancy and increase efficiency. and competitive environment 5. Multi-Channel Planning—Integrate planning for your web. Strategic Retail Planning Outlines retailer goals 3. Strategic Retail Planning Provides thorough analysis of the requirements for doing business for different types of retailers 2. . Strategic Retail Planning Allows an analysis of the legal. Strategic Retail Planning Encourages anticipation and avoidance of crises Planning and forcasting in Retailing- Retail Planning and Forecasting allows retailer to create. Planning and Forecasting includes everything a retailer need to predict and respond to changes: Demand Forecasting—Keep it simple and accurate. assortment and promotional plans for each channel and communicate changes to marketplace. modify and track their financial. Strategic Retail Planning determine how to differentiate itself from competitors 4. Predict demand at any combination of product and location nodes. 7 Benefit or Features of Strategic Retail Planning- 1.

Retail not being recognized as an industry in India . Create.Hampering the availability of finance to existing and new players . See buyers' changes immediately so you can reach your financial goals with the right mix of products. Visual Merchandising involve the total merchandise or service presentation. channels and time periods.Integration of Front end and back end operation is important efficient store operation and profit. Promotion Planning—Coordinate all aspects of your promotions from one solution. Key Reasons for slow growth in Retail in India Reasons for slow growth in retail: 1. and also for the building and placement of design elements Store Operations Planning . Visual Merchandise Planning-Visual Merchandising is largely associated with creating the look of the store. but powerful solution that manages multiple versions of plans across categories. Assortment Planning— Planning of assortments by customer. forecast and track events and feed anticipated lift to replenishment to avoid stock-outs on featured products. 8 Financial Planning—Plan top-down or bottom-up with an easy to use. the over all business image.

9 .Global retailer can enter only by way of a franchise with Indian partner or through technological alliances Key Reasons for Retail Change in India There are some fundamental factors that has brought the major change in retailing industry today: .Organized players have to face multiple point control and tax system .Hence it becomes expensive to transfer goods from one store to another 5.This eats into the profitability of a project Lack of adequate infrastructure .FDI in pure retailing is not permitted . lack of cold chain infrastructure .Sales tax rates vary from State to State .Tax evasion by small stores . Foreign direct investment . High costs of real estate .Lease or rent of property is major area of expenditure .Poor roads.Existing supermarkets and food retailers have to invest substantially in building cold chain infrastructure 4.Hence affecting growth and expansion plans 2. Multiple and complex taxation system .One of the prime reason for slow growth of retail in India .

Introduction of the private label : Retailers now decide on products and brands they want to stock. it has increased the demand. Technology : Increasing use of technology. use of bar code provides . taking advantages of employment opportunity in the booming service sector these young Indians are redefining service and consumption patterns Emerging Rural Market: The Rural market is beginning to emerge as an important consumption area. The emergence of a young Earning India : Nearly 70% of the Indian population is below the age of 34.The changes in income brought about changes in the aspirations and the spending patterns of the consumers. Changes in Consumption patterns: Occupational changes and expansion of media have caused a significant change in the way the consumer lives and spends his money. 10 Changing Income Profiles: Steady economic growth fuelled the increase in disposable income in India. Some have even developed their own in store brands/products that cater to the needs of target customers.

customer cards. 11 wealth of information to retailer. Consumer profile. at the required place and time. . ownership utility is created Important Functions of Retailer- From the customer point of view. Place: Retailer ensures to create place utility being available at a convenient location. Roles of Retailer or Utility provided by Retailer- From an economic viewpoint. price ranges. the role of a retailer is to provide value or utility to the customer. This comes 5 different perspectives: Form: First is utility regarding the form of a product that is acceptable to the customer. Ownership: Eventually. The retailer does not supply raw material. Task: The retailer accomplishes the task of storing the goods. promotional offers. but rather offers finished goods and services in a form that the customers want. the retailer serves him by providing the goods that he needs in the required assortment. products purchased. when the product is sold. internet etc. and provide an assortment of products in various categories Time: He cerates Time utility by keeping the store open when the consumers prefer to shop by providing preferable shopping hours.

Final consumers. Promotional support: small manufacturers can use retailers to provide assistance with transport. Accomplishing the function of distributing the goods to the end users 2. Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Holding stock: Retailers maintain an inventory that allows for instant availability of the product to the consumers. and pre. in contrast prefer a large variety of goods and services to choose from and usually buy them in small units.payment of merchandise. advertising. 4. which are then tailored by the retailers into smaller quantities to meet individual consumption needs 3. manufacturer and wholesalers typically ship large cartons of the products. Act as a final link in the distribution chain . 2. The Retailer also serves the manufacturers by 1. It helps to keep prices stable and enables the manufacture to regulate production. Breaking Bulk: to reduce transportation costs. storage. 12 1. Creating and Managing a channel of information from manufacturer to the consumer 3.

” According to Kotler: “Retailing includes all the activities involved in selling goods or services to the final consumers for personal. it implies a first-hand transition with the customer. meaning cut a piece off or ‘to break bulk’. “Retailing is the sale of goods and services to the ultimate consumer for personal. non business use” . family or household use. Introduction of Retail Management- Introduction of Retailing The word ‘retail is derived from the French word ‘retailer’. In simple terms. 13 4. Recommending products where brand loyalty is not strong or for unbranded products.

. The company incorporated as Wal-Mart Stores. corporate philanthropy and employment opportunity. Wal-Mart History -- Walmart was founded in 1962. 14 INTRODUCTION OF WAL MART About Wal Mart- Walmart serves customers and members more than 200 million times per week at more than 8.1 million associates worldwide. Walmart ranked first among retailers in Fortune Magazine’s 2010 Most Admired Companies survey. 31. Inc. 1969. The company's shares began trading on OTC markets in 1970 and were listed on the New York Stock Exchange two years later. . With fiscal year 2010 sales of $405 billion. A leader in sustainability. on Oct.692 retail units under 55 different banners in 15 countries. with the opening of the first Walmart discount store in Rogers. Ark. Walmart employs 2.

The name "Walmart. members and associates. In 1983. Today. SEC filings. Use the legal name when it is necessary to identify the legal entity. litigation or governance matters. Walmart became an international company in 1991 when it opened its first Sam's Club near Mexico City. 15 The company grew to 276 stores in 11 states by the end of the decade. Learn more about our history. this mission is more important than ever to our customers and members around the world. (NYSE: WMT) is the legal name of the corporation. We operate with the same level of integrity and respect that Mr. Learn more about our purpose. It is because of these values and culture that Walmart continues to make a difference in the lives of our customers. the company opened its first Sam’s Club membership warehouse and in 1988 opened the first supercenter -.featuring a complete grocery in addition to general merchandise.now the company’s dominant format -." expressed as one word and without punctuation. Wal-Mart in India-- . Sam put in place. is a trademark of the company and is used analogously to describe the company and its stores. Note: Wal-Mart Stores. We work hard every day in all our markets to deliver on this promise. such as when reporting financial results. Inc. Ed. Walmart Purpose - Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart more than 40 years ago.

In the first few weeks itself. This was a radical increase from the prevailing 2%. the company had managed to sign on close to 35.000 members. The world’s biggest retailer had been silently working on its strategy for India for around two years. Did this mean Indian consumers could not benefit from Wal-Mart’s everyday low prices? How Wal-Mart Works . Punjab in North India. Wal-Mart’s first outlet was set to launch in the city of Amritsar. believed that by the year 2015. The first store air-conditioned and built over 50. supermarket chains create and manage well-oiled supply chains to offer consumers lower prices and dampen inflationary trends. But then it’s a fallacy that in India it is always about low price’. Wal-Mart Inc. Birla and Reliance have all attempted to enter food-and-grocery retailing in India with mixed success. The reason for Wal-Mart’s entry in India was clear – The Indian middle class . Wal-Mart was ready to open its first store in India. 16 ‘In most countries. was on the outskirts of the city. Amritsar. However. the debut outlet was not to carry the familiar Wal-Mart brand. Will Wal-Mart’s supply chain work in India? Wal-Mart’s first store in India - In December 2006. 35% of India’s retail sales could be from chain stores . The store employed 200 locals and was likely create 500 indirect jobs. ft. Companies like Tata.000 sq. In May 2009. Inflation in India is touching decade-highs. Mom-and-pop stores and traditional distribution networks dominated the $375 billion Indian retail market.

you will learn the key reasons that Wal-Mart has been able to keep its prices low -. It is an economic force. That basic strategy has shaped Wal-Mart's culture and driven the company's growth. In this article. We'll also take a look at the scope of Wal-Mart's impact on the economy . Corporation Image Gallery Now that Wal-Mart is so huge. a cultural phenomenon and a lightning rod for controversy. It all started with a simple philosophy from founder Sam Walton: Offer shoppers lower prices than they get anywhere else. 17 Wal-Mart is more than just the world's largest retailer.cutting-edge technology. a frugal corporate culture and a push to make suppliers sell merchandise at cheaper and cheaper prices. it has unprecedented power to shape labor markets globally and change the way entire industries operate.

. 18 and the controversies surrounding Wal-Mart. Sam Walton opened his first five-and-dime in 1950. The company beginnings in his continued to grow. as well as the future of the company. Two years later. He was right. Neighborhood Market stores and Sam's Club warehouses. Wal-Mart surpassed key rival Kmart in size.Wal-Mart Supercenters. He demanded that his employees also keep expenses to a bare minimum -- a mentality that is still at the heart of Wal-Mart culture more than a decade after Walton's death. His vision was to keep prices as low as possible. The company has continued to grow rapidly after his death in 1992 and now operates four retail divisions -. going public in 1970 and autobiography. Amazon Sam Walton In the early 1960s. it surpassed Sears. First. Walton continued to drive an old pickup truck and share budget-hotel rooms with colleagues on business trips. In 1990. Wal-Mart discount stores. Even if his margins weren't as fat as competitors. let's start with a little history. adding more stores every year. even after Wal-Mart made him very rich. he figured Image courtesy he could make up for that in volume. Walton opened his first Wal- described Wal-Mart's Mart in Rogers. Arkansas.

To give you an idea of just how many people that is.040. powerful and successful? Let's look at some of its strategies. By comparison. Wal-Mart pushed the retail industry to establish . consider these facts: • Wal-Mart employs 1.4 million people. Wal-Mart Strategy-- Let's start with technology. Idaho.6 million people. its mission to keep prices low. 2006.200 retail outlets.5 billion. posted sales of $81.com A Wal-Mart Neighborhood Market To get a sense of just how big Wal-Mart is today. • Wal-Mart has 6. the second-largest retailer in the country. its corporate culture of watching every expense. In contrast. 19 Image © 2006 Walmartfacts. Home Depot. • Wal-Mart had sales of $312. which ended January 31. and above all else. is home to 1. including its sophisticated use of technology.43 billion in its most recent fiscal year. What made Wal-Mart so big. Home Depot has 2. the 39th most populous state.

During the first eight months of 2005. They are are expected to Wal-Mart's pinch pennies wherever they can. 20 the universal bar code. RFID tags hold significantly more data than bar codes. Wal-Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-equipped stores. It has also been accused of demanding that hourly workers put in overtime Image © 2006 without pay. Wal-Mart became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain. The bar allowed retailers to generate all kinds of information -- creating a subtle shift of power from manufacturers to retailers.com than 70 hours per week. which forced manufacturers to adopt common labeling. Recently. AR . Wal-Mart became the first major retailer to demand manufacturers use radio frequency identification technology (RFID). Store managers often work more Walmartfacts. established by Walton. The frugal culture. The technology uses radio frequencies to transmit data stored on small tags attached to pallets or individual products. according to a University of Arkansas study (as reported in Fortune Small Business magazine). In the Bentonville. The company has been criticized for the relatively meager wages and health care plans that it offers to rank-and-file employees. even on things headquarters in like the heating and cooling of the stores. also plays into Wal-Mart's success.

m. In "The Wal-Mart Effect. Arkansas. stores are kept at 70 degrees Fahrenheit. 21 winter. to cut prices. This philosophy is known as "plus one. In a 2003 Los Angeles Times article (part of a Pulitzer Prize-winning series about Wal-Mart. Everything -- including the technology and corporate culture -. tells of a Wal-Mart buyer named Celia Clancy." author Charles Fishman discusses how the price of a four-pack of GE light bulbs decreased from $2. Wal-Mart also pushes its suppliers. instead of an expensive city like New York. The building is drab and dull. Wal-Mart is headquartered in Bentonville.m. This culture is also present at the company's headquarters. and working half-days on Saturdays. Executives fly coach and often share hotel rooms with colleagues. The central goal of Wal-Mart is to keep retail prices low -. some say relentlessly. Experts estimate that Wal-Mart saves shoppers at least 15 percent on a typical cart of groceries." . You won't catch executives in limousines and you won't see them dragging into work at 9:30 a.19 to 88 cents during a five-year period.feeds into that ultimate goal of delivering the lowest prices possible. they stay at 73. typically arriving at work before 6:30 a. They work long hours.and the company has been very successful at this. who was in charge of clothing and demanded that each supplier either lower the price or increase the quality every year on every item. and in the summer.

The same system allows the creation and printing of the receipt Web based POS (post 2000s) Web based POS software can be run on any computer with an Internet connection and supported browser. A POS terminal manages the selling process by a salesperson accessible interface. the equivalent of an electronic cash register. A "checkout" refers to a POS terminal or more generally to the hardware and software used for checkouts. without additional software. 22 Point of sale-- Point of sale (POS) or checkout is the location where a transaction occurs. The POS .

All-in-one POS units save valuable counter space for the retailer. customer loyalty programs. marketing purposes and specific buying analysis. quantity discounts and much more. cash drawer. exchanges. monitor. “Back-office” computers typically handle other functions of the POS system such as inventory control. gift cards. layaways. returns. BOGO (buy one get one). a signature capture device and a customer pin pad device. Many retail POS systems . manufacturer coupon validation. gift registries. Other typical functions of a POS system are to store sales information for reporting purposes. The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. Customer information may be stored for receivables management. foreign currency handling and multiple payment types. purchasing. receiving and transferring of products to and from other locations. integrated credit card processing system. receipt printer. The POS system software can typically handle a myriad of customer based functions such as sales. A Retail Point of Sales system typically includes a computer. sales trends and cost/price/profit analysis. customer display and a barcode scanner. More and more POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. POS software can also allow for functions such as pre- planned promotional sales. 23 software is hosted on secure servers in multiple data centers with real-time backups The retailing industry is one of the predominant users of POS terminals. It can also include a weight scale.

planning. 1996). control. Supply chain management of Wal-Mart- Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland.[1] Supply Chain Management spans all movement and storage of raw materials. building a competitive . work-in-process inventory. Another definition is provided by the APICS Dictionary when it defines SCM as the "design. execution. and monitoring of supply chain activities with the objective of creating net value. and finished goods from point of origin to point of consumption (supply chain). 24 include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications.

25 infrastructure. synchronizing supply with demand and measuring performance globally. leveraging worldwide logistics." .

The case explains in detail how Wal-Mart managed various components of the supply chain including procurement. The Retail Supply Chain Network of the Future- Multi-Channel World Means Retail Supply Chains Must Rapidly Evolve to Optimize Inventories and Support Complex Logistics Flows In the first part of this series. It covers how the use of innovative IT tools has helped the company in improving the efficiency of supply chain. the leading retailer in the world. The case concludes with a discussion on the benefits reaped by Wal-Mart due to its efficient and effective supply chain management system. 26 The case examines the supply chain management practices at Wal-Mart. we looked at how high-performance retailers are unifying operations and collaborating internally across functional silos to speed trend-right merchandise to market.). distribution. logistics and inventory management. . (See Accelerating Integrated Supply Chain Performance.

Lead With Inventory Strategy Retailers face a daunting challenge in retooling their supply chains to . orders were missed. Even easier. retailers became “multi-channel. customer complaints grew and costs steadily rose. and there was only one place to go to get it. The life of a Supply Chain professional was so much easier a generation ago when everyone shopped at the mall. While this was workable initially. 27 In part 2 of this four-part series. “Stop this crazy thing!” With networks out of balance. she'll drive to a nearby competitor. No surprise then that the supply chains of the past were constructed to service the predictability of one-channel operations. Retailers began to feel like George Jetson on his automatic dog walker screaming. no worries. we expand on that concept by examining the Supply Chain Network of the future. she’ll go online while sitting by the fire in the comfort of her home. If it doesn’t fit. Al Gore hadn’t invented the Internet and Wal-Mart wasn’t WAL-MART. You knew where you had to go to get what you wanted. But…the shopper of the 21st Century demands more. If her local retailer doesn’t have the item she wants. problems ensued as volumes grew. shipments were often late. or call one of the dozens of catalog retailers. so your competition was generally well-known and predictable.” creating work-arounds to handle the new demands. In response. The online retailer offers free shipping and no hassle returns.

forcing business unit managers to ask. For example. In many cases. choking the network and impacting service and bottom line performance. Tackling this challenge requires a bit of “backwards thinking. independent actions taken by people in different departments can combine to create a “perfect storm” . in the diagram below.” Retailers must first determine the optimal inventory strategy for each item in their assortment and only then configure network infrastructure to support these complex flows. 28 successfully service complex. If not well orchestrated. a number of questions are answered related to how the intersection of demand variability and volume relate to optimal flow path. In developing this inventory strategy. enterprise-wide inventory strategy in which representatives of key functional areas come together to critically evaluate all factors impacting inventory performance. "How did we get this bad?" The supply chain of the future is designed on the foundation of a comprehensive. companies will probably want a different inventory strategy for an item in the upper left quadrant as opposed to those in the lower right quadrant.where inventory spirals out of control. . it’s very hard to see the incremental inventory creep until it’s too late to react . multi-channel operations featuring increasingly localized store assortments.

Issues related to source of supply. product packaging. 29 The answers to these questions will require a great deal of interaction across departments. while a better option for an item in the lower right may be an assortment picked specifically for that store based on sales. Using the diagram above as the basis for discussion. an inventory strategy might be for items in the upper left to be replenished as full cases directly from the vendor due to the high volumes and consistent demand. for example. Product Development and Sourcing. . transportation pipeline. service strategy and other factors are evaluated by a team including Merchandising. Store Operations and IT. Distribution and Transportation.

6 Areas Impacting Executing Inventory Optimization- . as shown in the chart below. 30 The resulting inventory strategy paves the way for the tactical development and execution of an inventory optimization plan incorporating a number of key elements.

31 Implementing the Right Supply Chain Network As recently as the early 90’s. most retail DCs received bulk merchandise from vendors and did all the store break-down and processing in cavernous. it has stayed focused predominantly on optimizing the single flow from vendor through DC to store. But even as the retailer’s DC has become more efficient. with retailers driving vendors to ship “floor ready” merchandise that is predominantly cross-docked through more mechanized and efficient retail DCs. labor-filled facilities that delayed store shipment and added significant cost. The next horizon in supply chain network design will require retailers to rethink infrastructure that is capable of supporting a combination of flows required to best support a comprehensive. Those days are over. enterprise-wide inventory .

Dock-to-dock handling of pre-allocated “floor ready” receipts • DC Hold & Flow – Initial store set is cross docked with replenishment held at DC • Replenishment – All merchandise is received and held in the DC for pull-based store replenishment. These flows include: • DC Bypass – Vendor shipment directly to customer (store or individual) • Cross Dock . To illustrate the impact of re-evaluating inventory strategy. These are just the most obvious flows. directly to the retailer’s store. KSA's work with one retailer resulted in replacing a traditional DC process with DC Bypass for a critical category of merchandise. 32 strategy. outsourced operations for each channel. you begin to see the complexity of designing a supply chain network in today’s environment. Including the decisions a retailer must make about in-house vs. This pipeline reduction drove significant inventory savings while allowing the merchant additional time to ensure that product being designed and manufactured represents the best fit with current customer demands. Merchandising of Wal-Mart- . This retailer cut its source-to-store time by more than 50% by implementing a new flow allowing merchandise to travel from a vendor’s overseas plant.

physical presentation of products and displays. while springtime clothing and garden-related merchandise is already arriving at stores. selection. At a retail in-store level. pricing. the grads portion usually refers to high school .This annual cycle of merchandising differs between countries and even within them. is also promoted). Promotional merchandising In retail commerce. including green items and products pertaining to Irish culture. merchandising is any practice which contributes to the sale of products to a retail consumer. practices. 33 Merchandising is the methods. particularly relating to cultural customs like holidays. merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase. the basic retail cycle begins in early January with merchandise for Valentine's Day. with graduation gifts (typically small consumer electronics like digital cameras) often being marketed as "dads and grads" in June (though most college semesters end in May. Mothers Day and Fathers Day are next. and seasonal issues like climate and local sporting and recreation. and display that stimulates consumers to spend more. and the decisions about which products should be presented to which customers at what time. and operations used to promote and sustain certain categories of commercial activity. Patrick's Day merchandise. packaging. This includes disciplines in pricing and discounting. visual display merchandising means maximizing merchandise sales using product design. often as early as mid-winter (toward the beginning of this section. St. Easter is the major holiday. which is not until mid- February. In the United States for example.[1] In the broadest sense. Following this.

states). Merchandising also varies within retail chains. Christmas is already being pushed on consumers. though they usually begin on the day after Christmas and continue on at least until New Year's Day but sometimes as far out as February. Christmas decorations. Coastal-area stores might carry water skiing equipment. (Often. even though the "official" season doesn't start until the day after Thanksgiving. while ones near mountain ranges would likely have snow skiing and snowboarding gear if there are ski areas nearby. Summer merchandise is next. back-to-school is on the shelves and autumn merchandise is already arriving. As the Halloween decorations and costumes dwindle in October. and by the day after Halloween retailers are going full-force with advertising. Does keeping your finger on the pulse of a global operation sound enticing? Do you like to keep up on the newest products and trends? Do you want a . Christmas clearance sales now begin even before Christmas at most retailers. and at some arts and crafts stores. which ends one to two weeks after Father's Day in many U. a time when there are no holidays to promote. particularly after Labor Day. 34 graduation. including patriotic-themed products with the American flag.S. out by Memorial Day in preparation for Independence Day (with Flag Day in between). By July.) The back-to-school market is promoted heavily in August. while stores in Florida and southern California might instead carry beach clothing and barbecue grills all year. the summer merchandise is on final closeout and overstock of school supplies is marked-down some as well. where stores in places like Buffalo might carry snowblowers. and Halloween (and often even more of the Christmas) merchandise is appearing. a Christmas in July celebration is held around this time. By September.

In a career with Walmart merchandising. “Customers would be provided what they want. drawing on your own negotiation skills while learning about the ever-changing retail market. all at a value”. Walmart buyers attend merchandise shows. and our merchandising group delivers. Walmart Marketing Strategies--- Wal-Mart’s marketing strategies are based upon a set of two main objectives that have guided the firm through their growth years. The customer is featured in the first objective. research markets and shop the competition to find out what customers want and need from their local Walmart stores. while always keeping in mind our Every Day Low Pricing philosophy. Our customers expect the best value for their money. Team spirit was . You will also partner with suppliers. when they want it. you will work with a variety of departments and develop a true understanding of the Walmart business. 35 career in which you make recommendations that may have a ripple effect across the globe? Then Walmart’s merchandising department is the place to make it happen.

home fashions. “Treating each other as we would hope to be treated acknowledging our total dependency on our associate – partners to sustain our success”. the country had returned to prosperity. I can only see continuous profits for the firm. I agree with Wal-Mart’s two main objectives. its employees. There were many changes to the external environment of Wal-Mart in the 1980"tms and 1990"tms. feeling like associate partners. By the early 1990"tms. Employees are the basis for success of the company and drive the day-to-day operations. Wal-Mart management felt the high consumer debt caused shoppers to reduce or defer their spending. American companies were soon to follow suit with superstores opening on every corner. When you look at the continuous increasing financial summary of Wal-Mart. By 2000. kids and electronics. Wal-Mart’s employees. tools. the financial success of the company will continue to grow. By 1998. 36 emphasized in the second objective. total income was relatively high and interest rates were stable. the United . Wal- Mart was faced with many of its competitors restructuring. In 1995. The second objective covers the foundation of the company. gives them a feeling of empowerment and pride that drives the company’s culture. Wal-Mart has launched successful marketing strategies that considered factors like social and environmental causes. Sears was going to focus on 5 areas. Wal-Mart seemed to make all the right moves in the decade of economic uncertainty. appliances. the discount department store industry had changed a number of times and was thought to have reached its maturity. unemployment was low. The customer objective includes giving the customer what they want at a reasonable value. If Wal-Mart continues to be aware of its internal and external environments.

I can only say "Wow". Here you can do your shopping at our Online Shopping . use. The products were better in 3 respects. manufacturing and disposal. After a review of Wal-Mart"tms financial performance in the 1990"tms. 37 States had experienced one of the longest periods of economic expansion. Other firms began carrying more fashionable merchandise and more attractive facilities. Walmart Online Shopping - Use our Best Online Shopping Websites to do your Wal Mart online shopping.

com.html. but there are many other reasons to shop online. household appliances. Once you begin shopping online you will wonder how you ever managed before. and make APO and FPO military web shopping (and shipping) easy. and you can save money at online shopping sites because they offer many online only specials. You can easily do your comparison shopping at our best online shopping websites without ever leaving home.html and Walmart. and usually have it shipped overnight. tonight’s dinner. or a trip to Europe. Why has online shopping become so popular? The most important reason is that internet security has improved tremendously.html have become two of the most popular internet shopping sites. place your order. com. . the family car. Amazon. You can do comparison pricing to find the best buys online. all in a matter of minutes. find online shops and enjoy shopping without ever leaving home. Our Online Shopping Website site has become one of the fastest growing websites on the internet today. Security may be the main reason that computer shopping is popular today. Our discount shopping sites give you easy access to the most popular online shopping websites. Millions of people now use an online shopping directory regularly. and most retailers from Wal-mart to Ace Hardware have websites where you can do your online shopping and purchase their products. You can purchase clothes. all from the convenience of your home or office. 38 Directory. While there are a lot of sites to choose from. You can do your shopping online today and feel secure enough to use your credit card without fear of having your personal information stolen.com. Visit Amazon.

They will email you a confirmation of your order. They want you to enjoy your experience. When you’re done. and come back again. You browse for your merchandise. you check out just as if you were in your favorite store. 39 Not only have you saved a trip to the store. you will find most are similar. some . Since online shopping has become so popular. or you can use the search feature to find specific items. simply add it to your shopping cart and continue on. While every site is a little bit different. Most sites are nothing more than online catalogs. approximate delivery time. but you will have saved money on your purchases. you will find that most online stores place a great deal of emphasis on customer service. president of Walmart India. Walmart Forges Partnerships With Indian Manufacturers -- It’s been an eventful year for Raj Jain. When the American retail giant Walmart decided to enter India. and a tracking number instantly. Once you find your item.

we wait in front of them and we pay them the same day. food grains. Jain has worked to change that perception and is now looking forward to expanding India operations. which gives them a remuneration which is better. speaks about a year of transformation and future plans for Walmart India. vegetables. they are getting a much better deal than they were getting in the marketplace. contrary to hurt. the first year we spent a lot of time explaining to people what is our business model. the small and medium manufacturers and the small “kirana” stores. etc. And . we pick up the produce from their farm gate. at a price equal to or better than the mandi price. So if you put all that together. who was in New York recently. In an exclusive interview with Desi Talk. So. 40 feared that farmers and small businesses would be hit hard. actually benefit the three constituents: the small farmer. Over the past year.. Excerpts: Q: How did you address Indian concerns about Walmart’s impact on small stores and farmers? My own view is all the apprehensions were based on lack of information and understanding of what Walmart does and what modern wholesaling and retailing can do for India. what we intend to do and. So we give a quality incentive to our farmers. Jain. We would procure directly from small farmers fruits.

we have almost 1 lakh (100. we are going to open a store in Kota in Rajasthan and we have taken some of their products to those places. Inventory Management Review- .000) members now. pickles. “kirana” stores. and they are buying everyday from us and from the feedback we get from them. And very recently we showcased 30-odd suppliers to Walmart buyers across the world of Indian ethnic food. and so on and so forth to enable them to get access to the global markets. our quality is better and they get very fair transparent treatment. We helped some of these people to get distribution within Punjab where we have stores. You know. They make private label products for us and also they make their own branded products and supply to us. 41 we are working with more than 600 farmers in Punjab. the chutneys. We are now going outside Punjab. So our initial feedback from our customers has been very positive. they are seeing our prices are lower. We helped them in the area of technology in improving food hygiene and so on so that the products come up to international standards. You know. listed with us in our four stores. We work with almost 500 small and medium manufacturers. our availability is better.

The specifics regarding why are some pretty interesting reasons. In a poll of her magazine's internet readers. Wal-Mart's business. but Susan K. they do not want backorders. but until then. If you think about this. Well. you'd think that average levels would be decreasing. suppliers are forced to hold incredible safety stocks to make sure they can satisfy Wal. is too good to pass up. So what does this do to their suppliers? According to Logistics Management.Mart's demands. I'm waiting for the day when Wal-Mart's suppliers form a massive supplier's union (sounds like collusion to me). Wal-Mart is not about to have a stockout due to some supplier's inability to . Personally. 42 Wal-Mart Increases its Supplier's Inventory Levels With all the Just-In-Time talk and knowledge regarding better management and understanding of inventory. Wal-Mart's JIT efforts are leaving their suppliers with more inventory. wrote a pretty interesting article that found otherwise. Lacefield. even with the demands on service. The only way to do this is to be able to replenish their stock at a moment's notice. The demands that Wal-Mart places on its suppliers are incredible because of the power Wal-Mart places on its suppliers. Wal-Mart does not want to hold inventory. she found that over 60% of companies expect to see inventory levels rising over the next year. Most notably. it makes a lot of sense. Also in the mean time. the suppliers don't have a choice in the matter. But. they should be. I still think that at a well-managed company. Basically. At the same time. accociate editor of Logistics Management. it shoots supplier's inventories straight up. good for Wal-Mart for leveraging what it can out of its suppliers.

Wal-Mart. but also. In fact it is actually impossible. No matter what a company holds in inventory. Zero tolerance is a hell of a statement from a company that knows service level. than they have to produce a large amount and then. or hold onto more inventory. as one Logtistics Management survey respondant said regarding why he has to hold more inventory: Wal-Mart is ordering fewer cases more frequently- For a company. like many huge companies. instead of . Couple this with a shorter lead time to Wal-Mart and inventories are stagerring. Not only does Wal-Mart demand what they want when they want it. Because if a company cannot produce less and faster. this means that they can either produce smaller batches. will not wait. 43 provide a 99% service level. To provide even a 97% service level compared to a 95% service can result in a huge increase in inventory. Many companies are: requiring shorter lead times even as more companies implement 'zero tolerance' policies for late shipments. Zero-tolerance is wild. there is always the possibility that Wal-Mart could order one more than that.

No. This approach has . While Wal-Mart may be getting the good end of the deal. one thing is for sure. and it's not because the business with Wal-Mart is bad. Additionally. 44 producing a large amount and getting rid of it all at once. 44. it can found in the October 2005 Logistics Management Vol. there's a reason suppiers put up with these demands. Shippers are seeing inventory rising. Wal-Mart's Representation Without Taxation - The Wall Street Journal reports that Wal-Mart had asked the Ernst and Young consulting firm to help organize their real estate holdings to minimize property taxes where they do business. If you would like more informatin regarding this article. which increases average inventory. feel free to leave comments with a question and your email address. they have to get rid of it slowly over time. 10 issue.

oops. make campaign contributions. we customers . but Googling "wal-mart real estate tax" brings up a number of lawsuits and lesser disputes between Wal-Mart and state authorities. Government never takes a pay cut. Many articles make it sound like Wal-Mart conspires against us taxpayers. but.who can't pay -. Will making generous campaign contributions to state politicians work for Wal-Mart? Do politicians want to get reelected? To ask the question is to answer it. the rest of us -. their political leaders are filing suit to get Wal-Mart to pay more taxes. Wal-Mart's money will work to Wal-Mart's advantage. but don't forget that Wal-Mart doesn't pay real estate taxes.get taxation without representation. It probably costs less initially for Wal-Mart to hire a consulting firm to take advantage of existing law than to bribe--. unlike us. they'll get more money from you and me by raising our taxes. The original definition of an "honest politician" is a politician who stays bribed. Wal-Mart has the money to do something about it. Wal-Mart pays for representation without taxation. Paying politicians to cut their taxes gives Wal-Mart representation without taxation. Now that a number of states have noticed that a number of noisy voters don't like Wal-Mart. 45 worked pretty well for some years. just as rich people's contributions to the Ways and Means Committee of the US Congress have worked to their advantage since the committee was formed. Wal-Mart doesn't like paying taxes any more than you or I do. to persuade politicians to change the law in its favor.

consulting fees. If taxes. Nobody takes an entry-level job at Wal-Mart if they can find anything else. Wal-Mart is profitable. smart ones move up as Wal-Mart grows. Wal-bangers know that won't sell so they lie to us and say that better health benefits won't cost us anything. including campaign contributions and lawyer's fees. The money Wal-Mart gets from we the people who buy from them pays not only the cost of the goods we buy. it pays their electric bill. or campaign contributions go up. Wal-bangers who want Wal-Mart to pay their employees more in either higher wages or more expensive health care benefits are really saying that you and I should pay more when we shop at Wal-Mart. and Chrysler if they hadn't shifted the costs to the union? . think about Wal-bangers who say that the government subsidizes Wal-Mart because a lot of Wal-Mart employees get government health benefits. which is what they would otherwise be doing. not Wal- Mart. It's we who pay Wal-Mart's taxes. The truth is. their health-care bill and every other bill they pay. they'll raise prices to match. Ford. Most low-level Wal-Mart employees have limited skills. Have we forgotten that the cost of health care would have sunk GM. If they didn't work at Wal-Mart. 46 pay Wal-Mart's real estate taxes. legal fees. While we're thinking about who really pays Wal-Mart's bills. it takes in more money than it pays out. their property tax bill. the only other recourse for most of them is not to work at all. Wal-Mart subsidizes the government because their employees don't collect welfare or unemployment. a lot of Wal-Mart employees would get welfare and food stamps in addition to health care. their wage bill. skilled.

47 Wal-Mart's low prices save us a lot of money. do we really want Wal-Mart going the way of Detroit? Loyalty program of Wal-Mart – Loyalty programs are structured marketing efforts that reward. loyal buying behavior — behavior which is potentially of benefit to the firm. . and therefore encourage.

or club card is a plastic or paper card. the purchaser is typically entitled to either a discount on the current purchase. In the United Kingdom it is typically called a loyalty card. and some are even chip cards. rewards card. Cards typically have a barcode or magstripe that can be easily scanned. or an allotment of points that can . advantage card. and in the United States either a discount card. visually similar to a credit card or debit card. a loyalty card. points card. that identifies the card holder as a member in a loyalty program. 48 Various loyalty cards In marketing generally and in retailing more specifically. By presenting the card. in Canada a rewards card or a points card. Small keyring cards (also known as keytags) which serve as key fobs are often used for convenience in carrying and ease of access. a club card or a rewards card. A retail establishment or a retail group may issue a loyalty card to a consumer who can then use it as a form of identification when dealing with that retailer. Loyalty cards are a system of the loyalty business model.

to gather data ever since. introduced a branded Visa card in 2001 and has used it. The store — one might expect — uses aggregate data internally (and sometimes externally) as part of its marketing research. the loyalty card may also be used to access such information to expedite verification during receipt of cheques or dispensing of medical prescription preparations. typically non- disclosure (by the store) of non-aggregate data about customers. using a frequent flyer card). the card is the visible means of implementing a type of what economists call a two-part tariff. The card issuer requests or requires customers seeking the issuance of a loyalty card to provide a usually minimal amount of identifying or demographic data. But Wal-Mart . along with an arsenal of gadgetry. Target Stores. for example. These cards can be used to determine. Where a customer has provided sufficient identifying information. such as name and address. Application forms usually entail agreements by the store concerning customer privacy. 49 be used for future purchases. What Wal-Mart Knows About Customers' Habits- Plenty of retailers collect data about their stores and their shoppers. for example. or for other membership privileges (e. Hence. or whether she is a vegetarian..g. a given customer's favorite brand of beer. and many use the information to try to improve sales. access to a club lounge in airports.

gather more inventory data. or jugs of antifreeze. and it is shot across desktops throughout its headquarters and into the places where it does . according to experts. or lipsticks. By its own count. With 3.from individual Social Security and driver's license numbers to geographic proclivities for Mallomars. such detail is stored for indefinite lengths of time. operated by clerks and managers. mapped and updated by store. and it is increasingly being used to answer discount retailing's rabbinical questions. and often about customers.600 stores in the United States and roughly 100 million customers walking through the doors each week. The data are gathered item by item at the checkout aisle. made by NCR. All of the data are precious to Wal-Mart. Wal-Mart has access to information about a broad slice of America . 50 amasses more data about the products it sells and its shoppers' buying habits than anyone else. so much so that some privacy advocates worry about potential for abuse. like how many cashiers are needed during certain hours at a particular store. Sometimes it is divided into categories or mapped across computer models. To put that in perspective. The information forms the basis of the sales meetings the company holds every Saturday. the Internet has less than half as much data. Wal-Mart has 460 terabytes of data stored on Teradata mainframes. Information about products. by region. at its Bentonville headquarters. In most cases. by state. then recorded. Wireless hand-held units. is most often obtained at checkout scanners.

she said. With so much data at Wal-Mart's corporate fingertips. to see how well its products are selling. called Retail Link. But for the most part.a company like Kraft. Some of the systems it uses are custom-built and designed by its own employees. a senior analyst for consumer markets at Forrester Research. Wal-Mart is also driving manufacturers to invest in radio frequency identification. can tap into a private extranet. By next October. Three years ago. a forerunner of the Internet. and ACNielsen. Wal-Mart executives have spent handsomely for their systems. Companies that sell equipment and software to Wal-Mart are bound by nondisclosure agreements. It also takes pains to keep the information secret. for example. Wal-Mart summarily announced that it would no longer share its sales data with outside companies. you can tell that Wal-Mart considers data to be a top priority. 51 business around the world. the better to keep competitors off the trail. which had paid Wal-Mart for the information and then sold it to other retailers. Wal-Mart hoards its information obsessively. paying $4 billion in 1991 to create Retail Link and signing onto innovations like bar codes and electronic data interchange. what are the risks to consumers? Most have no clue that their habits are monitored to such an . Over the years. Wal-Mart shares some information with its suppliers ." said Christine Overby. like Information Resources Inc. "When you look at their behavior. the company will require its biggest suppliers to tag shipments to some of its distribution centers with tiny transmitters that would eventually let Wal-Mart track every item that it sells. well ahead of the pack.

52

extent. There are no signs - like the ones for Wal-Mart's anti-shoplifting
cameras - advising customers that information is being collected and
stored. And there is no giveback: Wal-Mart doesn't use loyalty cards and
rarely offers promotions based on past purchases.

It is aware, however, that shoppers are concerned about privacy. On its
Web site, Wal-Mart posts a privacy policy that states, in part: "We take
reasonable steps to protect your personal information. We maintain
reasonable physical, technical and procedural measures to limit access to
personal information to authorized individuals with appropriate purposes."

NOT everyone agrees. "People don't know that Wal-Mart is capturing
information about who they are and what they bought, but they are also
capable of capturing a huge amount of outside information about them that
has nothing to do with their grocery purchases," said Katherine Albright, the
founder and director of Caspian, a consumer advocacy group concerned
with privacy issues. "They can find out your mortgage amounts,
your court dates, your driving record, your creditworthiness."

One source of information can be a credit card or a debit card, Ms. Albright
said. Wal-Mart shoppers increasingly use the cards to pay for purchases,
particularly in the better-heeled neighborhoods where the company has
been building stores recently.

Some companies specialize in what is known as data enhancement, in
which a customer's name and address, or a telephone number, can open
the door to additional information. "If Wal-Mart had a customer database

53

and wanted to start e-mailing their customers, we could append their e-mail
addresses," said Sarah Stansberry, director of marketing for AccuData
America, a company based in Fort Myers, Fla., that specializes in such
services but does not use credit card records. With e-mail addresses,
AccuData can track names and home addresses, she added. Other
information follows: "We can access what they paid for their house, and
their mortgage," though not driving records. The company has not done any
work for Wal-Mart, she said.

Ms. Dillman said that she did not think Wal-Mart had ever tried to squeeze
data from credit cards to learn more about customers' buying habits.
Indeed, she said, it wouldn't be necessary. "We can do that without the
credit card information," she said. "We can look at what's happening in the
market, and look at what's happening in other markets that are similar."

WAL-MART uses its mountain of data to push for greater efficiency at all
levels of its operations, from the front of the store, where products are
stocked based on expected demand, to the back, where details about a
manufacturer's punctuality, for example, are recorded for future use. The
purpose is to protect Wal-Mart from a retailer's twin nightmares: too much
inventory, or not enough.

"They recognize that technology is a critical tool for them to have an
efficient supply chain," said Kathryn Cullen, a principal at Kurt Salmon
Associates, a consulting firm, who said that she has not advised Wal-Mart.
"They track the purchases and very quickly route that back to their suppliers
so they can be replenished. They are very strict with their suppliers, but

54

they give them the data that they need."

Armed with sales results from past weeks and months, Wal-Mart meets with
each of its suppliers to establish sales goals for the coming year. Suppliers
are actively encouraged, so to speak, not to miss those goals. A
manufacturer that fails to meet its sales target - or has data-documented
problems with orders, delivery, restocking or returns - can expect even
tougher negotiations in the future from Wal-Mart, which is renowned for its
steeliness in such situations.

Still, achieving sleeker operations is not the whole story. In many ways,
data are used to forecast and drive Wal-Mart's business. "We use it in real
estate decisions, understanding what the draw is like and what the
customers will be like," Ms. Dillman said, referring to the company's
planning for new stores, including the number of shoppers it expects to
attract to each.

When it comes to Sam's Club, Wal-Mart's membership warehouse chain,
"we know who every customer is," she added. So Wal-Mart does a kind of
outreach, contacting nearby convenience store owners, for example, to let
them know that "the items they buy, they could save money on by buying at
Sam's."

AT Wal-Mart, problems are referred to as "exceptions," and technology is
essential for what Ms. Dillman calls "exception management." Within the
company's empire, "we keep watching everything that just happened," she
said. "We are pretty near real time. We can tell people that they need to go

55

do something, and we are within hours, depending on the event."

The "event" may be a truck's failure to drop off or pick up something, or the
delivery of a load of shoes missing their mates. It could be the absence of
an important product in a store's backroom, or in the distribution center that
serves that store. Or it could be an act of nature like the hurricanes that
descended, one after another, on Florida and other parts of the Southeast
this year.
Eventually, some experts say, Wal-Mart will use its technology to institute
what is called scan-based trading, in which manufacturers own each
product until it is sold.
"Wal-Mart will never take those products onto its books," said Bruce
Hudson, a retail analyst at the Meta Group, an information technology
consulting firm in Stamford, Conn. "If you think of the impact of shedding
$50 billion of inventory, that is huge."

The impact will probably be felt by suppliers, he added, but none are likely
to complain.

"You can see the pattern of Wal-Mart's mandates, and as Wal-Mart grows
in power, it is getting more dictatorial," he said. "The suppliers shake their
heads and say, 'I don't want to go this way, but they are so big.' Wal-Mart
lives in a world of supply and command, instead of a world of supply and
demand."

Consumers willingly turn over plenty of information. For example, cashing a
payroll check at Wal-Mart requires a two-step process, said an assistant

" she said. but some people don't like to share that information. Dillman said it was "separated out." and warehoused in a way that requires special permission to gain access. Wal-Mart's focus has been on the products it sells. "The cashier can enter it. Mary. you tend not to gather a . only the driver's license number: "The system will recognize you the next time." Next a customer must enter his or her driver's license number. "All it's linked to is the checking account number. "First you enter your Social Security number into the system. the assistant manager added. One of the most difficult pieces of information to harvest is which customer bought what. "We don't mine that data. For check approval . If payroll checks are cashed regularly at Wal-Mart. who asked to be identified only by her first name.." she said. not to whom it sells them. when we scan your check. Ms. the assistant manager said. Such information is expensive. We don't use it for anything other than the transaction. there is no need to keep punching in the Social Security number." All of that information winds up at the company's office in Bentonville. along with any personal identifiable information. N. pointing to the number pad hooked up to a register in the checkout lane." she added. 56 manager in a Wal-Mart in Saddle Brook. "When you are in the everyday-low-price market. twice." Historically.J.when a customer writes a personal check to pay for something at a Wal-Mart. for example - "we don't keep it any longer than we need it for that transaction. too.

" Ms. other experts said. 'If we get really good at pricing the cold medicine and promoting it and . But Wal-Mart executives tend to care more about how products sell as part of a larger basket." Mr. Naturally. what products are of what interest." Wal-Mart has discovered the potential of its own Web site in learning more about customers. but not all of those products need to be priced at rock-bottom." said Gene Alvarez. an option that Sears. "You can do some association there. "They might say. "Knowing collectively what goes into one shopping cart together tells us a lot more. Dillman said. you have to offer a loyalty program. the Forrester analyst. said Ms. Roebuck and other retailers have had for years. because when you want to get customer-intimate. Overby. telephone numbers through a loyalty card. Alvarez said. address. Dillman said the site was beginning to allow users to buy a product online and have it delivered to a store near them. "Me knowing what you specifically buy is not necessarily going to help me get the right merchandise into the store. Ms. and there's the cost of that loyalty program. 57 lot of information about customers directly because you don't spend a lot of time with them gathering name. "That is the proper focus. a vice president at the Meta Group. Shoppers might buy cold medicine along with chicken soup and orange juice during flu season." Analyzing what ends up together in that cart drives Wal-Mart's pricing. some personal information would have to be submitted as part of the transaction.

" she said.6 million current and former female employees. Lawyers for the women have said that Wal-Mart has the ability to use its human-resources database to calculate back pay for the plaintiffs as well as to determine whether women were fairly promoted and paid. has agreed. there can be such a thing as too much information." If that comes to pass. "They've put into their work force database the information that bears on virtually every facet of compensation." STILL. as Wal-Mart recently discovered. but the entire basket will be 10 to 20 percent less. The judge hearing the case. a lawyer for the plaintiffs. we have that product in stock and also at the best prices. "They have performance reviews. So you can compare people working in the same store." he said. which store they worked in. with Wal- . "The other items in the basket might not be the lowest price in town. The database is unusually detail-rich. to measure whether men and women are paid differently. 58 letting people know that.' then they get people into the store. which is pending in a federal court in San Francisco. hey. said Joseph Sellers. it will be a rare moment indeed. the time spent with the company. Six women brought a sex-discrimination lawsuit against the company in 2001 that was broadened this year to a class of about 1. along with seniority.

The company topped Fortune's list of the world's largest companies for the second year in succession (Refer Exhibit I).5 billion. 59 Mart's carefully assembled data being channeled for a purpose Wal-Mart did not desire. 2003. Considering the modest beginning of this company four decades ago. Wal- Mart's success story is a classic example of a company. Wal-Mart's Cost Leadership Strategy – Introduction For the financial year ending January 31. making it the world's largest company. retailing giant Wal-Mart reported revenues of $244. which became . including the company officials expected Wal-Mart to emerge such a dominant player in the retailing industry (Refer Exhibit II). nobody.

Wal-Mart launched exclusive groceries/drug stores known as "neighborhood markets" in the US (Refer Exhibit III for the various types of Wal-Mart stores). 25 Organizati : Wal . 500. 60 successful by rigorously pursuing its core philosophy of cost leadership. Case Details: Price: Case Code : BSTR096 For delivery in electronic format: Case : 17 Pages Rs. 500 + Rs. it ventured into food retailing by introducing Supercenters. and his company could achieve success by offering consumers better value for their money.2004 (within India): Rs. Wal-Mart's growth during the first two decades was propelled primarily by following the strategy of establishing discount stores in smaller towns and capturing significant market share. The company was able to foster its growth in the 1980s by making heavy investments in information technology (IT) to manage its supply chain and by expanding business in bigger metropolitan cities. Though Wal-Mart had achieved huge success over the decades. In the late 1990s. In the late 1980s. who figured out early that retailing was a volume-driven business. right from the day it began operations in 1962. Wal-Mart was founded by an ambitious entrepreneur. Length For delivery through courier Period : 1962 . when Wal-Mart felt that the discount stores business was maturing.Mart for Shipping & Handling Charges on Themes Pub Date : 2004 . Sam Walton (Walton).

branded and unbranded products at the lowest possible price. Wal-Mart's advertisement describing EDLP said. a merchant with over 15 years of experience in retailing. 1962. These towns were largely neglected by leading retailers like Sears Roebuck & Company. EDLP promised Wal-Mart's customers a wide variety of high quality.000. set up his first discount store in Rogers. Walton introduced the concept of every day low prices (EDLP). In his efforts to attract people from the rural areas to his stores. The store offered a wide variety of branded merchandise at a competitive price. During the initial years. Samuel Moore Walton (Walton). US. offering better value for their money. K-Mart and Woolco. with an average population of 5. 61 Teaching : Available (3 pages) Note Cost Leadership Countries : USA Industry : Retailing Wal-Mart's Cost Leadership Strategy Wal-Mart's Aggressive Pricing-- On July 2. "Because you work hard for every dollar. Walton focused on establishing new stores in small towns. you deserve the lowest price . which concentrated more on larger towns and big cities. a small town in the state of Arkansas.

. it's a great price you can count on every day to make your dollar go further at Wal-Mart."4 From the very beginning. when Wal-Mart was not an established retail player. it's a great price you can count on every day to make your dollar go further at Wal-Mart. Achieving Cost Leadership- Offering products at EDLP."4 From the very beginning. was quite difficult. especially during its early years. Walton made efforts to procure products at the lowest prices possible from manufacturers. Walton's pricing strategy led to increased loyalty from price-conscious rural customers. Explaining his pricing strategy. Walton made efforts to procure products at the lowest prices possible from manufacturers. Wal-Mart's products were usually priced 20% lower than those of its competitors. In retailer language. you can lower your markup but earn more because of the increased volume. You deserve our Every Day Low Price.. Walton said. "By cutting your price."EDLP was extremely attractive to rural customers and emerged as the key contributor to Wal-Mart's growth over the years. thus giving them the maximum value for their money. It's not a sale. 62 we can offer every time you make a purchase. It's not a sale. you can boost your sales to a point where you earn far more at the cheaper retail price than you would have by selling the item at the higher price. The company . It helped the company to generate more profits due to larger volumes. He always shared these savings with customers by charging them lower prices.

The stores were set up in large buildings. The company imposed an upper limit for its rent payment at $1.355 discount stores. The reinvestments made by the company helped it to maintain its cost leadership position. Wal-Mart in the 1990s-- In the early 1990s. The modus operandi was to first establish discount stores. The company did not invest on standardized ordering programs and on basic facilities to sort and replenish the stock. The surplus generated was reinvested in building facilities of an efficient scale. By 1991. 120 Sam's Clubs and three Supercenters being served by 16 distribution centers. Wal-Mart started focusing on its Supercenters and Sam's Clubs to fuel growth. . purchasing modern business-related equipment and employing the latest technology. Wal-Mart imposed a strict control on its overhead costs.. 63 aggressively followed a cost leadership strategy that involved developing economies of scale and making consistent efforts to reduce costs.00 per square foot during the late 1960s.. Wal-Mart's mammoth retail network comprised of 1. Not much emphasis was laid on the interiors of the stores. From the start. Wal-Mart expanded its operations into the Northeast and West of the US by placing a lot of emphasis on the groceries business through its Supercenters. after which the best performing stores were to be converted into Supercenters. while ensuring that the rent paid was minimal.

64 However. . buying less than 20% of its goods directly from offshore suppliers. Reduce Use of Middlemen Company Buys Less than 20% Direct Currently. Wal-Mart decided to focus on Super centers to propel its growth.. It turns out that Walmart. Following Walton's death in 1992. So. Global Supply Chain: Walmart to Centralize Global Sourcing. Wal-Mart had yet to enter as many as 23 states in the US. leading to savings of billions of dollars per year. it was estimated that the size of the groceries business in the US was three times that of the discount store business. David Glass (Glass) succeeded him as the CEO of Wal- Mart. Sees Savings Potential of 5-15% SCDigest Editorial Staff- Walmart this week announced a sweeping plan to consolidate its global procurement functions and reduce the use of intermediaries in its global sourcing processes. the world's largest importer. In the early 1990s. Glass viewed food retailing as a key driver to increase revenue growth in the 1990s.. at this time. still relies on the use of sourcing intermediaries for the bulk of its global sourcing initiatives.

(Walmart's global sales are about $400 billion. with each of the 15 countries where it operates buying goods from the same suppliers. it often operates in a very decentralized mode. Now. esp. Castro-Wright says Walmart has established four global merchandising centers for general goods and clothing. rather than working through import companies and agents. depending on the category. leading to billions in savings. Accelerate Speed to Market. 65 In addition. If it can do that and gain additional benefits from centralized purchasing. according to Walmart vice chairman Eduardo Castro-Wright. It is also planning to shift to direct purchasing of its fresh fruit and vegetables on a global basis. Walmart Leverages Global Scale to Lower Costs of Goods. Improve Quality of Products-- Today's announcements." . says the company's goal is to switch that ratio. for its growing private label brands. Castro-Wright estimates the potential cost reduction from taking out the middleman mark-up of 5-15%. are "important elements in the company's strategy to deliver even greater value to its customers and shareholders.) The move to more direct procurement will be facilitated by greater centralization of its sourcing operations. Eduardo Castro-Wright. so that within a few years it is buying direct from the manufacturer for 80% of its purchases. Vice Chairman at Walmart. including an office in Mexico City focused on emerging markets.

"Our new strategy and structure should drive significant savings across the supply chain. 66 Walmart first announced a consolidated global sourcing structure centered around new Global Merchandising Centers (GMCs) at its annual meeting for the investment community in October. Walmart also finalized a series of agreements with Li & Fung." Castro-Wright said. has been promoted to executive vice president and will lead Walmart's Global Sourcing. Kolodzieski will report to Castro-Wright. is expected to build capacity that would . Ed Kolodzieski. As part of this new strategy. and Seiyu. which is forming a new company to manage the Walmart account.K. "The newly-established Global Merchandising Centers represent the largest and most important element of our new sourcing strategy. "These centers will create alignment between sourcing and merchandising and drive efficiencies across various merchandise categories. The agreements are non-exclusive and do not include volume or shipment commitments. The strategic alliance between the two companies will allow Walmart to realize the benefits of consolidating a portion of its sourcing portfolio. currently president and CEO of Walmart Japan Holdings G. Li & Fung." Castro-Wright said. Today." The core of the company's overall global sourcing strategy will be to continue increasing direct sourcing for the company's private brands. private brand merchandise represents more than $100 billion in purchasing annually. This new structure is expected to leverage the company's global scale in both general merchandise categories and global food sourcing.

Inc. "By realigning our resources. or "Walmart. Walmart employs more than 2. "In sum.com. Walmart ranked first among retailers in Fortune Magazine's 2009 Most Admired Companies survey.1 million associates worldwide. corporate philanthropy and employment opportunity. Online merchandise sales are available at www.com. 67 enable it to act as a buying agent for goods valued around US$2 billion within the first year." About Wal-Mart Stores. Additional information about Walmart can be found by visiting www. leveraging our scale." serves customers and members more than 200 million times per week at more than 8. . (NYSE: WMT). With fiscal year 2009 sales of $401 billion.000 retail units under 53 different banners in 15 countries.-- Wal-Mart Stores.com and www. A leader in sustainability. and restructuring our relationship with suppliers." Castro-Wright said.samsclub. we are redefining how we source products that are imported into Walmart retail markets around the globe. we will enable our businesses around the world to offer even more competitive pricing on merchandise and to provide our customers a clear and compelling assortment of better quality products at lower prices.walmart.walmartstores. Inc.

68 Investors of Wal-Mart-- .

69 Recent Financial News - Nov 16. Company raises 2010 full-year EPS guidance Nov 10. Walmart Appoints Jeff Davis to Senior Vice President and 2010 Treasurer . Walmart reports third quarter EPS of $0.95.

2010 Next Year's Capital Spending to Increase Slower Than Sales Oct 11.Hour Class Action Lawsuits May 12.S. U. Supreme Court Petition 2010 May 21. Inc. Corporate Statement Regarding the Settlement of Two 2010 Additional Wage-And. Webcast Agenda for the 17th Annual 2010 Meeting for the Investment Community Oct 01. Walmart Announces Capital Strategy to Drive Global Growth. Wal-Mart Stores. Humana and Walmart Announce Innovative Medicare Part D 2010 Prescription Drug Plan Company Statements Aug 25. 70 Oct 13. Corporate Statement Regarding Recent Settlements of the 2010 Ballard Wage- .

Walmart Settles Civil Case with State of California 2010 Mar 01. . We know we can make the greatest impact on our communities by supporting causes that are important to our customers right in their own neighborhoods. we believe in a philosophy of operating globally and giving back locally. We’re proud to be a "store of the community" for all of the communities we serve by helping to provide financial and volunteer support to more than 100.000 charitable and community-focused organizations. Corporate Statement Regarding the Recent Settlement of an 2010 Employment Discrimination Lawsuit Community & Giving - At Walmart. 71 And-Hour Class Action Lawsuit May 03. and by using our locations to provide opportunities for our customers and associates to give back.

Chile Earthquake and Tsunami Relief We're very concerned about conditions in Chile after the earthquake. veterans. Every Day is Veterans Day At Walmart. and our thoughts are with everyone who has been impacted by the devastation. we are thankful for the service and sacrifices of our nation’s military men and women. stepping up efforts to help end hunger in America. and their families – and we believe that every day is Veterans Day. Haiti Earthquake Relief . 72 Hunger Relief Walmart and the Walmart Foundation have committed $2 billion cash and in-kind.

.5 Million through 2010 Walmart and Sam's Club Teacher Rewards Program Aug.Educators Awarded $4. . along with the Walmart Foundation. .5 Million To Help Share 2010 Our Strength® Expand Family Nutrition Education Programs In The U.S. 22.Walmart Announces Holiday Campaign 2010 Focused on Fighting Hunger Nov. 30. 15. . Recent Community & Giving News From the Press Room Section Nov. our operations around the world.Ensure Your Kids Are Eating Nutritious Meals - 2010 Cook Together.Walmart Donates $1. . are responding. 73 In response to the tragic earthquake in Haiti. 08. According to Boys & Girls Clubs of America Survey Jul. 31. .Walmart Commits $10 Million to the Veteran 2010 Community Aug.

2 billion spent in 2009. Maintaining a diverse mix is the key to our success. we created a formal supplier diversity program designed to expand our base of minority. Currently. Walmart Standards For Suppliers Supplier Diversity In 1994. we do business with more than 2. we work hard to ensure that the products on our shelves meet the unique needs and wants of every community we serve.and women-owned suppliers. Past Events . 74 Suppliers- At Walmart. Some sell products in just a few stores. others supply nationwide. The program has grown from an initial $2 million in 1994 to nearly $9. That means that we partner with thousands of suppliers in every merchandise category that range from one person shops.500 Minority. to multi-national corporations.and Women-Owned Business Enterprises (MWBE). Learn more about our program and find out how you can become a Walmart or Sam’s Club supplier.

21.Walmart Announces Global Responsible Sourcing Initiative at China Summit . 2009 . 02. Supplier Sustainability Assessment Webinar Learn how best to complete the Supplier Sustainability Assessment and discover sustainability opportunities.and Women-Owned Suppliers Dec.Walmart Launches Green Jobs Council Oct.Walmart sets new rules for suppliers. 23. Recent Suppliers News From the Press Room Section Jul. 2008 .Made In Oklahoma Coalition: Walmart boosts Oklahoma food manufacturers Apr. 23.Walmart Reports Record Increase in Business with Minority. 2008 . 2008 . 23. 75 5th Annual Sustainable Packaging Expo This expo provided resources and information to learn about making product packaging more sustainable. 2010 . starting in China Oct. as well as understanding the ins and outs of Walmart's packaging scorecard.

We are continually working to expand affordable access to care for our Walmart and Sam’s Club associates and their families. providing our associates and their families with health care coverage is a priority for Walmart. That’s why we’ve joined together with leaders in government. our associates and the people in our surrounding communities live healthier lives. we see an opportunity to impact not only our customers and our associates but also to advocate for broader change. Wal Mart Associates As an employer. Wal Mart Customers Millions of people around the world are struggling with the costs of health care. 76 Health & Wellness Program of Wal Mart- At Walmart. we are using the strengths of our business to drive costs out of health care and bring our customers the lowest prices on the products and services they need to stay healthy. we have the opportunity to positively impact the lives of millions of people every day. We also work with several charitable organizations to ensure that communities in need receive critical health information and treatment. That’s particularly true when it comes to helping our customers. Wal Mart Neighbors Finally. . business and labor to call for reform in the American health care system. To help ease the strain. and why we are working closely with other business leaders and academics to advance health information technology.

we can improve the quality of care available to all Americans. . Photo Center .100 Stores and Clubs Across U. Shoes & Accessories 2. 09. . . Recent Health & Wellness News Nov.S. Walmart Supports "Let's Move" Initiative 2010 Oct. Walmart and Sam's Club to Offer Flu Shots in More Than 2010 4. 77 By combining the strengths of many. 09. 1 Sep. 15.C. . 01. Craft & Party Supply 3. 01. Jewelry 4. Humana and Walmart Announce Innovative Medicare Part 2010 D Prescription Drug Plan with Lowest National Monthly Premium Offered in all 50 States and D. Walmart Pharmacists Prepare and Offer Tamiflu® for Oral 2009 Suspension Departments of Walmart- 1. Health & Beauty 5. Apparel. . New Humana Walmart-Preferred Rx Plan (PDP) Has First 2010 In-Store Enrollee Oct. Feb.

Auto & Tires 11. 78 6. we believe that business wins when everyone matters. Movies 8. . Roll Back 9. Electronics 7. Grocery 14. and that the true strength of diversity is unleashed when each associate is encouraged to reach their full potential. Pharmacy 15. Furniture 12. Books Diversity - At Walmart. Sports & Fitness 10. Toys 13. Diversity then becomes the foundation for an inclusive.

it helps us provide a positive work environment for our associates – 2. Diversity and Inclusion are enduring values embedded into our culture. develops our associates. partners with our communities. and builds upon an inclusive supplier base. associate engagement. And. communities and suppliers in the area of Diversity and Inclusion. supplier . Our commitment to Diversity and Inclusion helps us serve our customers better. serves our customers. 79 sustainable business that embraces and respects differences. Dedication to Diversity and Inclusion touches every part of our business. Recent Events - A Year of Accomplishments The 2008 Diversity and Inclusion Year of Accomplishments Report highlights Walmart’s commitment to associates.1 million worldwide. these values are fundamental to both our business and mission of saving people money so they can live better. We make diversity part of our business plan. Diversity and Inclusion — It’s part of our success. leadership training. ensuring we can continue to be a global leader in all aspects of Diversity and Inclusion. From our board of directors to our associates and customers. With programs that touch recruiting. customers.

80 development. . community outreach and community giving. Walmart received 37 separate awards and recognition in 2008 for its commitment to advancing Diversity and Inclusion at all levels of the company.