Introduction to Management

ABDULLAH MAQSOOD Reg. # 11

BsBA-DDP 2nd Semester

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

$300

$210

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Key Statistics on Wal-Mart
• Founder Sam Walson & Family – owns 40% of WalMart • Headquartered at Bentonville , Arkansas , US • Total No. of Stores – 8970 Stores
• Stores in US – 4065 Stores in US • Outside US – 2701 Stores in 14 Countries

• Total Employees – 1.5 Million • Total Sales – 348.6 billion in 2010 • Net Income – 11 billion in 2010
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What is Wal-Mart
• • • • • • • • • • World’s biggest retailer Sells Grocery & General Merchandise One Hour Photo Studio Pharmacy & Optical Centre Tire & Lube Express Gasoline station Fast Food Outlet Garden Centre Pet Shop Also feature hair and nail salons, a video rental store, a family fun center, a branch of a local bank

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

Wal*Mart’s Discount Stores and Sam’s Legacy 7

WALMART

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

Wal*Mart’s Discount Stores and Sam’s Legacy 8

WALMART

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

Wal*Mart’s Discount Stores and Merchandising 9

WALMART

Wal-Mart Subsidiaries
• Wal-Mart Stores Division US
• Wal-Mart Discount Store • Wal-Mart Supercenter • Wal-Mart Neighborhood Market

• Sam’s Club • Wal-Mart International • Private Labels (Sam’s Choice , Great Value , Equate ,Smart Price)

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

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Wal-Mart – Market Share / Competitors
• Wal-Mart is three times big than its nearest competitor Carrefour SA • z

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Wal-Mart Corporate Values
• • • • • • • Constant Improvement Shared Passion, Vision & Organization Culture Customer Focus Speed Execution Improvements In Basic Operations Community Involvement

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What Wal-Mart does to achieve those values
• Competitively Reduced Cost (Puts All Gains & Savings Into Reducing Prices) • Consumer-centric Sales • Localization • Co-operated Suppliers • Retail-tainment & Shop-ability: Aisles, Lighting & Signs • Store-manager Autonomy
Cont.
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What Wal-Mart does to achieve those values (Cont.)
• • • • • • One- Stop Shopping Keep Customer Shopping: Added Food & Services Full Stock Register Full Product Line Merchandising Ladder Private Branding

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Wal-Mart
Mission/ Vision To give ordinary folk the chance to buy the same thing as rich people.

Product Strategy

1. Lowest prices across-board the product lines 2. Product USP: core competency
•Low prices, In-stock positions, Customer service

Service Strategy

1. Respect for the individual 2. High standards of service 3. Constant strive for excellence middle-class, lower middle Consistent positioning- “Always low prices” 1. Food retail 2. Non-Food retail 3. On-line food retailer Personalized customer service Co-branding with McDonalds

Segmentation Positioning

Activities

Intangibles Co-branding

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Sector Strategy: Diversification
Diversified into

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

1. Non-food

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

Wal-Mart Stores, WalMart.com Sam’s Club 12 international locations
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Consumer Global Brand Opportunities: Wal-Mart

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Supply chain integration in developing countries

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Strength in supply chain
• • • • • Efficient consumer response Vendor-Managed Inventory Enterprise resource planning Customer relationship management Sales force automation

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SWOT ANALYSIS (GLOBAL)
• • • • • • • •

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

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

Threats

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

   

Understand Consumer behavior Market Segmentation Format of stores– super centers or hypermarkets Wal-Mart to adopt a blended model of its traditional format tweaked to fit the reality of Indian real estate

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Environmental Goals

•To be supplied by 100% renewable energy

To create zero waste
To sell products that sustain our resources and the environment

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Conclusion:

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

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Q & A Session

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Web References
• • • • • • www.walmartfacts.com www.gartner.com www.forrester.com www.hoovers.com www.wikipedia.com www.tsmg.com (Tata Strategic Management Group) • www.finance.yahoo.com • www.ficci.com
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Thank You

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