WAL-MART

4

Group 5 Ajith Jacob (Roll no 65) Deepak Kumar Sinha(Roll no 75) Lisa Mohapatra(Roll no 85) Pranjal Choudhury(Roll no 95) Sandeep Kumar(Roll no 105) Swati Gupta(Roll no 115)

OBJECTIVE .

PEST Political  Tight government standards ensured minimum quality of products Environment ² Social  Awareness and acceptance of self-service model Technological .

hence bargaining power low Bargaining power of buyers ² Low Low switching cost Threat of Substitutes ² Low .PORTER·S MODEL          Entry barrier ² Medium Access to distribution channels Access to favorable store locations High Cost Bargaining power of suppliers ² Low Many suppliers.

.PORTER·S MODEL ‡ Competition ² High  High price competition  Higher competition presence in bigger markets.

mostly on expandable spaces  Rent 1. lowest among major discounters  Distribution network reduced store inventories. more space/store available  High quality store ambience  Computerized inventory tracking system  Differential pricing based on competitor presence  Twice amount of sales per square foot compared to competitors .  95% of stores leased.SWOT  Strength ²  Considerable autonomy to store managers to plan the space allocation  Only 20% direct supply from vendors to stores. rest through hub-spoke model  Distribution centers catered to 175 stores within 150-300 mile radius.8% of sales.

2% of sales. regional and national markets  Threat  Increased Ad expenses as it moved to mid-sized towns and larger areas  Promotions could encourage forward buying.SWOT  Weaknesses  Licensing of specialty departments contributed 0. which combined with ¶no questions asked· returns policy can affect inventory .4%  Strong price based competition  Competition across local. industry average 0.

SWOT  Opportunity  UPC scanning would speed checkouts. Targeted full conversion by 1989. bypass paperwork and simplify inventory management.  $20 million satellite network to ease real time communications and cap costs by reducing telephone bills .

VALUE CHAIN ANALYSIS Valuable Purchasing Distribution Store Operations Marketing Human resource Management & Administration Technology Yes Yes Yes Yes Yes Difficult to Imitate No Yes No Yes No Rare No Yes Yes Yes Yes Difficult to organize No yes No Yes No Yes No Yes No .

BLUE OCEAN STRATEGY Discounting in small towns Southwestern towns .´Offering prices as good or better than that were four hours away by carµ Wal-Mart stores located in towns with population between 5000 and 25000. a higher proportion than rest of the industry Target Rural Communities .

COMPETITIVE STRATEGY Cost Leadership ² How? ‡Location Advantage ² located in towns with population between 5000 and 25000 ‡Direct Store Delivery as well as Two step hub and spoke distribution ‡Focus on hard goods for more sales and footfalls ‡Marketing strategy ² ´We sell for lessµ. ´Everyday low Pricesµ ‡Flexibility to store managers in setting up store pricing as compared to central pricing by competitors ‡High Bargaining Power with suppliers ‡ .

SHOULD WAL-MART DIVERSIFY  Core competency of Wal-Mart ² Every day low prices.  Can wholesale and retail formats co-exits for Wal-Mart profitably. .  Fall in gross margin by 1% due to SAMs club.  Current Dilemma ² Whether SAMs Club can co-exist with its competitors profitable and enjoy profits.

.SUGGESTIONS  SAMs Club inline with Wal-Mart·s Core Competency.  Wal-Mart should concentrate on lower population market(1000-5000 market).

THANK YOU .

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