[Wal-Mart Stores, INC]

Case Study | Principle of Management

By LI Jiahua, Bastien Prunaretti

Jules Coustet and LI Jingyan
CONTENTS


ONE TWO THRRE FOUR

Discount Retailing Store Operation Management of Purchasing, Experiments and

Industry & Market And Technology Distribution and Marketing Evolution
Company History
 
ONEINTRODUCTION

Wal-Mart Stores, Inc. is an American multinational retail

corporation that operates a chain of hypermarkets, discount
department stores, and grocery stores, headquartered in
Bentonville, Arkansas The company was founded by Sam Walton in
1962 and incorporated on October 31, 1969. As of October 31, 2019,
Wal-Mart has 11,438 stores and clubs in 27 countries. Wal-Mart is
the world's largest company by revenue, with US$514.405 billion,
according to the Fortune Global 500 list in 2019. It is also the largest
private employer in the world with 2.2 million employees.
 ONE

Retailing Mode:
Department
Discount Retailing Stores: Independent specialty stores

Industry & Market Retail establishment

offering a wide range Department stores
of consumer goods
In the 1970s, department stores came
The first American
under heavy pressure from discounters.
department store was
founded in 1825 in New
And have come under even heavier
York City.
pressure from e-commerce sites since
2010

ONECOMPANY HISTORY

Listed on the New

 York Stock Exchange
Expanded into Rapidly expanded into
Mexico in 1991 and the world's largest
Canada in 1994… corporation

 1970s  1990s  2010s 

First Wal-Mart Building

Stores in warehouse and
1962 distribution
center By 1990, Wal-Mart
 surpass its rivals Kmart
and Sears
became the largest U.S.
retailer by revenue
 Main Strategy of Wal-Mart expansion

a.Focusing on communities with population from 5000 to 25000

b.Filling the territory around the warehouse and distribution center

 Store Operation And Technology

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
TWO Management

• Definition:
• Management is using resources in an efficient a
nd effective way so that the end product is wort
h more than the initial resources.

Wal-Mart’s stores operations fits perfectly

with this definition

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
TWO Store operation, technology

• Sam Walton’s intuition on small town’s market

Target: Towns of 5000 to 25000 people

• But… the distribution is complicated…

Sam Walton

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
TWO Walt Mart Discount Stores
Look
Organization

Goals
Strategy

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
TWO Sam’s Wholesale Clubs
• Concept: Giant warehouse where
customers can buy in large

• Surfaces, organization , goals

• 2 types of members: wholesale m

embers and group members
The first Sam’s Wholesale Club

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
TWO Technology

• Planning is a really important part of WM developme

nt
• Defining goals of fast communications, more control,
using new technologies in order to achieve it
• Quick response program
• Mid 70s Technology used to achieve these goals : co
mputers, networks

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
TWO Technology
• 1984: they have their own private satellite dedicat
ed to :
• Collect and transmit information
• Connect stores and distribution centers with the h
ome office (Before this technology : by telephone
=costs)
-Broadcast communication
-data transmission Launch of the Satellite
- fast credit card authorisation
- enhanced EDI transmisson
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 Store Operation And Technology

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
THREE Purchasing and distribution
The controller in price:

Other methods Many suppliers

Priority
Their highest priority is making
sure everybody at all times in all
04/23/2021 cases knows who is in charge, it’s

THREE Purchasing and distribution
Distribution centers:
• 16 distribution centers
• 10000 workers
• Over 300 million cases of merchandise
• 77 % of Wal-Mart Store's purchases were sh
aped from the company's distribution cente
rs

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
THREE Centralized control over the stores

• Weekdays-district managers traveling t

hroughout their territories
• Friday operations meeting share inform
ation
• Following the meeting-inform the decisi
ons of the meeting

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
THREE Marketing
Marketing
Word of mouth
• advertising
• according to an estimate by Advertising Ag
e,
• Wal-Mart only use 0.5%of every sales on a
d
’BUY AMERICAN’ Program
• good at identifying key issues
• ‘we buy American whenever you can, so y
ou can too’ Ad published by Wal-Mart
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 Experiment and Evolution

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 First hypermart 1987, Garland Texas photo


FOUR Hypermarts
• 220,000 square foot (20,000 m²)
• Fast food restaurant kiosks, general mer
chandise products, and other types of s
ervice businesses
• A place designed for the customer.
• Initial projections were approximately $
100 million in annual sales
First Hypermart, 1987, Garland
Texas

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
FOUR Supercenters
• Differed from the Hypermart in
the sense that it was smaller
100,000 to 150,000 square feet
• 1st Store opened in1988, Missouri
• Easier to locate, to build and to
supply.
• $155 million generated by the 3
first stores First Supercenter, 1988, Missouri
• 2019: 3569 supercenters

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 In 2012, Walmart
had a turnover of
FOUR A Great Evolution $469 billion and a
profit of $17.6
billion.17 Walmart
is the second
• Wal-Mart largest company
1995 employed
1,140,000
2006 in the world in
terms of sales.
2018
• Wal-Mart partners, With 2.1 million
launches making the employees
internationally company the working in more
by opening its world’s largest than 6,100
first store in private supermarkets
Mexico City employer and
hypermarkets

• 239Supercent • Wal-mart • The Walton

ers, leave Korean Family earn
• 433 Sam's and German $4 million per
club markets after hour or $100
• 276Internation losing millions million a day.
al Stores of dollars Their
1991 •
•
$93,6 Billion
675 000
1999 2012 employees
are paid $11
employees per hour
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
FOUR Wal-Mart Effect
• Wal-Mart Effect is defined as the
impact of setting up a large store
that will drive out small
businesses and lead to lower
wages for employees of
competing merchants. Conversely,
it can have some beneficial effect
on inflation by increasing the
purchasing power of customers
Representation of Wal-Mart Effect in South Park
S08E9

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 Conclusion

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
Conclusion
• Largest Retailer in the • Low net profit
World margins
• Low Pricing strategy • Employees
• Global Presence treatment
• Supply Chain • Business Model
• Huge span of

S W Control

O T
• Global expansion • Fierce
• Strategic Alliance Competition
• Product Quality • Price are rising
• Online Presence • Social Trends


Thanks for
listenning