Walmart

Changes Tactics
Created By:
Syndicate 3
Muhammad Hasan Albana 29120477
Ethandra Farah Adzhani 29120541
Nabila Humaida 29120632
Business Overview
● On July 1962, Sam Walton opens the first Walmart store in Rogers, Arkansas.
● In 1967, The Walton family owns 24 stores, ringing up $12.7 million in sales.
● In 1969, The company officially incorporated as Wal-Mart Stores, Inc
● In 2006, Wal-Mart become the number one retailer in the United States and is
the currently the world’s largest private employer.
Business Issue
1. Wal-Mart Store is finding out that what plays in Peoria isn’t necessarily a hit in Suburban San Paulo.
- Adapting to local tastes may have been the easy part
- However Wal-Mart caused the competitors to sign red link
1. Deep Pocket
- Walmart has revised its merchandising in Brazil and Argentina and made other changes
- Walmart’s global expansion drive, which is targeting not only South America but also China and Indonesia
1. A small operation so far
- The six-year-old international operation is relatively tiny; it accounted for only 4.8 percent of Wal-Mart’s 1996
sales.
- Mr. Glass said he expects international growth to account for a third of Wal-Mart’s annual increase in sales and
profits within three to five years.
1. Losses forecast
- Carrefour drives hard bargains with its suppliers, can afford to play low-ball because it has the critical mass that
Walmart lacks here
Business Issue
5. Distribution problems
- Wal-Mart’s effort to stock such a wide variety of merchandise is hurting it.
- The biggest issue in Walmart is shipping product on time and getting on the shelf.
- Local suppliers couldn’t meeting Wal-Mart’s specifications (easy-to -handle packaging, QC) → retailer rely
on imported goods → become problem if Brazil’s economic stabilization policies falter

6. Various mistakes
- Walmart’s troubles in South America stem partly form its own mistakes.
- Wal-Mart has also been slow to adapt to Brazile’s fast-changing credit culture

7. Problems called temporary

- Wal-Mart’s Mr. Glass characterized the missteps as temporary problems and inevitable in entering a new
market.
Business Objective
1. Reasons for Wal-Mart global expansion
2. Benefit of having suppliers in different countries
3. Pitfalls and opportunities Wal-mart may face in the next few years
4. Need for strong centralized control of stores
5. Need for strong local control of stores
6. Sources of risk in global supply chain and process of mitigating risks
Question
1. Other than a need to expand, what other reasons would Wal-Mart have for
opening stores globally?
2. Why would it be beneficial for Wal-Mart to have supplier in different
countries?
3. Why would Wal-Mart want strong centralized control of its stores? Why would
Wal-Mart want strong local control of stores?
4. What pitfalls and opportunities, other than those mentioned in this case, will
Wal-Mart face over the next few years?
Question 1. Other than a need to expand, what other reasons
would Wal-Mart have for opening stores globally?

1. To earn more value

2. To capture new and emerging markets in South America, Indonesia and China
Because US markets are saturated and overseas markets have
opportunities for growth
3. Global expansion fulfills the dream of having a true multinational image
Question 2. Why would it be beneficial for Wal-Mart to have supplier in different countries?

In addition to cost savings, having suppliers in different countries provide redundancy in

supply chain. Due to any sources of risk, the supply of items may be stopped or delayed or a
particular supplier may increase the rate. Therefore,it provides price competition, price
stability, and supply stability.

Having suppliers at different geographical locations in different countries also paves way for
future expansion in various other countries and for strategic logistics network. Depending
upon where a client is located merchandise can be sent to from any supplier.

Other benefits Wal-Mart would gains are the local suppliers have knowledge of culture,
relationships formed, and communication boundaries.
Question 3. Why would Wal-Mart want strong centralized control of its stores? Why would Wal-Mart want strong local
control of stores?

Strong centralized control

1. Power > efficiency > Uniformity

2. Company objectives (provide safe, affordable food and other products to people around the
world)
3. Saves time and money compared to decentralization.

Local control

4. Adapt to cultural preferences

5. Avoid product mishaps
Question 4. What pitfalls and opportunities, other than those
mentioned in this case, will Wal-Mart face over the next few
years?

Pitfalls Opportunities

● State of economy ● Expand to South America and

● Value of the dollar Asia
● Update Technology
● South America taxes
● Customer service
● Employee treatment
Thank You