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By: Megan Dow, Kristin Belanger, and Angle Bourgoin

Overview of WAL-MART Presentation


Overview of WAL-Mart History Stocks Stock Information The Divisions BCG Their Mission and Vision Statement New Mission and Vision Statement External Opportunities and Threats CPM EFE Internal Strengths and Weaknesses IFE Analysis SWOT Matrix SPACE IE Matrix Grand Strategy Matrix Key Ratios Different Strategies QSPM Decisions EPS/EBIT Analysis Implementation Evaluation Update! References Questions?

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Overview of Wal-Mart
There are 4 different segments Wal-Mart Stores- sales amounted to 64.3% Discount Stores- 1,568 U.S Supercenters- 1,258 U.S Neighborhood Markets- 49 stores U.S Sams Club- sales amounted to 13.0% 525 stores U.S Is a member only, cash and carry operations International- sales amounted to 16.7% Discount stores- 942 Sams Clubs- 71 Supercenters- 238 Neighborhood Market- 37 Other- amounted to 6.1% McLane is the nations largest distributor of food and merchandise to convenience stores

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History of Wal-Mart
In 1945 Sam Walton opened the first Ben Franklin franchise in Newport Arkansas and operated them with his wife, Helen and brother, Bud. These were small chains that were very successful. In November of 1962 Wal-Mart was opened. Wasnt until mid 1970s that Wal-Mart began to grow.
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1st IPO in 1970. Then 100 shares were worth $1,650 dollars and now the same 100 shares are worth more than $6 million dollars. In 1999 named #1 stock on the Dow.

History
1987
2 new concept implemented Hypermarkets, which sell everything including food Supercenters which are scaled down supermarkets Also David Glass named new CEO of Wal-Mart

In 1992 Sam Walton Died and in 1996 Bud Walton died.


In 1995 Wal-Marts Annual Report was dedicated to Bud.

New president and CEO H. Lee Scott states that While our history is rich with success, theres no question that our best years are yet to come.

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WAL-MART

Years since started


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Important People
Co-founders, Sam and James Bud Walton started 1st Wal-Mart in Rogers, Arkansas, 1962 David Glass was named president 1984, in 1988 he became chief executive officer S. Robson Walton named chairman of the board in 1992 President and CEO in 2000- H.Lee Scott Vice President- Laura Philips

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Important Facts
In 2004, we conducted more than 15,000 factory inspections - that's an average of more than 40 a day. We serve more than 138 million customers per week. Wal-Mart employs 1.6 million associates worldwide in more than 3,700 stores in the US and more than 1,500 throughout the rest of the world.
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WMT
Traded on NYSE Symbol WMT Index Membership: Dow Jones Composite Dow Industrials S&P 100 S&P 500 S&P 1500 Super Comp Sector: Services Industry: Discount Variety Stores

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WMT vs Dow Jones & S&P 500

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WMT vs Industry

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WMT 5 years

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WMT 30 years

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Stock Splits
2:1 Stock Splits May-71 Mar-72 Aug-75 Nov-80 Jun-82 Jun-83 Sep-85 Jun-87 Jun-90 Feb-93 Mar-99 Shares 200 400 800 1600 3200 6400 12800 25600 51200 102400 204800 Cost Per Share 8.25 4.125 2.0625 1.03125 0.515625 0.257813 0.128906 0.064453 0.032227 0.016113 0.008057 $ $ $ $ $ $ $ $ $ $ $ Market Price on Split Date 47.00 47.50 23.00 50.00 49.88 81.63 49.75 66.63 62.50 63.63 89.75 Record Date 5/19/1971 3/22/1975 8/19/1975 11/25/1980 6/21/1982 6/20/1983 9/3/1985 6/19/1987 6/15/1990 2/2/1993 3/19/1999 Distributed 6/11/1971 4/5/1972 8/22/1975 12/16/1980 7/9/1982 7/8/1983 10/4/1985 7/10/1987 7/6/1990 2/25/1993 4/19/1999

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Stocks
WMT Market Cap: Employ-ees: Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Oper Margins (ttm): Net Income (ttm): EPS (ttm): P/E (ttm): PEG (5 yr expected): P/S (ttm): 193.36B 1,800,000 8.60% 312.43B 23.06% 23.25B 5.93% 11.23B 2.682 17.30 0.99 0.61 COST 26.06B 60,500 11.00% 55.68B 12.37% 2.06B 2.79% 1.08B 2.215 24.97 1.72 0.46 Pvt1 N/A 133,0001 N/A 19.70B1 N/A N/A N/A 1.11B1 N/A N/A N/A N/A TGT 45.01B 338,000 11.50% 52.62B 32.15% 5.73B 8.22% 2.41B 2.708 19.08 0.96 0.85 Industry 1.84B 18.62K 9.60% 3.63B 28.72% 268.09M 6.37% 128.53M 1.16 17.08 1.07 0.51

COST = Costco Wholesale Corp. Pvt1 = Kmart Corporation (subsidiary or division) TGT = Target Corp.

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Industry = Discount, Variety Stores


1

= As of 2005

Their Mission Statement


They dont have a formal mission statement They are most interested in the customers needs The culture consists of Respect for the individual Service to our customers Strive for excellence If they did have a formal mission statement it would be, To provide quality products at an everyday low price and with extended Customer servicealways.

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Mission Statement

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Their Vision Statement


"The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience." - Sam Walton (1918-1992)
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New Mission Statement


Our mission is to provide goods and services for our customers at everyday low prices. With our innovative technology we strive to have merchandise ranging from food, clothes, music, etc. on hand 24 hours a day 7 days a week. We are committed to the growth of Wal-Mart and challenge ourselves to be better. We strive to have the best, be the best, and provide quality and assurance to our customers. Our employees are a huge asset to our company, and we would not be the company we are today without them. They have a huge impact on what our company was, what it is, and what it will be. We also feel it is important to give generously to those who are less fortunate than others, which is why Wal-Mart donates thousands of dollars a year to different organizations.

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New Vision Statement


Our vision is to provide good quality and services to our customers while remaining the market leader and striving daily to be the most admired company.

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Divisions of WAL-MART
McLanes Neighborhood Markets International Sams Club Supercenters Distribution Centers

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McLanes
Nations largest distributor of food and merchandise to convenience stores. In 2003 was sold to Berkshire Hathaway, Inc. so Wal-Mart could focus on core retail business.

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Neighborhood Markets
Began in 1998 Located in market with Wal-Mart Supercenters Offers customer groceries, pharmaceuticals & general merchandise. Provides 28,000 items to customers.

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International
Wal-Mart expanded so that customers everywhere would associate its name with low cost, best value, greatest selection of quality merchandise and highest standards of customer service. Wal-Mart focused on Global Positioning.
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Sams Club
Membership-only, cash-and-carry operations. Financial service credit card program (Discover Card) available at all clubs. Annual membership fee is $35; the Elite Membership is $100.
Elite membership has additional benefits like automotive service contracts, roadside assistance, home improvement, auto brokering and pharmacy discounts.

Bulk displays and name brand merchandise.


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Worldly Stores
Country Argentina Brazil Canada China Germany Korea Mexico Puerto Rico United Kingdom International Totals DISCOUNT STORES 0 0 213 0 0 0 472 9 248 942 SUPERCENT ERS 11 12 0 20 94 15 75 1 10 238 SAM'S CLUBS 0 8 0 4 0 0 50 9 0 71 NEIGHBORHOOD MARKETS 0 2 0 2 0 0 0 33 0 37

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Stores in US and World


U.S. Totals Grand Totals 1568 2510 1258 1496 525 596 49 86

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BCG

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External Factors

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Key External Factors


Opportunities
Agreement with Berkshire Hathaway, Inc. acquired McLane Company, Inc. Fortunes number one Most Admired Company and largest company in nation Worlds largest private satellite communication systems Ron Brown Corporate Leadership Award

Threats
Buy American policy Target A solution to the monopoly that Wal-Mart has created
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EFE
Key External Factors Weights 0.0 to 1.0 Opportunities Rating 1 to 4 Weighted Score

Agreement with Berkshire Hathaway, Inc. acquired McLane Company, Inc. Fortunes number one Most Admired Company and largest company in nation Worlds largest private satellite communication systems Ron Brown Corporate Leadership Award

0.1

0.3

0.14 0.16 0.11

4 4 3

0.56 0.64 0.33 0

Threats

Buy American policy Target


A solution to breaking the monopoly Wal-Mart has created

0.15 0.14 0.2

3 3 4

0.45 0.42 0.8

Totals

3.5

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Internal Factors

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Key Internal Factors


Strengths
Stores in all 50 states New concepts:
Hypermarkets, supermarkets

Wide variety of merchandise Nationally advertised merchandise Limited lines of merchandise made in USA Point-of-sale bar code scanning Great employee benefits No formal mission statement Management resisted putting women on board of directors Hiring illegal minorities to clean Growth for employees only in division

Weaknesses

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IFE
Key Internal Factors Weights 0.0 to 1.0 Internal Strengths Stores in all 50 states New Concepts - Hypermarkets, supermarkets Wide variety of merchandise Nationally advertised merchandise Point-of-sale bar code scanning Great Employee Benefits 0.09 0.1 0.1 0.08 0.13 0.09 4 3 3 3 4 3 0.36 0.3 0.3 0.24 0.52 0.27 0 Internal Weaknesses No formal mission statement Management resisted putting women on board of directors Hiring illegal minorities Growth for employees only in its division 0.1 0.13 0.08 0.1 3 3 2 3 0.3 0.39 0.16 0.3 0 Totals 1 3.14 Rating 1 to 4 Weighted Score

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SWOT
Increase the amount of hypermarkets, supermarkets in 50 states as well as connect to the private satellite systems(S2, SO) Create mission statements for all of the acquired companies and the different divisions of Wal-Mart (O1, W1)

Use the Most Admired Company award as leverage to advertise the wide variety of merchandise (S3, O2)

Use the Buy American policy to advertise nationally how American Wal-Mart is (S3, T1) Use point-of-sale bar code scanning as leverage over competitors like Target (S5, T2) Offer more merchandise that is not apart of the "Buy American" policy to attract more customers (S3, T1) Find a solution to the monopoly that has been created and come up with a new concept to beat the problem. (S2, T3)

Increase minority sales through buying minority products and selling them in discount stores (T1, W3)

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CPM
Wal-Mart Critical Success factors Weights 0.0 to 1.0 Market Share Inventory System Financial Position Product Quality Consumer Loyalty Sales Distribution Global Expansion Organization Structure Production Capacity Advertising Customer Service Price Competition Management Experience Totals 0.03 0.02 0.04 0.05 0.03 0.02 0.03 0.02 0.01 0.25 0.05 0.4 0.05 1 Ratin g 1 to 4 3 3 2 3 3 3 3 3 3 4 3 3 3 0.09 0.06 0.08 0.15 0.09 0.06 0.09 0.06 0.03 1 0.15 1.2 0.15 3.21 Weighted Score Ratin g 1 to 4 2 3 2 3 2 3 2 3 2 3 3 2 2 0.06 0.06 0.08 0.15 0.06 0.06 0.06 0.06 0.02 0.75 0.15 0.8 0.1 2.41 Target Weighted Score Ratin g 1 to 4 2 2 3 2 2 2 2 2 2 2 3 2 3 0.06 0.04 0.12 0.1 0.06 0.04 0.06 0.04 0.02 0.5 0.15 0.8 0.15 2.14 Kmart Weighted Score

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SPACE

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IE Matrix

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Grand Strategy Matrix

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Key Ratios
Last Trade: Trade Time: Change: Prev Close: Open: Bid: Ask: 1y Target Est: 45.54 4:00PM ET
5 D

Day's Range:
4 a y ' s R a n g e : 5 . 4 0 4 5 . 7 4

45.40 - 45.74 42.31 - 50.87 12,143,600 11,944,400 189.78B 16.98 2.68 0.67 (1.50%)

52wk Range:
4

0.28 (0.61%) 45.82 45.62 N/A N/A 56.47


V

Volume:
R a n g e : 5 0 . 8 7

2 w k

2 . 3 1

Avg Vol (3m):


1 o l u m e :

Market Cap:
1 v g V o l
( 3 m )

2 , 1 4 3 , 6 0 0

P/E (ttm):
: M 1

1 , 9 4 4 , 4 0 0

EPS (ttm):
C a p : 8 9 . 7 8 B P/

a r k e t

Div & Yield:


1 E
( t t m )

6 . 9 8

E 2. P S
( t t m )

6 8

Di

0. v & Y i e l d : ( 1 . 5 0 % ) 6 7

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Different Strategies
Add more hypermarkets and supermarkets to establish more growth Buy products from other countries to have more of a variety of merchandise and better quality merchandise for customers

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QSPM
Wal-Mart Key factors External Agreement with Berkshire Hathaway, Inc. acquired McLane's Company, Inc. 0.1 Fortune's number one Most Admired Company and largest company in nation 0.14 World largest private satellight communication systems Ron Brown Corporate Leadership Award 0.11 "Buy American" policy Target A solution to breaking the monopoly that Wal-Mart has created 0.2 total should be 1.0 Internal Stores in all 50 states New Concepts - hypermarkets and supermarkets Wide variety of merchandise Nationally advertised merchandise Point-of-sale bar code scanning Great Employee Benefits No formal mission statement Management resisted putting women on board of directors Hiring illegal minorities 0.09 0.1 0.1 0.08 0.13 0.09 0.1 0.13 0.08 1 1 to 4 4 3 3 3 4 3 3 3 2 0.36 0.3 0.3 0.24 0.52 0.27 0.3 0.39 0.16 1 to 4 4 4 4 4 4 3 3 3 2 0.36 0.4 0.4 0.32 0.52 0.27 0.3 0.39 0.16 1 to 4 4 3 3 3 3 2 3 3 2 0.36 0.3 0.3 0.24 0.39 0.18 0.3 0.39 0.16 4 0.8 N/A 0 N/A 0 0.15 0.14 3 3 4 0.33 0.45 0.56 3 3 4 0.33 0.45 0.56 2 4 3 0.22 0.6 0.42 0.16 4 4 0.56 0.64 4 3 0.56 0.48 3 3 0.42 0.48 3 0.3 2 0.2 2 0.2 Weight AS 1 to 4 TAS More hypermarkets/ supermark et AS 1 to 4 TAS Buy American AS 1 to 4 TAS

Growth for employees only in its division

0.1 total should be 1.0 1

0.3

0.3

0.3

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6.78

5.26

Decisions
We decided to add more hypermarkets based on the QSPM even though the numbers were close for both strategies

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EPS/EBIT Analysis
Amount needed = $1 Billion Stock Price = $45.54 EBIT Range = 435,950 - 635,950 Tax Rate = 26% Interest rate = 5% # Shares Outstanding = 4,453,000

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EPS/EBIT
In $Millions Common Stock Financing Debt Financing

High EBIT (12,719,000 in 2003) Interest 5% EBT Taxes 26% EAT 635,950 0 938,900 165,347 773,553

Low 435,950 0 638,900 113,347 525,553

High 635,950 31,798 604,153 165,347 438,806

Low 435,950 21,798 414,153 113,347 300,806

# Shares Outstanding EPS

4,453,000 5.68

4,453,000 5.64

13,964,000 3.65

13,964,000 3.65

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Implementation
Begin adding more hypermarkets to towns with populations large enough to support them. Increase the amount of hypermarkets by one in every state (50 stores) Increase revenue by Debt Financing per EPS/EBIT analysis

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Evaluation
Quarterly Reports Yearly Reports Store growth report Annual Sales report Key Ratios Stock prices in comparison to competitors

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In the News
In 2003 managed to get action lawsuit against Wal-Mart based on so few women being among its managers given that a majority of its workforce is female and also for equal pay. Ended up settling case because didnt want to lose a case for discrimination because would hurt WalMarts bottom line. But as the judge rightly ruled, companies that do business on as large a scale as WalMart have to be prepared to answer for their actions on an equally large scale. Case settled in June 2004 and began in September of 2003.

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In the News
In June 2005 Oklahoma grocer Super H filed lawsuit against Wal-Mart Stores for using a scanner to collect barcode data from the products on the Super Hs Shelves. Wal-Mart allegedly sent workers into Super H to check prices close to the time a Supercenter was opening in August. Super H wants the scanner back, not because of the price information but to make sure that there is not inventory and wholesale prices in the scanner. The real question in this case was not the price scanning but can the scanner capture other information from the scanning tag then just the price. The suit was dismissed per news reports.
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In the News
In April 2006 a suit was filed against a Wal-Mart in Maryland to ensure that larger employers pay up to a percentage toward health care for employees. ERISA is there to establish a uniform national framework for sponsoring, administering, protecting, and regulating employee benefit plans, including pension plans, and health and welfare plans. ERISA has a broad clause that pre-empts states and municipalities from enacting laws that relate to employee benefits plans. In this case it is not sure if the Maryland law or bills in other states violates the ERISA previsions. In February Wal-Mart announced plans to upgrade its health care benefits. This was decided in the middle of the uproar in this Maryland case. Here are a few cases about Wal-Mart. There were 52 pages of cases if you would like to see more go to Business & Company Resource Center, News/Magazines.

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In the News
Military Families Outreach Project Partnership with Sesame Workshop to support children of military families.

Children's Miracle Network Buy a balloon, save a child's life.


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Update!
International Division
2005 was a busy year for Wal-Mart International. In December alone, the company acquired 545 new stores and gained more than 50,000 new associates in Japan and South America, capping a year of robust growth.

Now have 13 divisions within the company


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References
http://www.walmart.com http://finance.yahoo.com Strategic Management Concepts and Cases http://galenet.galegroup.com.prxy6.ursus. maine.edu/servlet/BCRC?locID=maine_f ortkent Tony Gauvins presentation on Krogers http://www.target.com
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Questions?

Thank you for shopping at WAL-MART

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