wal-mart - a case study

8/7/2019 Wal-Mart - a case study

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WAL-MART - a case study

PRESENTED BY

AhmedAtif (2)

Barretto Nereus (6)

Iyer R.K (12)

Jadhav Vishal (13)

Kureshi Mushtaq (26)

SayyedAsif (54)


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Wal-Mart Profile

1st store opened in Rogers, ARKANSAS, 1962

10 years later Annual Sales topped 1 bn$

By Jan 2005, WORLDs Largest Retailer, 288bn$

sales Discount store businessmodel.

Wal-Mart Slogan-

"WAL-MART. ALWAYS LOW PRICE. ALWAYS.|

Wal-Mart Stores Mission Statement:

"WAL-MARTS MISSION IS TO HELP PEOPLE SAVEMONEY SO THEY CAN LIVE BETTER."

SWOTAnalysis


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Some stunning facts aboutWal-Mart

Information Technology employed to power logistics

and supply chain were on par with the systems used

at Pentagon.

Largest privately owned satellite communications

network in the U.S

Largest private sector employer in the world.


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Growing Competition(Intenational Markets)

Maintenance ofTechnologies(Logistics, Aircrafts, SatelliteTelecom)

Network Partnerships

Competitors Expansion Plans

Growing Competition(Intenational Markets)

Maintenance ofTechnologies(Logistics, Aircrafts, SatelliteTelecom)

Network Partnerships

Competitors Expansion Plans

Retail Store Market Share(8.9%)

Network Synchronizing aperGeographic Locations(International Markets)

VirtualAdministartion

Retail Store Market Share(8.9%)

Network Synchronizing aperGeographic Locations(International Markets)

VirtualAdministartion

Target Net income Lag( . / .8)

Shop lifting, Pilferage

Target Net income Lag( . / .8)

Shop lifting, Pilferage

Market Leader, Supermarket Division

Largest Private Sector Employer

Information Technology and SupplyChain & Logistical efficiency

Branded Products Low cost andEconomies of Scale forOperations

SamWalton and Financial muscle toenter new markets

Market Leader, Supermarket Division

Largest Private Sector Employer

Information Technology and SupplyChain & Logistical efficiency

Branded Products Low cost andEconomies of Scale forOperations

SamWalton and Financial muscle toenter new markets

Strength Weakness

ThreatsOpportunities


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PESTLEAnalysis

Political : Entry into new markets restricted by

FDI norms.

Economical : Macro Economic fears Social : Bad press received sinceWalMart

blamed for cutting out small retailers

Technological : Hig

hinvest

ment in tec

hnology

Environmental :

Legal : FDI norms and foreign laws


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Problem Identification Sustenance of

being th

e Market Leader Find new avenues of growth


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Trouble Shooting


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Strategic Model Best Efficient Operations

(Time Constrained)

Supply Chain & Logistics Efficiency, Real-time Replenishment Strategy,Cross-docking and Distribution efficiency.

HR Strategy- Frugality (Wal-Mart Culture), Profit Sharing, E-sops, Result-

orientedAppraisal Strategy.

Marketing Strategy Everyday Low price

Information Strategy State of art technology acquisition and Deployment

extended to suppliers

Procurement Strategy Not Over-Dependent (not >4 % ) total Sales from

single supplier, N/w development, Economies of Scale.

Custom

er Satisfaction Strategy 10 Foot attitude.


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Data & Supporting ClaimsCOMPETITIVE FINANCIAL DATA ON SELECTED COMPANIES

Five YearAverage: 1999-2004

Wal-Mart Home Depot Kroger Costco Target

Return on Equity (%) 21.1 19.7 20.1 13.4 17.3

Sales Growth (%) 11.6 13.7 4.5 11.9 6.8

Operating Income Growth (%) 11.1 15.9 -13.8 10 13.3

2004 Data

Sales ($Bn) 288.2 73.1 56.4 48.1 46.8

As % of Sales:

COG

S 76.3 66.6 74.7 87.5 68.7Gross Margin 22.7 33.4 25.3 12.5 31.3

Selling &Administration 17.8 22.6 20 9.6 20.9

Operating Income 5.9 10.8 1.5 2.9 7.7

Net Income 3.6 6.8 -0.2 1.8 6.8

Inventory T.O 7.5 4.8 9.8 11.3 5.9

Return On Equity (%) 23.2 22.1 -2.5 12.8 15.6


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0 5 10 15 20 25

Wal-Mart

Home Depot

Kroger

Costco

Target

Return on Equity (%)


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-10

0

10

20

30

40

50

60

70

80

0


Chart Title

COGS

Gross Margin

Selling & Administration

Operating Income

Net Income


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0

2

4

6

8

10

12


Inventory T.O

Inventory T.O


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Interpretation &Analysis

Enjoys comfortable position in current

scenario in US retail market

Em

ploys ah

uge network of people andInformations systems for proper functioning.


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Conclusion

Needs to find different avenues for sustaining

mission of low price.

Com

petitionm

ay em

ploy strategies used byWalmart

Need to expand in new markets.


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Recommendation

Focus on associates.

Employ the use of local retailers so as to help

build its im

age. Heavy reliance on information technology can

lead to system breakdowns if proper actions

mitigating risks are not undertaken.

Move from LOW PRICE strategy to GREAT

QUALITYATTHE BEST PRICES.

wal-mart - a case study

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