WALMART

Walmart
Founded in 1962 by Sam Walton Largest Global Corporation by Revenues Largest Market Share of total Global Retail One of the top 5 largest Public Corporation

according to Forbes
Operates in 16 Countries Globally

WalMart Corporate Values

Constant Improvement Customer Focus Speed Execution Community Involvement

Marketing Strategies

Sector Strategy: Diversification

Diversified into Wal-Mart
Tire & Lube Express, Wal-Mart Optical, WalMart Pharmacy, Wal-Mart Vacations, WalMart's Used Fixture Auctions Wal-Mart Stores, WalMart.com Sams Club 16 international locations

1. Non-food

2. Discount format 3. E-commerce 4. Wholesale 5. Expansion abroad

Penetration Strategy
Advertising Expenditure : 1.5% Of Sales Revenue Only

- By Word-of-mouth, In-store Promos

Brick & Click Retailing Model Competitive Strategy:

- Pre-emptive Expansion - Local Retailing Monopoly

Global Buying For Relentless Pressure On Prices
Logistic Efficiency: Speed To Market

Potential Development Strategy

Enhancing Product Range: Full-line Departmental Store
Differentiation: Price-based - Best Quality at the Charged

Price
Merchandising: Max. In-store Merchandise Display Market-broadening: Store-type Adaptations To Local

Culture
Self-branding: Brand-name Is Extended To Popular Items Ancillary Business: Utility Payment Services

Marketing Mix

Product
Food

Stationery Automative

Furnishings

Home

WALMART

Sporting goods

Household chemicals & consumables Health & beauty aids

Paint & hardware

Marketing Mix
Price:
Always low prices-Always

- Between 2008-2009:

- 2.2% below Kmart - 3.7% below Target

Marketing Mix
Place:
Small towns Rural areas

- pattern of expansion:

-Reach every nook and corner

Marketing Mix
Promotion:
Everyday-low-prices
- Few Promotion:

- advertising expense: 1.5% of sales (while 2.1% for direct competitors)

Porters Generic Strategy

Low Cost Industry-wide Differentiation Differentiation

Cost Leadership

Single segment

Focus

Factors Influencing Competitive Advantage

Target the dense areas Metropolitan Areas Target But capture the rural market too Strong Purchasing & Distribution Warehouses - Need to go public Time and Factory Cost Reduce

Key Source of WalMarts Competitive Advantages

Successful Vendor Relationship Efficient Communication Network

LOW PRICE

Value Employees Most Customer-Oriented

Operation Management

Efficient

Walmarts Control Systems

Investment Centers Policy to reduce cost of Shoplifting and

Pilferage
The Sundown Rule The Ten Foot Rule Sam Waltons Pricing Philosophy

Walmarts Control Systems

Pushed the Retail Industry to adopt a Universal

Bar Code System

First major Retailer to demand Manufacturers to

use RFID
No dependence on a single Supplier Saturation Strategy for Store Expansion Implemented the Satellite network System

Operations Strategies

Cross-docking

Cross-docking eliminates the storage and order picking functions

Wal-Marts Procurement
Emphasized on reduction of purchasing costs
Directly procured from manufacturers, by

passing all intermediaries

Inventory Management
Heavy investment in IT and

communication systems to effectively track sales

Employees at the stores had hand-held

computer
Each store allowed to manage their own

stocks

RFID Technology
(Radio Frequency Identification)
Wal-Mart planned to replace bar-code

technology with RFID technology for reduction of SCM cost & increase efficiency
In 2003, Wal-Mart asked its top 100 suppliers

to be RFID compliant by January, 2005

Wal-Mart experienced a 16 percent drop in

out-of-stock merchandise at its RFIDequipped stores.

Financial Analysis

Five Year Average: 1999 2004

25 20 15 10 5 0 -5

Sales Growth (%) Operating Income (%) ROE (%)

-10 -15
-20

Standalone (2004)
25
20 15

10
5 0 Wal-Mart Home Depot -5 Kroger Costco Target

Inventory Turnover ROE (%)

FY 2011
25.00%
20.00% 15.00% 10.00% 5.00% 0.00% Sales Op. Inc. ROI

Conclusion
Sam Walton believed in being frugal Flew economy class and drove an old beat-up

truck
Instilled frugality as part of Wal-Marts DNA

which made it one of the successful companies by being cost efficient

Thank You
Presented By:

Swapnil Satwaji - 132 Ayush Varshney - 178 Sahil Mulaokar - 179 Aashish Agarwal - 180