Company Profile Its the worlds biggest retailer and also the biggest employer with over 2.1 million full- and part-time workers worldwide Known for its low pricing and wide selection of goods, Wal-Mart has become the undisputed king of retailing The company has 10,130 stores worldwide Wal-Mart Supercenters include supermarkets and average 185,000 square feet
History The first Wal-Mart store opened in 1962 by brothers Sam and Bud Walton. By 1964, Wal-Mart had 24 stores with $12 million in sales The company was guided by founder Sam Waltons passion for customer satisfaction and "Every Day Low Prices." In 1970, the company opened its first distribution center and corporate headquarters in Bentonville, AR, where it is located today. Wal-Mart also went public the same year. In 1983, the first Sams Club warehouse store opened.
Mission Statement andPurpose"We save people money so they can livebetter."In addition to this mission statement, thecompany looks to its founder, Sam Walton for acompany "purpose":“If we work together, we’ll lower the cost ofliving for everyone…we’ll give the world anopportunity to see what it’s like to save andhave a better life.”
Others @ the Office Best OccasionsProducts Additional Brands Clear American Color Place Apparel Major Brands Baby George Douglas Sams Choice EverStart Faded Glory Fire Side Gourmet Great Value No Equate Boundaries Golds Gym Mainstays Simply Basic Holiday Time Ol Roy Kid Connection Marketside Dr Thunder Homliness Oak Leaf Special Kitty Better Homes and Gardens ONN Parents Ozark Trail Choice Canopy Hometrends Protege White Stag your zone4 ReliOn George SuperTechWalmart Family Mobile World Table
5 force model Threat of new competition Threat of substitute products or services Bargaining power of customers Bargaining power of suppliers Intensity of competitive rivalry
Threat of new entrants France is a big market experiencing significant growth in retail industry in recent years. Strong economy, stable government, favorable government policies for foreign investment and well-developed infrastructure and with introduction of EURO as common currency and same international laws, makes France a very attractive place to be in. But at the same time the entry and exit levels are high and it is getting mature quickly and have low profit margins.
Substitute products Asthe retail industry sells products of daily common use, there are no direct substitutes; the only substitute products that can be threat are the products from gray market, which can harm the sales of branded products. Department and discount stores also faces stiff competition from specialized retail shops such as garments, electronics etc.
Suppliers Because of the diverse product range that is distributed by retailers there are many different suppliers. Suppliers include both domestic and international manufacturers and as the products are more or less standardized in nature, retailers and wholesalers have low switching costs, the powers of supplier are moderate to low.
Buyers The consumers are now more sophisticated and mature. As said by Carrefour, “they want it now and they want it with the best service and the best quality”. Consumers enjoy increasing choice of products and increased price competition, and they demand better and wider choices. They also exert pressure on manufacturers and retailers to give more relevant product information.
Competitorso Kmarto Targeto ShopKoo Meijero Zellerso Harto Real Canadian Superstoreo Giant Tigero Comercial Mexicanao Sorianao Costco
SWOT analysis StrengthsFinancial Strength:Wal-Mart is the worlds largest retailer with a turnover of more than$137billion. CEO of Carrefour, Mr. Bernard said that, "but now, to be globalyou need money. Not only to invest in new markets, but to keep up with thecompetition at home.Computer System:Wal-Mart has one of Worlds best Retail Link computer systems to keep incheck inventories that have provided it a definite edge over its competitorsover the years.Culture:Strong work ethics and commitment towards consumers made everyemployee an asset for the company.Buying power:Wal-Mart enjoys huge economy of scale as it has tremendous buying power,most of its suppliers are working on international scenario like P&G, therefore,
SWOT analysis WeaknessLiquidity Ratio and Financial Stability RatioDue to recent acquisitions in Germany, South Korea, Canada,expansion of operations in USA and other countries and $ 2 billionshare buyback have resulted in very low quick ratio, also Debt EquityRatio is well above the critical level of 1 and is still going up
SWOT analysis ThreatsHidden Legal Barriers:As the France government have imposed significant legal barriers tocontrol the growth of department stores and hypermarkets to savetraditional small shops and for saving beauty of the environmentcaused by sign boards (what are they called).These Trade barrierposes significant treat for Wal-Mart to grow in FranceEconomic and Political Turbulence in Europe• The ongoing economic war between European Union and USA• War in Kosovo• Political Turbulence in Germany• Change in Currency Exchange Rates
SWOT analysis Strengths• Powerful Retail brand, Large scale of operations worldwide• One Stop Retail destination• Strategic business programs• Efficient working capital management Weakness• Self Cannibalization• Involvement in numerous legal issues• Continuous Product Recall• Community Relations Problem Opportunity• Global Food Safety Initiative Standard• Increasing demand of Online sales• Increasing opportunity in Growing economy Threats• Intense competition• Price matching program by Target• Foreign currency fluctuation
Corporate Strategies Dominance in Retail Market Expansion in US and International market Creation of Positive Brand and Company Recognition Branching into new sectors of retail
Key Success Factors Acquisition of McLane Company in year 1990 Diversification in Food and Grocery retailing Razor thin margin – provides Great Value to customer Acquire of PACE club Kmart
Conclusion Wal-Mart must adopt a friendlier corporate attitude It needs to relax anti-unionization policy Improve public perception that Wal-Mart can destroy communities International expansion should be done with the help of Local retailers