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The Wal Mart Story


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this presentation is about the impact and repurcussions of wal -mart entry in India .

Published in: Business
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The Wal Mart Story

  1. 1. The WAL- MART story
  2. 2. By : Mahavir Jain M.B.A (MKTG.)2005-2007 Faculty of Management Studies Udaipur (Rajasthan )
  3. 3. Structure of the presentation <ul><li>WAL- MART – some facts </li></ul><ul><li>Accolades and recognition </li></ul><ul><li>How they did it </li></ul><ul><li>WAL-MART in India –the Bharti Wal-Mart deal </li></ul><ul><li>The Competition </li></ul><ul><li>Do we have to fear WAL-MART. </li></ul><ul><li>The future of mom and pop stores </li></ul><ul><li>Will WAL-MART be a success. </li></ul>
  4. 4. FACTS <ul><li>Founded in 1962 by Mr.Sam Walton </li></ul><ul><li>First store opened in Bentonville,Arkansas </li></ul><ul><li>Today 6600 stores worldwide in countries like - </li></ul><ul><li>Honduras,Japan,Mexico,Nicaragua,Puertorico,Argentina,Brazil, </li></ul><ul><li>Canada,China,Costa-rica,El-salvadore,Guatemala and the U.K. </li></ul><ul><li>1.3 million people working </li></ul><ul><li>Sales for 2006 estimated to be $ 1billion per day. </li></ul>
  5. 5. REWARDS AND RECOGNITION YEAR - 2001 Fortune co.named Wal-Mart as the 3 rd most admired company of America. The Financial Times and Pricewater house coopers ranked it as the 8 th most admired company in the world. YEAR - 2002 Rated as the no.1 company on the fortune 500 list. Presented with the Ron brown award for corparate leadership.
  6. 6. What it takes to be a “WAL-MART ” <ul><li>The Winning strategy- selling branded </li></ul><ul><li>products at low cost. </li></ul><ul><li>Non dependence on any single vendor. </li></ul><ul><li>Reliablity on its own distribution system. </li></ul>
  7. 7. Intensive People focus <ul><li>“ Associates” and NOT employees. </li></ul><ul><li>Various schemes and programmes for associates : </li></ul><ul><li>Incentive bonuses </li></ul><ul><li>A discount stock purchase plan </li></ul><ul><li>Promotion from within </li></ul><ul><li>Pay raise based on performance and not seniority. </li></ul><ul><li>An open door policy </li></ul><ul><li>Introduced profit sharing in 1971. </li></ul>
  8. 8. MARGIN
  9. 9. ROLE OF TECHNOLOGY <ul><li>Implemented a satellite net work system. </li></ul><ul><li>Process like ordering ,shipping ,communications and logistics were automated. </li></ul><ul><li>Store level data sales were collected ,analyzed and transmitted electronically on a real time basis. </li></ul>
  10. 10. MARGIN The bharti Wal-Mart deal On November.27 2006,bharti enterprises and WAL-MART entered into joint venture of equal partnership to function in the ‘ cash and carry ’ format. By Aug.2007 - first store in India. Present status : Recruitment Negotiations with potential customers Market surveys are on.
  11. 11. MARGIN Bharti In the market with old players like Pantaloons,Rahejas and RPG and new players like Reliance ,Aditya Birla group. Partnering with Wal-Mart will give other players a run for their money. WAL-MART Partnering with bharti will give Wal Mart access to the 8 th largest retail market in the world valued at $320 billion. The Significance
  12. 12. MARGIN <ul><li>Advantage bharti </li></ul><ul><li>Huge ground network in the country already through its telecom business </li></ul><ul><li>Knows the Indian landscape and understands the demographics in this country. </li></ul><ul><li>Knowledge of where to get the real estate for the business. </li></ul>
  13. 13. MARGIN <ul><li>Advantage Wal-Mart </li></ul><ul><li>Companies innovative information technology . </li></ul><ul><li>Highly efficient service channel management which makes it possible to buy directly from the producers. </li></ul><ul><li>Company has tremendous sourcing efficiencies which will bring economies of scale from day one. </li></ul>
  14. 14. M A R K E T P L A Y E R S The competition
  15. 15. MARGIN RELIANCE It will operate hypermarkets,convenience and speciality stores as well as business to business operations ,sell food ,clothing ,electronic consumer durables,luxury goods and financial and travel services . INFINITY RETAIL The Tata group has partnered with Wool Worths ,for servicing and technical support .It opened the first store in Mumbai in Oct.2006 . PANTALOONS BIG BAZAAR are rapidly expanding and are planning to open 100 stores by dec.07
  16. 16. DON’T FEAR INDIA !
  17. 17. MARGIN Fear of Wal-Mart NO,NO WAL –Mart is not invincible Last year it has to fled from Germany and South Korea In Germany it lost $863 million (rs.4056 cr.)and sold all its 85 stores to Metro. In South korea – Had to sell all 16 stores.
  18. 18. MARGIN Reasons Local German stores Aldi and Lidl –able to deliver good quality grocery at affordable prices. Opened all stores in suburbs –customers were very reluctant to drive that far. Unable to understand the customer insights well
  19. 19. MARGIN India is not America…. India is one country, but a hundred different markets . 28 States, 7 Union Territories, 14 different official languages, hundreds of dialects, multiple ethnicities, cultures and habits…. Geographical challenges : India has 3 times more people then America Population density 11 times that of America.
  20. 20. MARGIN Look at China … The country has nearly 200 stores owned by Wal Mart ,Tesco and Carrefour yet domestic retailers are strong. The big Indian plans… Reliance intends opening more stores (around 6,000) In 5 years than Wal –Mart has opened in 44 years .
  21. 21. MARGIN Advantage retail BOOST EMPLOYMENT America has more Wal –Mart employees then high school teachers. In China – employing 150,000 people in next 5 Years. CREATION OF WEALTH They pay producers more and charge consumers less. Resulting savings generate employment when they are spent on other goods and services.
  22. 22. MARGIN Future of mom and pop stores <ul><li>Kirana stores offers services that are unmatched by organized retailers. </li></ul><ul><li>Credit </li></ul><ul><li>Personal suggestions </li></ul><ul><li>Good relationships. </li></ul><ul><li>Home delivery </li></ul><ul><li>The U.S.P </li></ul><ul><li>Their instant response to changing consumer needs. </li></ul>
  23. 23. MARGIN WILL WAL-MART SUCCEED IN INDIA ??? <ul><li>IT WILL SUCCEED BECAUSE : </li></ul><ul><li>It has the best know how to provide the right set </li></ul><ul><li>products to the right set of customers. </li></ul><ul><li>Customers are also hungry for new ways of </li></ul><ul><li>shopping. </li></ul>