Wal mart


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Wal mart

  1. 1. WAL•MART Brief History
  2. 2. Wal-mart was found in 1962, and expand to 25 store in 1967. 66 Stores in 1970. 3800 stores in 2005 “save people money, so they can live better” “Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community.” - Sam Walton
  3. 3. • environment violations, • child labor law violation, • and having a poor working conditions for the workers. Lawsuit problem and Complains
  4. 4. • Wal-Mart store – Walmart.com – Supercenters format (142,000), Discount stores format and Neighborhood Format (29000 products) • Sam’s Club • Wal-Mart international Segmentation
  5. 5. • Sam’s son succeed him. • International growth increases by 33.6%, and domestic by 11%. • geographically, according to ACNielsen, Wal- Mart is the dominant store in the south, and in midsize and small town market • Wal-Mart is accounted for 20 percents of dry grocery, 29 non-food grocery, 30 health and beauty aid, and 45 general merchandise. Sales, Growth, and Expansion
  6. 6. • Potential competitor – New retailer. – barrier to entry as cost leader and also good distribution system where it can get its merchandise at a very cheap cost. • Rivalry among firms – Amazon on internet based purchase. – faced strong core competitor which are Sears, Target, Kmart and Costco. Walmart: Porter’s Five Forces
  7. 7. • Bargaining power from consumers – Minimal • Bargaining power from suppliers – Wal-Mart itself that has power over its suppliers – Faced some bargaining power from bigger firm, eg. Coca-cola • Substitute product – hard find any place that sell any merchandise Wal- Mart has one sale cheaper than Wal-Mart – Wal-Mart’s E-commerce offer consumer an even better bargain to its product due to its reduce cost, given that it would have to find a place to sell that product, having sold it on line.
  8. 8. • This section will focus on 2 major competitors • Currently, Wal-Mart stock prices is at around $71.36 which is a major improvement • CostCo which sometimes are condisered the ‘anti Wal-Mart.’ • Target which is perceived as Wal-Mart for Competitive Analysts
  9. 9. CostCo. S TRENGTHS • 598 warehouses and growing • Consistent same store sales • 3rd place as the biggest retailer in U.S. • Recent record breaking opening days sales internationally (Korea, Japan) • Only slightly overvalued by about 10% • Strong free cash flow (FCF) generation • High Revenue Growth • Outperform SAMCLUB (warehouse business) • Competitive price which can compete with Wal- Mart • Loyal customer due to high renewal rate • Limited products, cheap prices
  10. 10. Year FCF 2011 $1.91 billion 2010 $1.73 billion 2009 $0.84 billion W EAKNESSES • Competition in price lowers margins (but can be offset by revenue from membership) • Lower selection of goods • No-frills policy • Low quality controls CostCo.
  11. 11. Target S TRENGTHS • Popularity is more appealing as it is viewed as the upper market • High quality control • Well-designed products, respectable brands • Attractive stores design
  12. 12. W EAKNESSES • Not globally competitive • Low prices, but not as low as Wal-Mart or CostCo • Employees are at entry- level or at the part-time level, this causes high turnover rate Target
  14. 14. SWOT ANALYSIS S TRENGTHS W EAKNESSES O PPORTUNITIES T HREATS • Great Pricing and Variety of Product • Customer loyalty • Good locations • Span of Control • Supplier Problem • Unreliable Inventory • More Part time employee • Not focused in specific section • International Expansion • Home Delivery • Local communication perception • Green world support • Competitor like Target and CostCo • Employee Unions Negative Interna factors Externa factors Positive
  15. 15. • Online Store cannot compete with other company – Lose to most online store; Amazon gain $3 billion and JCpenney gain $324 million while Sam’s club only gain $135 million – However, today, it comes to stay in the third place under Amazon (AMZN). Best Buy (BBY) Problem
  16. 16. • Employees-Employer relationship problem – Full of part time employees • Not provide meal and rest break Problem
  17. 17. • Banning of expansion by government in some places – These wages and heath case problems lead to protest of Wal-Mart employee – Ingle wood, California, Cedar Mill, Oregon, and Vancouver, Canada Problem
  18. 18. • Lack of community, customers relationship – Because Wal-Mart relationship with employee getting worse, cause their employee to treat customer badly. • Many customer disappoint and think Wal-Mart just want their money Problem
  19. 19. • Cannot compete with competitors in middle to higher income segments – These customer really care about brand reputation – They also want low price flexibility Problem
  20. 20. • These problem lead to – Decrease in Company image – Sales growth is not as high as competitors – Low turnover rate due to the large quantities of orders Problem
  21. 21. • Create new brand under supervision of Wal- Mart • improve customer relationship • Hire more full-time workers • Increase expansion internationally • Improve CSR, such as creating projects for community Suggest Solution
  22. 22. • improvement on the training programs • corporate social responsibility • Advantages and Disadvantages Our Proposal Plan