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Wal mart stors' discount operations
- 1. Walmart Stores’ Discount Operations Strategic Management -GROUP 2 Aditi Mittal 20DM275 Ashmita 20DM269 Avnish Bhutani 20DM289 Arnav Mahajan 20DM288 Abhishek Patil 20DM271 Sabhya Bajaj 20DM262
- 2. INTRODUCTION • Sam Waltonthe richest person in the United States. With his four children, he owned stock worth $2.8 billion. That put him $1 billion ahead of the next person on the list, H. Ross Perot. By the end of April 1986, Walton's net worth had swelled by another $1.6 billion. • Walmart Inc. is a multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores from the United States, headquartered in Bentonville, Arkansas. • Our case focuses on discount stores and wholesale clubs. • Major competitors : K-mart, Target, Venture, Caldor
- 3. FRAMING Key Questions Q1. What,historically, has been Wal- Mart’s key sources of Competitive advantage in discount retailing? Q2. How sustainable is Wal-Mart’s Competitive Advantage in discount retailing in 1986? Q3. Will Sam’s Wholesale Clubs prove as big a success for Wal-Mart as its discount stores? 01 Beginning of the case Background of Wal-Mart Discount Stores 03 End of the Case Wal-Mart's future prospects. Success of Sam's warehouse club 04 Flipping & Skimming 12 page case with 7 exhibits. Organization of the case- Introduction to discount retailing In-depth analysis of business functions of Wal-Mart Competitor analysis Different business prospects. 02
- 4. LABELLING www.free-powerpoint-templates-design.com 03 • Price drivenindustry • Inventory management Industry 04 Weakness 05 • UPC Coded • Supply chain management • HR management policies Strengths 02 Extensive competition in different geogr aphies, price points and business models . Competition 01 • The customer became aware and price sensitive • Technological advancements through central co mputerised system and satellite network, UPC sc anning General Environment •Diversification •Low price •Variety •Promotion •Pilferage and shoplifting •Self Cannibalism
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- 6. PORTER'S 5 FORCES Competition: Thecompetition was HIGH as there were several players in the same segment. Supplier's Bargaining Power: LOW No vendor accounted for a hefty share in the company's purchasing. Substitutes: MODERATE level of substitutes that majorly constituted of different retail setups. Customers Bargaining Power: LOW because lowest market prices of Wal-Mart Barriers to entry: HIGH Capital intensive and to survive in this industry a company needs to be operationally excellent.
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- 8. QUESTION 1 What, historically,has been Wal-Mart’s key sources of Competitive advantage in discount retailing? Question 1. Strategically expansive locations. 2. Technologically ahead of the curve. 3. Well managed supply chain. Advertising. 4. Bulk newspaper ads and Spot TV. 5. Regular meetings. Answer Supply chain management, ROI, Explanation
- 9. QUESTION 2 How sustainableis Wal-Mart’s Competitive Advantage in discount retailing in 1986? Question Yes it is sustainable Answer EPS growth, Sales growth and return on equity Explanation
- 10. QUESTION 3 Will Sam’sWholesale Clubs prove as big a success for Wal- Mart as its discount stores? Question Yes it will be success Answer Less price then other stores, Sales expected to increase $20 billion by 1990's, low cost due to leasing of warehouse about $4 million, Broder national then any competitors, projected location expand to 100, revenue to $6.5 billion, pretax income to $260 million Explanation
- 13. • Wal-Mart should expandto densely populated states, e.g. New York, Washington etc. RECOMMENDATION •Total no. Of discount stores were only 18% •The map suggested the fact that their presence was limited to central America and expansion towards the east and the west coast could prove to be an important location to expand KEY SUPPORTING FACTORS •Political Environment •Competitive threat •No prior experience in densely populated market. •Capital intensive RISK •Surveys to acquire customer tastes and preferences •Increasing distribution centres. •Implementing UPC syst ems in the existing as well as the newly expanded stores. •Training systems. IMPLEMENTATION CONCLUDING
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