This document discusses value chain analysis and provides examples of industry and company value chains. It analyzes Walmart's value chain by breaking down its key value-creating activities and the associated costs as percentages of sales. These activities include inbound logistics, operations, marketing, shrinkage, salaries/wages, and cost of goods sold, with the latter accounting for around 74% of sales on average. The document aims to help understand how deconstructing a company's value chain can create competitive advantage.

1. Value Chain Analysis: Learning objectives Mapping Industry value chains Calculating the economics of value chains Understanding the difference between Industry value chain and a company's value chain Understanding a company's value creating activities De-constructing value chain to create competitive advantage

2. Discount Industry Value Chain Natalie-Rosanna Rebot

3. Economics of Industry Value Chain

4. Discount Industry Value Chain Visualized:

5. Traditional Manufacture -> Wholesaler -> Retailer -> Customer Wal-Mart Manufacturer ->Wal-Mart -> Customer Sandro Olivieri

6. Walmart Value Chain Natalie-Rosanna Rebot

7. Walmart Value Chain The World of Walmart Map Growth of Walmart

8. Economics of Walmart Value Chain

9. Walmart Value Chain

10. Presented by: Benjamin Fieman MBAM 619 Strategy Management Professor Sunil Mehrotra WAL * MART Value Chain

11. Value Creating Activities Inbound Logistics (3.4%*)‏ Operations (Building Rentals) (1.9%**)‏ Licensing (0.2%)‏ Marketing (1.1%)‏ Shrinkage (1.3%)‏ Salary/Wages (10.8%***)‏ Cost of Goods Sold (~74%****)‏ *= Averaging 1984 and 1985 logistics numbers ** = Adding 0.1% to the late 1970’s number *** = Averaging the salary figures given **** = Averaging COGS/Sales for 5 years Natalie-Rosanna Rebot

12. WAL * MART’s Value Creating Activities % Sales COGS Operating Profit 75.3% 24.7% Oper. Activities 17.6% Oper. Income 7.2% Ben Fieman

14. Walmart optimized its Value creating processes!!

15. Walmart's Business logic Everyday low prices More customers More goods sold Lower prices from suppliers Lower operating Costs