Walmart uses Porter's value chain analysis to examine its internal business activities. It focuses on logistics and using technology to track inventory and share data with suppliers. This allows Walmart to offer low prices through efficient procurement, distribution, and sales. It aims to replace inventory with information to better meet customer demand.

1. VALUE CHAIN ANALYSIS
VALUE CHAIN ANALYSIS
OF
OF
PRESENTED
PRESENTED
BY:
BY:
ARPAN,
ARPAN,
BISHNU
BISHNU
MONICA
MONICA
SUBHASHRE
SUBHASHRE
KALYAN
KALYAN

2. • "People think we got big by putting big
stores in small towns. Really, we got big by
replacing inventory with information."
Sam Walton, Founder of Wal-Mart

3. PORTER’S VALUE CHAIN
PORTER’S VALUE CHAIN
ANALYSIS
ANALYSIS
The value chain as the internal processes or
activities a company performs “to design,
produce, market, deliver and support its
product.”
PRIMARY ACTIVITIES
• Inbound logistics
• Operations
• Outbound logistics
• Marketing and sales

4. SUPPORT ACTIVITIES:-
• Procurement
• Technology development
• Human resource management
• Firm infrastructure

5. VALUE CHAIN ANALYSIS OF
VALUE CHAIN ANALYSIS OF
WAL-MART
WAL-MART

6. FIRM INFRASTRUCTURE
FIRM INFRASTRUCTURE
• 2485 Wal-Mart stores
• 682 Supercentres, 457 Sam’s Clubs, 5 Wal-
Mart Neighbourhood Markets and 1007 units
of Wal-Mart International.
• It serves over 100 million customers weekly
worldwide.
• There are 1035000 associates, and the company
is America’s largest private employer.

7. HUMAN RESOURCES
HUMAN RESOURCES
MANAGEMENT
MANAGEMENT
• Almost 60% of all managers in Wal-Mart stores
started as hourly associates.
• The employees are encouraged to communicate
openly, offer new ideas, take risks, strive for
excellence and have fun. Employees are getting
competitive wages and comprehensive benefits.
• In recruiting new associates the company begins
a comprehensive recruitment program in the
community where the store is to identify
candidates.

8. • Recruitment programs are well publicised
and convenient, providing an opportunity
for job applicants and the company to
start getting acquainted
• When new employees start at Wal-Mart
they are presented to the two basic rules
of Wal-Mart. These are:
• Rule 1: The customer is always right
• Rule 2: If the customer happens to be
wrong, refer rule 1.

9. TECHNOLOGY DEVELOPMENT
TECHNOLOGY DEVELOPMENT
• Wal-Mart set up its own satellite communication
system in 1983
• Wal-mart uses Bar-coding & RFID technologies,
different processes like efficient picking,
receiving & proper inventory control of the
products along with easy packing and counting
of the inventories was ensured.
• Electronic data interchange (EDI)
– a computer-to-computer exchange of business
documents

10. PROCUREMENT
PROCUREMENT
Wal-Mart’s process of procurement
involves
reducing its purchasing costs as far as
possible so that it can offer best price to
its customers. The company procures
goods directly from the manufacturers,
bypassing all intermediaries.

11. FLOW-TIME ANALYSIS
Point-of-sale Data is Orders are Merchandise is
Customer Merchandise The store will re-
system transmitted to generated from loaded onto
made a is delivered to stock the shelves
captures data warehouses previous-day trucks using
purchase the store with merchandise
in real-time for Inv. Mgmt. sales cross-docking
Retail Link Merchandise is
Merchandise
transmits manufactured
is shipped to
data to based on historical
warehouses
supplier and real-time data

12. LOGISTICS
LOGISTICS
• The drivers are tracked regularly through “Private
Fleet Driver handbook” Mart uses a logistics
technique called “Cross Docking”
• Wal-Mart today about 60% inbound freight
(closer to -80% for their grocery segment) is
managed by suppliers.
• The important of Wal-Mart's logistics
infrastructure was its fast and responsive
transportation system.
• The distribution centres were serviced by more
than 3,500 company owned trucks.

13. WAL*MART'S BUSINESS LOGIC
WAL*MART'S BUSINESS LOGIC
Everyday low prices
ower prices More customers
om suppliers
More goods sold
Lower operating
Costs

14. OPERATIONS
OPERATIONS
:Wal-Mart operations are comprised of three
business segments
•WAL-MART STORES
Super- centres
Discount Stores
Neighbourhood Markets
•SAM’S CLUB-SAM’S CLUB
•WAL-MART INTERNATIONAL

15. MARKETING AND SALES
MARKETING AND SALES
•Employees wore blue vests to identify themselves
•Aisles were wide
•Apparel departments were carpeted in warm
colours
• A store employee followed customers to their cars
to pick up their shopping carts
•Customer was welcomed at the door by a “people
greeter,” who gave directions and struck up
conversations

16. SERVICE
SERVICE
• Opening hours at Wal-Mart generally range from 7.00
a.m. to 11.00 p.m. six days a week, and from 10.00 a.m.
to 8.00 p.m. on Sunday.
• All Wal-Mart stores maintain uniform prices, except
where lower prices are necessary to meet local
competition. Sales are primarily on a self-service, cash-
and-carry basis with the objective of maximizing sales
volume and inventory turnover while minimizing
expenses.

17. • Bank credit card programs, operates without
recourse to the Company, is available in all
stores.
• The replenishment system also helps the store
adjust to customers demands. The stores are
organised the same way all over the world, so the
customers will recognise the stores wherever they
go.

18. WAL**MART’S VALUE CHAIN
Wal-Mart Wal-Mart Wal-Mart
Suppliers
Suppliers
Distribution
Store Shopper
Center
Vendors are Wal-
Mart's suppliers. Once the products After products are Customers can
They deliver are delivered to the delivered to the purchase products
products to Wal- distribution center, stores, they are at very low prices
Mart's distribution they are sorted and placed on the and have the ability
center or directly to placed on trucks to appropriate shelf to return any item.
one of the stores. be delivered to location for
Wal-Mart is able to stores. This allows customers to view.
bargain for the for less than 48 Store locations are
lowest possible hour deliveries to located throughout
price because of stores and the U.S. in rural and
the high volume of increased efficiency urban towns.
sales. Therefore, on trucks with
Wal-Mart passes backhauls.
this savings to its
customers.

19. Wal-Mart Supply Chain
Source: Adapted from Garrison Wieland for “Wal-Mart’s Supply Chain,”
Harvard Business Review 70(2; March–April 1992), pp. 60–71.

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