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Wal Mart


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Wal Mart

  1. 1. Walmart Always Low Prices …. Always<br />Group-D<br />
  2. 2. Walmart –Goals and Challenges<br />Goals <br />110 new stores and sales of $84 Billion in 1994<br />Maintain growth momentum of stock prices<br />Diversification<br />Challenges<br />Decreasing comparable stores sales growth<br />Sustainability of growth rate and analyst apprehensions <br />Partnership and legal issues for international expansion<br />Growing pockets descent in local market<br />
  3. 3. Walmart – Organizational Effectiveness<br /><ul><li> Always low prices…always
  4. 4. Convenience
  5. 5. No Regional office
  6. 6. 2-step Hub-Spoke n/w
  7. 7. Store within a store
  8. 8. Small town
  9. 9. Inside out expansion
  10. 10. Low price and convenience
  11. 11. Higher volume and minimize expenses</li></ul>Structure<br /><ul><li>Integrated IT systems – Stores, Warehouses and corporate office
  12. 12. Retail Link
  13. 13. Traiting</li></ul>Strategy<br />Systems<br />Shared Goals<br /><ul><li>Frugality (Trip expense < 1% of purchases)
  14. 14. Management style – Know the competition
  15. 15. Profit sharing
  16. 16. Open door policy</li></ul>Style<br />Skills<br /><ul><li> Training system
  17. 17. Vendor mgmt
  18. 18. Supply chain mgmt</li></ul>Staff<br /><ul><li>No superstars – Extraordinary success
  19. 19. “Yes we can Sam”
  20. 20. Incentive system
  21. 21. Non-union</li></li></ul><li>Supply Chain - Process Flow<br /><ul><li>Wal-Mart’s merchandise replenishment cycle is no more than 48 hrs.
  22. 22. Retail Link – real-time point-of-sales (POS) data transmission
  23. 23. Cross Docking</li></li></ul><li>Operational Effectiveness<br />Walmart<br />P<br />COGS<br />OPS<br />Competitors<br />P<br />COGS<br />OPS<br />COGS<br />Operational expense<br />Profit margin<br />Difference in profit margin<br />
  24. 24. Sustainability of the Business Model<br />Walmart’s core competitive advantages:<br />Supply chain<br />Superior information and infrastructure systems<br />Operational efficiency<br />Deterrent to competition:<br /><ul><li>Size of investment required for competitors to challenge
  25. 25. Vendor relationship
  26. 26. Superior operating margins and cash flow</li></ul>Sustainability of the advantages<br />Superior access to resources:<br /><ul><li>Access to resources and customer base
  27. 27. National presence and brand
  28. 28. Consistently higher investment in Information technology</li></ul>Size in targeted markets <br /><ul><li>Economies of Scale
  29. 29. Experience and infrastructure set-up
  30. 30. Economies of scope</li></li></ul><li>Diversification into Food Business<br />Key challenges for Food Business:<br /><ul><li>Competition from local and regional players
  31. 31. Extremely low margins
  32. 32. Food business by nature is skewed towards local suppliers and vendors
  33. 33. Existing established players like Kroger's and Meijer</li></ul>Walmart’s strength for food business:<br /><ul><li>National brand image of everyday low prices
  34. 34. Operational efficiencies and superior margins
  35. 35. Added advantages in areas of existing Walmart stores
  36. 36. Ability to undercut prices in supercenters by other merchandizes
  37. 37. Size and financial strength </li></li></ul><li>Assessment - Food Business<br /><ul><li> Based on analysis of challenges and strengths, Walmart should be able to diverse profitably in Food business
  38. 38. As per opportunities present in the market, and growing Food business, Walmart should definitely get into Food business
  39. 39. Supercenters are key growth driver for Walmart to maintain consistent Share prices</li></li></ul><li>Questions?<br />