Strategic Mgmt Present

8/8/2019 Strategic Mgmt Present

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STRATEGIC MANAGEMENT

WALMART



Group No: 4 (PGDM – B)

Group Members

Nidhi Sehdev – 80

Shweta Sankaran –88Subrat Sikdar – 89Usha Narsimhan – 101Anup Vaidya – 102Kunal Joshi – 131



The Retail sector…….

• Largest industry with 8%employment

• Currently contributes 10% toGDP

• Expected to rise 25% yearly• Worth around Rs. 12,00,000

crore ($270 billion) andthe annual growth rate is5.7 percent

• US $12.4 billion –organizedretail

• Highest retail density•



A Brief Wal-Mart Timeline•

• 1950: Walton opens first five-and-dime• 1962: Walton opens first Wal-Mart in Rogers, Ark.• 1970: Wal-Mart has IPO• 1979: Annual sales top $1 billion• 1985: Wal-Mart has about 880 stores and $8.5 billion in revenue, smaller

than competitors Kmart and Sears• 1990: Wal-Mart surpasses Kmart in size• 1992: Wal-Mart surpasses Sears in size; Sam Walton dies• 1998: Introduced Neighborhood market concept• 1999: Acquired ASDA• 2002: Got listed on Fortune 500 as USA’s largest corp.• 2005: Wal-Mart sales at $312.4 dollars, more than 6,200 stores globally• 2007: New slogan ‘Save Money Live Better’• 2008: Unveiled New logo ‘WalMart’•





Walmart Revenue



Walmart presence … Globally

• Retail Units Worldwide 7,608•

• US Retail Units - 4,253•

• Wal-Mart Stores - 894Supercenters - 2,610Sam’s Clubs - 599Neighborhood Market -146

Marketside – 4•

• International Retail Units 3,355

•



The Number Walmart Stores…..(from inception till date)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1968 1973 1978 1983 1988 1993 1998 2003

2008

7,608



What Sam Walton says……..

"The secret of successful retailing is to give your customers what they want. And really, if you think about

it from your point of view as a customer, you want everything: a wide assortment of good-qualitymerchandise; the lowest possible prices; guaranteed

satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant

shopping experience.“

- Sam Walton (1918-1992)



Mission Statement of Walmart•

• From inception till 2007 – ‘‘Always Low Prices.Always.’’

•

•

•

• From Sep 2007 onwards -‘‘We can save people moneyso they can live better.’’



Vision Statement of Walmart•

• Do it, try it, fix it!

• To become the worldwide leader inretailing.

•



Objectives of Walmart•

• Short Term – To have 90% of the customers leave the store satisfied

with their experience at the store

• Long Term

– To be the world's largest low cost store that carries alltypes of merchandise for all possible consumers – To maintain strong customer loyalty – To increase the amount and type of stores internationally,

as it is in the United States



Objectives of Walmart

• Walmart is passionate about combining the best of two greatworlds — technology and world-class retailing

•

– To give customers a wide assortment of their favorite products – Every Day Low Prices – Guaranteed satisfaction – Friendly service – Convenient hours (24 hours, 7 days a week) – A great online shopping experience

•





STRENGTHS

• Powerful retail brand•

• Reputation for value for money, convenience and awide range of products all in one store

•

• Global expansion (E.g. its purchase of the UnitedKingdom based retailer ASDA, joint venture withBharti in India)

•

• Core competence involving its use of informationtechnology to support its international logisticssystem

– E.g. 2 innovative logistics technique – cross docking &EDI (Electronic Data interchange)



WEAKNESSES•

• Huge span of control as Wal-Mart is the World's largestgrocery retailer

•

• May not have the flexibility of some of its morefocused competitors as it is a one stop shop

•

• Though global, has presence only in few countries as of now



OPPORTUNITIES•

• Take over, merge with, or form strategic alliances withother global retailers, focusing on specific markets

•

• Tremendous opportunities for future business inexpanding consumer markets

•

• New locations and store types



THREATS•

• Being number one makes Wal mart the target of competition, locally and globally

•

• Being a global retailer, Wal Mart is exposed to political problems in the countries that it operates in

•

• Intense price competition due to fall in the cost of producing goods•





POLITICAL INFLUENCES

• The political influences in this industry is probably themost burning concern with organizations going globaland many countries restricting the growth of companies by many countries.

•

• European Customs and Regulations heavily hamper expansion plans

•

• FDI in many countries are still heavily regulated andglobal companies are yet to set foot into emergingmarkets like India

•



ECONOMIC INFLUENCES•

• Disproportionate levels of income and consumer spending in developing countries like India and China

will impact growth of global companies•

• Exchange rates affect global sourcing and pricing policies on a day to day basis.

•



SOCIAL INFLUENCES•

• Developing countries are not used to push typemarketing and aggressive selling

•

• Bulk buying patterns predominantly present in USA, isnon-existent in Asian countries

•

• Language and cultural factors is a barrier toglobalization

•

• Anti – Globalization movements has affected growth of global companies, especially companies originatedUSA



TECHNOLOGICAL INFLUENCES•

• Development in technology and satellite systems hasgiven a boost to Wal-Mart

•

• Basic infrastructure still lacks for effective warehousingand distribution, the lifeline of a retail chain

•

• RFID (Radio Frequency Identification)



PORTER’S FIVE FORCES MODEL



Bargaining Powerof Suppliers

Suppliers have lost power over pricing and other termsdue to Wal-Mart’s size

Wal-Mart is a key customer to most of its suppliers and

they are totally dependent on it for business

Engages in aggressive selling tactics

Bargaining Powerof

Buyers

• Wal-Mart is the only store in many locations isolatingcompetition and limiting consumers choice

• Proactive customer service

• Attractive and probably the best pricing

Threat of Entry

• High Investment Costs• Extensive investment in Information Technology• Extensive distribution network• Scale and scope of operations is high• Regulatory concerns



Intensity of Competitive Rivalry

• Bargaining power of Suppliers is Low• Bargaining power of Buyers is Low• Threat of Entry is Low to Medium• Threat of Substitutes is Low to Medium

Threat of Substitutes

Department stores charge higherAll types of formats serving all types of customersLoyalty schemes run companiesClosure of Kmart will help Wal-Mart maintain betterpricing power improving profitability





Thank

You

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Strategic Mgmt Present