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Management‘s Initiatives to Transform the Company and Curtail Wal-Mart Bashing

Wal-Mart Stores Inc.

FACT - Strategisches Controlling

Caroline Steinhagen

Anne Zänker

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I. Introduction Video-Clip

II. Critics about Wal-Mart

III. History of the Company

IV. Wal-Mart‘s Strategy

V. SWOT-Analysis

VI. Conclusion

Agenda

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II. II. II. II. Critics about WalCritics about WalCritics about WalCritics about Wal----MartMartMartMart

� low wages

� move the production to China

� employment of illegal immigrants

� discrimination against women

� political influence

� non-unionized politics

� „Wal-Mart Effect“

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III. History of the CompanyIII. History of the CompanyIII. History of the CompanyIII. History of the Company

1962 – opening of the first stores in Arkansas

1990 – largest retailer in the United States

1991 – international market entry

1999 – largest private employer in the US

(1,14 million associates)

2000 – Lee Scott is third CEO

2006 – transformation process

2008:

• sales: $ 365 billion / profit: $12.7 billion

• over 7000 stores with 2,1 Mio workers world wide

• 4 different store concepts

Sam Walton

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IV. IV. IV. IV. WalWalWalWal----MartMartMartMart‘‘‘‘ssss StrategyStrategyStrategyStrategy

Overall Low-CostProvider Strategy

BroadDifferentiation Strategy

FocusedLow-CostStrategy

FocusedDifferentiation Strategy

Best-CostProvider Strategy

Type of Competive Advantage Being Pursued

Lower Cost Differentation

Market Target

A BroadCross-Sectionof Buyers

A Norrow BuyerSegment (orMarket Niche)

Five Generic Strategies (M.E. Porter)

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IV. IV. IV. IV. IV. IV. IV. IV. WalWalWalWalWalWalWalWal--------MartMartMartMartMartMartMartMart‘‘‘‘‘‘‘‘s Strategys Strategys Strategys Strategys Strategys Strategys Strategys Strategy

company cultureleadership

purchase organisation/ supplierssales system/

customers

internal processes

-supply chain-distribution

-technology

expansion

national

international

→ overall low cost provider

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IV. WalIV. WalIV. WalIV. Wal----MartMartMartMart‘‘‘‘s Strategys Strategys Strategys Strategy

environment

•„zero waste“ campaign

• biodegradable

packaging

• efficiency of the fleet

• reduce energy

consumption in stores

customers

• new store appearance

• offer extended

• faster check-out over

the counter

• store of the community

employees

• higher salaries

• health insurance

• bonus payments

• paid vacation

• maternity leave

• 10% employee

discount

transformation process

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V. SWOT V. SWOT V. SWOT V. SWOT –––– AnalysisAnalysisAnalysisAnalysis

THREATS

� competitors (Target, Kmart)

� relations to suppliers

� public critics

� impact of lobbying

� unions

OPPORTUNITIES

� choice of location

� demand for discounters

WEAKNESSES

� wages, social benefits

� image

� no trainings for associates

� focus of cost savings

STRENGTH

� cost guide

� technological developments

� supply chain

� range/ collection

� brand

POSITIVE NEGATIVE

INTERNAL FACTORS

EXTERNAL FACTORS

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V. SWOT V. SWOT V. SWOT V. SWOT –––– AnalysisAnalysisAnalysisAnalysis

valuation of customers (United States)

source: Zenith Management Consulting (2005)

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VI. ConclusionVI. ConclusionVI. ConclusionVI. Conclusion

� Wal-Mart divides the minds in the society

� consistent tracking of corporate philosophy

� influential, strongly in highly competitive, profitable

� future perspective?!