Wal Mart- An overview…

The Wal-Mart company, the world's largest retailer and second-largest corporation, is a dominant

US business. This study investigates whether there are significant long-run relationships between

the business of Wal-Mart and the overall US economy as measured by an array of traditional

macro-level variables. Analysis reveals that Wal-Mart sales generally move counter to overall

economic conditions, dampened in more prosperous economic periods and buoyed in more

sluggish economic environments. Consequently, trends in Wal-Mart sales may serve as a rather

non-traditional contrarian economic bellwether. Wal-Mart Stores, Inc. branded as Wal Mart, is

an American multinational retail corporation that runs chains of large discount department stores

and warehouse stores. Wal Mart remains a family-owned business, as the company is controlled

by the Walton family, who own a 48 percent stake in Wal Mart. It is also one of the world's most

valuable companies. The company was founded by Sam Walton in 1962, incorporated on

October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is

headquartered in Bentonville, Arkansas. Wal Mart is also the largest grocery retailer in the

United States. Wal Mart has 8,500 stores in 15 countries, under 55 different names.

Wall Mart- The International Picture…

Wal-Mart’s international operations currently comprise 4,263 stores and 660,000 workers in 15

countries outside the United States. There are wholly owned operations in Argentina, Brazil,

Canada, and the UK. With 2.1 million employees worldwide, the company is the largest private

employer in the U.S. and Mexico, and one of the largest in Canada.  In the financial year 2010,

Wal-Mart’s international division sales were $100 billion, or 24.7 percent of total sales. Wal-

Mart has operated in Canada since its acquisition of 122 stores. In 2010, Wal-Mart Canada Bank

was introduced in Canada with the launch of the Wal-Mart Rewards MasterCard. In the mid-

1990s Wal-Mart tried with a large financial investment to get a foothold in the German retail

market. In 1997 Wal-Mart took over the supermarket chain Wertkauf with its 21 stores.  Wal-

Mart’s "Big Box – Low Price" Model, a price strategy that works well in the U.S., was not

successful in Germany. In 2004, Wal-Mart bought the 116 stores in the Bompreço supermarket

chain in northeastern Brazil. Sales in 2006 for Wal-Mart’s UK subsidiary, Asda accounted for

42.7 percent of sales of Wal-Mart’s international division. In contrast to the US operations, Asda

was originally and still remains primarily a grocery chain, but with a stronger focus on non-food

items than most UK supermarket chains other than Tesco. Wal-Mart has joint ventures in China

and several majority-owned subsidiaries. Wal-Mart’s majority-owned subsidiary in Mexico

is Walmex. In Japan, Wal-Mart owns 100 percent of Seiyu as of 2008. In January 2009, the

company acquired a controlling interest in the largest grocer in Chile.

Wall Mart’s Presence Table…

Four Ps of Wall Mart…

Product- the Company is hosting products regarding electronics, movies, music, books,

furniture, and all types of baby products, pharmaceutical products, jewellery, toys, photography,

grocery and many more. They provide facility of online shopping and safe shipping. A very

reliable and warranted system is provided to the customers purchasing any type of goods either

online or directly through mega stores. Wal-Mart mostly exhibit private labeled brands and

brands like Cott Beverages were exclusively marketed at Wal-Mart outlets.

Price- Universal bar code is the bench mark of this company and specifically an achievement for

the founder. Prices of the grocery items at the Wal-Mart stores are as low as 15% of the local

market. Electronic items and technological market rates are as lower as possible. Their price

policy welcomes only those producers who are producing at the huge demand of the company,

others being thrown out of the market.

Place- Sam’s Club, Wal-Mart stores U.S, and Wal-Mart International are the three divisions in

which Wal-Mart is working. Wal-Mart outlets are marketing with different names in Mexico,

Japan, India, Brazil, UK, Canada, South America and China. Wal-Mart is a huge network of

apparel stores, small markets, cash and carry stores, membership warehouse clubs, supercenters,

food and drugs, etc. The outlets are huge buildings with an average area of 197,000 square feet.

38 Mega stores are operating in different countries with almost 1500 employees serving there in

each store.

Promotion- Online order placing shipment at the desired place is the major revenue earning

source. Have an efficient working website and the database is designed to facilitate the

customers and the contents are very well organized and easily reachable. Basically the company

started with the discount principle but still apart from routine discount seasonal discount offers

and bulk discount offers are also given, and sometimes products rates are fixed at very low price

for a very limited period of time.

Wall Mart- Situational Analysis (Going Global)…

Why Global- One and only reason is to survive in this competitive market.

Other reasons for growth are-

Capital market expectations – continuous sales and profits.

Expectations of its own employees.

Saturated domestic market.

U.S. just 4% of the global population.

Emerging markets- Tremendous opportunities.

Wall Mart- INDIA Chapter…

In November 2006, the company announced a joint venture with Bharti Enterprises to open retail

stores in India. As foreign corporations were not allowed to directly enter the retail sector in

India, Walmart operated through franchises and handled the wholesale end.[92] The partnership

involves two joint ventures; Bharti manages the front end involving opening of retail outlets,

while Walmart takes care of the back end, such as cold chains and logistics.

Wall Mart- Reason for Entry

India is a tremendous potential market where middleclass population comprises of 300 million. It

has consumer class of 105 million growing at a rate of 10% and with an annual average

household income of $3000. Demographics- 60% of the Indian population is in the age group of

20-30 and is more inclined towards modern shopping. GDP growth is about 6-8%.

Wall Mart- Opportunities in India

India’s retail trade is estimated at $206 billion and growing at 5% annually and only 3% of

market is organized comprising of shopping malls. India is a vast market for food retailing and

one can add value to the customers by means of low price and wide range of merchandise.

Step 1: DECIDING COUNTRY- Specifics of the business, competitive and

economic environments.

Acquiring an existing player.

Starting new stores on own. Joint Ventures.

Step 2: DECIDING STRATEGY.

Wall Mart- Challenges in India

A protest from the small grocery retailers (Kirana) is the main threat for them. FDI entry

restriction is the second most reason. Competition from Indian retailers including Pantaloon,

Shoper’s Stop, Piramals and the political controversies at each state.

Wall Mart- Operations…

Supply Chain Integration in developing countries by Wal-Mart.

Wall Mart- Marketing Strategy

Mission/Vision: To give ordinary folk the chance to buy the same thing as rich people.

Product Strategy: Lowest prices across-board the product lines.

Product U S P: Core competency, Low prices, In-stock positions, Customer service.

Service Strategy: Respect for the individual, high standards of service and constant strive for

excellence.

Segmentation: Middle class, Lower Middle class.

TOTAL DELIVERY TIME

YOU PLACE YOUR

ORDER

PROCESSING TIME

WE SHIP YOUR

ORDER

SHIPPING TIME

DELIVERY

Positioning: Consistent positioning – “Always Low Price”

Activities: Food retail, Non-Food retail, and online food retail.

Intangibles: Personalized customer service.

SWOT

S trength

Efficient supply chain management

Service innovation and technology

Large convenience stores, which offer one stop solution for all the customer needs.

Least cost of packaging

Strong penetration strategies

Infrastructure (financial strength)

W eakness

Poor public image

Late entrant in international market.

Unable to adapt to different countries

Un-unionized & Strict labor laws

Were unable to handle media

High law suits against the company.

Greater global footprints makes for difficulty in inventory management

Opp ortun ity

Many countries are still left

Unorganized retail

Globalization (diminishing trade barriers)

Cold Storage market.

Increase in consumer purchasing power

E-business

Unemployment

T hreats

Competitors

Anti-outsourcing laws coming into force

An increasingly environment conscious consumer base

Exposure to the political and socio-economic upheavals across the world

Recommendation

Understanding the consumer behavior is needed. Market segmentation is to be done. Format of

the stores should be super centers or hypermarkets. And lastly Wal-Mart to adopt a blended

model of its traditional format with the reality of Indian real estate.