IMSP Project On Strategic Management

Submitted by-
Nipun Sharma
Priyank Sharma
 Introduction
• Sam Walton, began his retail career when he started work on June 3,
1940.
• On July 2, 1962, Walton opened the first Wal-Mart Discount City
store.
• The company was incorporated as Wal-Mart Stores, Inc. on October 31,
1969.
• 1987 there were 1,198 stores with sales of $15.9 billion and 200,000
associates.
• At that time, it has the largest private satellite network, allowing the
corporate office to track inventory and sales and to instantly
communicate to stores.
• In 1988, the first Walmart Supercenter opened in Washington.
• In 1998, Walmart introduced the "Neighborhood Market" concept
• 2002, it was listed for the first time as America's largest
corporation on the Fortune 500 list, with revenues of $219.8
billion and profits of $6.7 billion. It has remained there every
year, except for 2006.

• Currently they are into 9 different retail formats—

1. Supercenters,
2. Food and drugs,
3. General merchandise stores,
4. Bodegas (small markets),
5. Cash and carry stores,
6. Membership warehouse clubs,
7. Apparel stores,
8. Soft discount stores,
9. Restaurants.
 Vision
Do it, try it, fix it.
To become the worldwide leader in retailing.

Sam Walton’s vision

“If we work together, we’ll lower the cost of living for
everyone…we’ll give the world an opportunity to see
what it’s like to save and have a better life.”
 Mission
"Our mission is to enhance and integrate our supplier
diversity programs into all of our procurement practices
and to be an advocate for minority- and women-owned
businesses.“

'To give ordinary folk the chance to buy the same thing as
rich people'
 WAL-MART’S
INTERNATIONAL EXPANSION STRATEGY

Wal-Mart’s strategy has been to acquire companies

and convert them into the Wal-Mart way stores. It
could achieve competitive advantage abroad by
applying its combination of technology, logistics and
human resources with its tremendous buying power with
multinational consumer goods suppliers.
 SWOT Analysis
STRENGTH

• They have a strong IT system as implemented EDI,

Information system, Satellite system, Pick to light system,
Vendor management inventory system which was not
implemented by any other competitor.
• Supply Chain (Strong)- long term relationship with the
supplier as there was no non sense negotiator as they
eliminated the manufacture representative from negotiation
with the suppliers.
 Weaknesses

• Since Wal-Mart sell products across many sectors (such as

clothing, food, or stationary), it may not have the flexibility of
some of its more focused competitors.
• It is the World's They are facing competition in local markets.
• Competitors may imitate their strategy.
• Intense Price Competition
• Legal and political issues
• largest retailer so control of its empire, despite its IT
advantages, could be weak in some areas due to the huge span
of control.
 Opportunities
• To take over, merge with, or form strategic alliances with
other global retailers, focusing on specific markets such as
Europe or the Greater China Region and India.

Threats
• They are facing competition in local markets.
• Competitors may imitate their strategy.
• Intense Price Competition
• Legal and political issues
 PEST Analysis
Political Influences
a) E.U. custom regulations.
b) F.D.I. restrictions in retail.
c) Political Ideology.

Economic Influences
a) Recession, Inflation.
b) Exchange Rates.
c) Low per capita income in developing countries.
 Social Influences
a) Marketing strategies ineffective
b) Language and Cultural barriers.
c) Anti- Globalization Movements.

Technological Influences
a) Advances in technological and satellite systems.
b) Lack of basic infrastructure in ASIAN countries.
 Porter’s 5 Forces Model
• Bargaining power of suppliers –
LOW – Size of WALMART
Entirely dependent on WALMART for sales
• Bargaining power of buyers-
LOW- Best pricing
Proactive customer service
• Threat of entry-
MEDIUM- High Investment cost.
Extensive distribution network.
Scale and Scope of operations is high
• Threat of substitute-
MEDIUM- Mom and pop stores charge higher
It serves to nearly all consumer needs
Loyalty Schemes run by other companies

• Intensity of Competitive Rivalry-

MEDIUM- Price wars have reduced margins from 6% to 1%
in USA.
Competition from existing Retail chains.
 Value Chain Analysis
Inbound Logistics
Wal-Mart’s primary activity of receiving inventory is planned
right from the point of production.
Operations
A leaner approach to inventory.
Wal-Mart innovated a technique of replenishment called the
Cross-Docking
Outbound Logistics
Goods are transferred within 48 hours of receipt from
suppliers.
Marketing and Sales
Wal-Mart maintains a simple and effective marketing strategy
which it has managed to replicate globally.
Service
Wal-Mart is aggressive yet subtle ‘People Greeters’ and in its
own fashionable and proud way ‘Aggressive Hospitality’.
Infrastructure
It maintains its own fleet of trucks.
Human Resource Management
Wal-Mart is the only retailer to be in Fortune’s 100 Best Places
to Work.
Technology Development
It’s technology and inventory management systems and
software are better than the best in the world and also the
lifeline of the organization.
Procurement
It’s satellite communication and EDI links all its stores to over
4000 suppliers creating the finest procurement co-ordinated
scenario.
 CORE COMPETENCES
• Inventory management skills with its supply chain
management.

• Innovations like the cross-docking techniques and IT.

• Relationship strategy maintained with its customers, suppliers,

and associates.

• Low cost Leadership through scale of operation.

 WAL-MART AND INDIA
1. India is an appealing market for Wal-Mart with its growing middle class of
250 million and an economic growth rate of nearly 9% .
2. In November 2006, Wal-Mart beat out Tesco for a joint venture
opportunity with Indian mobile services leader, Bharti.
3. Bharti is managing the front-end of the business, while Wal-Mart is taking
care of the supply chain, logistics and other back-end operations.
4. The proposed Bharti venture seeks to serve the retail market by supplying
it with goods directly from producers such as agriculturists, craftsmen and
artisans.

THREATS
• The leaders of the retail market are the 12-40 million tiny mom-and-pop
retail shops which are predominantly run by small family businesses.
• The mom-and-pops have an advantage as they are conveniently located on
street corners.
• Existing Retail Chains like Rel. Fresh, Subhiksha, Spenccers, Big Bazaar,
Vishal Megamart, Salasar.
References:

• Wal mart’s corporate website

• Oppapers.com
• Wikipedia
• Wikianswers.com
Thank You……..