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Introduction

Wal-Mart Stores is an American multinational retail


corporation that runs chains of large discount department
stores and warehouse stores.
Is the largest retailer in the world.
The company was founded by Sam Walton in 1962
Walmart has over 11,000 stores in 27 countries, under 55
different names.

What it takes to be a
WAL-MART
The winning strategy- selling branded products at low cost.
Non dependence on any single vendor.

Reliability on its own distribution system.

Mission Statement, Vision, Goals, & Purpose

Mission Statement:
To help people save money so they can
live better

Goal:

Becoming an international brand

Vision:
If we work together, well lower the
cost of living for everyonewell give
the world an opportunity to see what
its like to save and have a better life.

Advertising slogans:
Save Money. Live better

Corporate strategy

Dominance in retail market.


Expansion in US and international market.
Creation of positive brand and company recognition.
Branching into new sectors of retail.

Business Strategy
Walmart uses 3 generic business strategies
Focus strategy
Focusing on offering products and services to a particular
market segment or buyer group, within a segment of a product
line, and/ or to a specific geographic market
Differentiation strategy
Offering a product or service that is perceived as unique in the
marketplace.

Overall Cost leadership


Offering customers great quality service and products at a
lower price than their competition.

Wal-Mart Value Chain

SUPPORT
ACTIVITIES

FIRM INFRASTRUCTURE
Successful integration of activities in value-chain
Maintain focus on brand and concept and bringing store-level concepts back to top
Relied on balance scorecard

HUMAN RESOURCE MANAGEMENT


Focus on the individual employees empowering them as associates and equal feedback
Competitive benefits and wages and great training program

TECHNOLOGY DEVELOPMENT
Leading-edge, highly developed IT systems completely integrated with entire supply chain
Automated distribution sites
Real-time access to sales information from all stores

PROCUREMENT
Real-time connection with store inventories and suppliers
Direct contact with suppliers, by-passing middle-man
Best Retailer to do Business With could provide greater operating efficiencies by supplying real-time data
Cross-border relationships with China

INBOUND LOGISTICS

OPERATIONS

Real-time data of inbound and in- Easily replicable


progress inventory data
model
Conveniently location of all highly real-time inventory
automated distribution facilities
and sales tracking
Majority of inventory flows
system
through dist. Centers
High sales per square
Own trucking fleet largest in US foot
Mastered large-scale crossdocking

OUTBOUND
LOGISTICS

MARKETING &
SALES

Trucks never
return with an
empty truck

Always Low
Prices. Always.
Tailor product
assortment by
community and
store layout
Only big-box
around

SERVICE
High
focus on
customer
service

PRIMARY
ACTIVITIES

The Five Forces Model


1. Bargaining Power of
Customers: Low
I.

Customers usually make small


purchases.
II. A large number of customers.
III. Wal-Marts main customers are
individuals.

2. Bargaining Power of
Suppliers: Medium-Low
I.

Wal-Mart purchases huge quantities of


products from its suppliers.
II. Low switching costs from one supplier
to another.
III. Products have a lot of substitutes.
IV. Almost all the products are not critical
for Wal-Mart.

The Five Forces Model


3.
I.
II.
III.
IV.
4.
I.
II.
III.

Potential entrants / Barriers to entry:


Medium-High
Economies of scale.
High capital requirements.
Customers mainly look for products with low prices
and standard quality.
Requires a precise distribution system.
Power of Substitutes: High
Prices and quality of substitute products are very
competitive.
Performance of substitute products are similar.
Consumer switching costs are low.

The Five Forces Model


5. Potential Competitors/ Rivalry: High
I.
Wal-Mart represents the 25% share of the U.S. Supermarket business.
II. Competitors have similar sizes.
III. Industry growth is slow.
IV. Exit barriers are high.
V. There is a high production capacity
WAL-MART main competitors:

Retailer Industry:
Target
K-Mart

Supermarket Industry:
Dollar General
Lowes Food.

Michael Porters Five Forces Model


for retail industry

1.Threat of New Entrants.


One trend that started over a decade ago has been a
decreasing number of independent retailers.
Walk through any mall and you'll notice that a majority of
them are chain stores.
While the barriers to start up a store are not impossible to
overcome, the ability to establish favorable supply contracts,
leases and be competitive is becoming virtually impossible.
Their vertical structure and centralized buying gives chain
stores a competitive advantage over independent retailers.

2.Bargaining power of suppliers.


Bargaining power of buyers is moderate because of the size and
concentration of major retailers.
Individual private customers have a relatively low bargaining
power in front of large retail chains, however, their power is
greater for small retailers, who are less organized.
A contract with a large retailer such as Wal-Mart can make or
break a small supplier. In the retail industry, suppliers tend to
have very little power.

3.Power of Buyers.
Individually, customers have very little bargaining power with
retail stores.
It is very difficult to bargain with the clerk at Safeway for a better
price on grapes.
But as a whole, if customers demand high-quality products at
bargain prices, it helps keep retailers honest.

4.Threat of substitute products.


The tendency in retail is not to specialize in one good or service,
but to deal in a wide range of products and services.
This means that what one store offers you will likely find at
another store.
Retailers offering products that are unique have a distinct or
absolute advantage over their competitors.

5. Competitive Rivalry
Is increased by equal size and power of dominant retailers
who are pushing to increase market share.
The trend of extinction of small retailers through acquisitions,
mergers alliances and high cost to exist this market.
Among leading group there are More, Reliance store, Big
bazar and Flipkart that are dominating the large markets of
retail sector in India.

Analysis
5 Forces

Analysis

Rivalry among the competitor

Reliance Retail, Aditya Birla Group , Vishal Retails,


Bharti and Walmart, etc

Threat of entrants
FDI policy not favorable for international players.
Domestic conglomerates looking to start retail chains.
International players looking to foray India.

Bargaining power of supplier

The bargaining power of suppliers varies depending


upon the target segment.
The unorganised sector has a dominant position.
There are few players who have a slight edge over
others on account of being established players and
enjoying brand distinction.

Bargaining power of buyers

Consumers are price sensitive..


Availability of more choice.
Unorganized retail

Threat of substitutes

Value chain analysis of retail industry