Walmart: Smiling around the world

Presented by group 3
 Introduction
• Walmart has epitomised the
great side of American
capitalism:

• Its self made billionaire founder

• Its highly efficient customer care
• Its brilliantly used technology
• Sam Walton realised the difference
retail will make to consumers

• 176 million customers in 13

countries and over 7000 stores

• Growth rate up by 7.6% in

operating income during recession

• Walmart Stores Inc. Record sales

during year 2008
 Company History

• 1940 – Sam Walton worked for J.C. Penney

who enthused him about retailing
• 1945 – Acquired a franchise of Ben Franklin
• In 3 years, Sam Walton brought sales from
$80,000 to $225,000.
• Still the lease renewal was declined
• 1950 – Sam Walton purchased a store and
opened Walton’s 5 & 10
• 1962 – Sam Walton had 11 stores

• At that time, discount stores were a success

• Sam Walton opened Rogers, the first discount store,

which is now known as Walmart

• 1967 – the company had 24 stores in Arkansas

• 1974 – increased to 78 stores and an inter-store

computer network developed
• Within 25 years in
1987, 1198 stores
Developed with $15.9
billion

• With $24 million

investment, a satellite
network linked all
Operating units
 Walmart Super Centres
• Demand for one-stop shopping led to full line
grocery department & general merchandise.
• One-stop family shopping convenience
 Walmart Neighbourhood markets

• Range of grocery stores approx. 42,000 sq feet

• Also offers pharmaceuticals, health and

beauty aids, photo developing services
 Sam’s Club

• America’s largest membership warehouse

club

• Focused on serving small business owners

• Serves specific business segments including

retail stores, food services/restaurants, offices
 Wal-mart.com

• Aims to combine the best of two great worlds:

• Technology
• World class retailing

• Offers wide assortments of customer’s

favourite product (24X7)
 Wal-mart International

• United Kingdom, Brazil, China & Argentina

• 3 strategic initiatives:
• Create shareholder value
• Enhance Walmart’s global leverage
• Win each market
 The Wal-mart Culture

• Corporate culture – biggest contributing factor

that makes it world’s most admired companies

• Respect the individual

• Service to our customers
• Strive for excellence
• The 10-foot rule
• The Saturday morning meeting
 10 rules of success
• Rule 1 – Commit to your business

• Rule 2 – Share your profits with all your associates

and treat them as partners

• Rule 3 – Motivate your partners

• Rule 4 – Communicate everything you possibly can

to your partners
• Rule 5 – Appreciate everything your associates
do for the business

• Rule 6 – Celebrate your success

• Rule 7 – Listen to everyone in your company

• Rule 8 – Exceed your customer’s expectations

• Rule 9 – Control your expenses better than
your competitors

• Rule 10 – Swim upstream

 Global Strategy: Local Focus
• The need to look beyond national borders
came from the need to grow & survive
• Satisfy the expectations of its own employees
• After 30 years, Walmart became international
• Walmart’s joint venture with Cifra – WALMEX
• Entered Puerto Rico, now with 54 stores. Also
Canada. 3rd largest retail in Brazil
• Entered Argentina by itself by a newly
introduced format Changomas

• Before Walmart entered U.K. consumers

campaign “Rip off Britain” was ongoing

• Britain’s largest supermarket

 International Challenges
• Problem faced in Germany
• Lack of understanding of local market
• Under-estimating local retailers

• Problem in Indonesia
• Methods of presenting merchandise
• Disagreements with local partners
 Tying it in together
• Ability to move the product from place to place
quickly
• Walmart’s logistics:
• 88,000 associates
• 112 distribution centres
• 51 transportation officer
• 7200 tractor
• 53,000 trailers & 8,000 drivers
• 9 disaster distribution centres stocked with
relief supplies.

• 3 goals:
• Offer price leadership on top-quality brands
• Ensure clarity of product offerings
• Invest in growth categories
 Company performance metrics
• Total sales and comparable store sales

• Operating Income

• Return on Investment

• Free cash flow