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WALMART : CRAFTING & EXECUTING STRATEGY

" if you think about it from the point of view of

the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience. You love it when a store exceeds your expectations, and you hate it when a store inconveniences you, gives you a hard time, or pretends you're invisible. - Sam Walton

WALMART
1962- Sam Walton, the founder opened the

companys first discount store in Rogers, Ark. The company officially incorporated as Wal-Mart Stores Inc. on October 31, 1969. 1991, Walmart became an international company when it opened a Sam's Club near Mexico City Branded as Walmart since 2008 Today 9700 stores and club locations in 28 countries employ 2.1 million associates, serving more than 176 million customers a year.

"Always Low Prices, Always

"Save Money Live Better"


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. - Sam Walton

Source: 2010 Global Powers of Retailing report, published each year by Deloitte Touche Tohmatsu and STORES Magazine.

Walmart Stores U.S.


Wal-Mart is by far the largest retailer in the U.S. and

the world in terms of revenue generated. With fiscal year 2010 sales of $405 billion Walmart Stores U.S. is the company's largest division, accounting for $258 billion, or 63.8% of total sales for financial year 2010 It has more than 8,986 retail units and operates under 55 different banners in 15 countries.

Walmart International

5,261 stores and more than 730,000 associates in 27


countries outside the continental U.S.

Walmarts Strategy
Multiple store formats

Low everyday prices


Wide selection A big percentage of name brand merchandise A customer friendly store environment Low operating costs Innovative merchandising A strong emphasis on customer satisfaction Disciplined expansion into new markets Using acquisitions to enter foreign markets

MULTIPLE STORE FORMATS 1. Walmart Discount Stores


First discount store in 1962. Today, there are 681 stores The size of an average store

is 108,000 square feet.


225 associates.

Each store employs about

General merchandise

Family apparel Healthy and beauty aids Electronics Toys Lawn and garden items Jewelry Automotive products Home furnishings Hardware Sporting goods Pet supplies Housewares

2. Walmart Supercenters
Developed in 1988 to meet the growing

demand for convenient, one-stop family shopping featuring our famous Every Day Low Prices.

Save your time and money by

combining a full grocery and our general merchandise under one roof.

Supercenter groceries General merchandise Most Supercenters also

There are 2,952 Supercenters

nationwide, and most are open 24 hours.

Supercenters average 185,000 square

have many specialty shops

feet and employ about 350 or more associates.

3. Walmart Neighborhood Markets


Offer a quick and convenient shopping experience for customers who need groceries, pharmaceuticals, and general merchandise all at our famous Every Day Low Prices.

First opened in 1998, there are

now 185 Walmart Neighborhood Markets, each employing about 95 associates.

A typical store is about 42,000 square feet.

Fresh produce Meat and Dairy products Frozen foods Dry goods and staples Health and beauty aids Stationery and paper goods Bakery items Canned and packaged goods Condiments and spices Pet supplies Household supplies One-hour photo center

4. Walmart Express Stores


The first two Walmart Express test stores opened in June

2011 in Northwest Arkansas.

Created to offer low prices every day in a smaller format

store that provides convenient access for fill-in and stockup shopping trips. especially in rural and urban areas where shoppers may not have access to larger stores. merchandise, including an assortment of fresh produce, dairy and meat, dry goods, consumables, health and beauty aids, over-the-counter medicines and more.

The stores give Walmart flexibility in serving customers,

Average 15,000-square-feet and offer groceries and general

5. Marketside
Opened in 2008, Marketside stores are small community

pilot grocery stores specializing in fresh, delicious meals at great prices.


Provide a fresh and convenient shopping experience for

busy people who want an easy answer to the question, 'What's for dinner?
Customers can shop for a variety of fresh ingredients,

restaurant-quality prepared meals and their everyday favorite national brands - even freshly baked breads and a wide assortment of wines.

6. Walmart.com
Founded in 2000, Walmart.com brings the convenience, great

merchandise selection, friendly service and Every Day Low Prices of your neighborhood Walmart to the Internet.

Walmart.com features more than 1,000,000 products, plus easy-to-

use music downloads and digital one-hour photo services

During the holidays, Walmart.com features many special offers

available only online.

Its also a convenient place to find out about exciting instore

holiday specials.

With innovative Site to Store program, you can purchase items at

Walmart.com and then have them shipped free to your local store for pickup.

7. Sam's Club
Opened its doors in Midwest City, Oklahoma, in 1983. Today, Sams Club operates 609 locations nationwide. Typical clubs are

about 132,000 square feet and employ about 175 associates.

A chain of membership-only retail warehouse clubs owned and

operated by Wal-Mart Stores, Inc., and named after Wal-Mart founder Sam Walton

Sam's Club stores are "membership" stores and most customers buy

annual memberships. However, non-members can make purchases either by buying a one-day membership or paying a surcharge based on the price of the purchase

Sam's Club's sales during 2010 were $47 billion, or 11.5% of Walmart's

total sales.

Walmarts geographic expansion strategy


New stores were within 200miles of an existing

distributing center

Always expanded into adjoining geographic areas,

saturating each area, then move to another

Backward expansion: 1st it opened in small towns

surrounding a targeted metropolitan area before moving there spread advertising expenses- maintain advertising cost below 1pecent of sales

By clustering new stores in relatively small areas it could

Low Everyday Price


Customer viewed Walmart as the lowest priced

general merchandise retailer


Displayed low price tags, displayed We sell for

Less in store fronts, advertisements, logos, sign boards etc.

Merchandising Innovations
Industry leader in testing, adapting, and applying wide range of

merchandising approaches

Active in testing and experimenting with new merchandising

techniques

Ideas for improvement were gathered from employees, vendors,

customers

Successful ideas were implemented in other stores as well Experiments in Store layout, displays, store color schemes, sales

promotion methods etc.

Advertisement
Lesser advertisement than other discount chains Relied primarily on word of mouth to

communicate its marketing message


Local TV, radio advertisement

Sams Club Stores- no advertisement

Distribution network
Logistics Its the heart of the Walmart

operation
One of the largest private distribution operations in the world.More than 40

Regional Distribution Centers. Each one is over 1 million square feet in size.

They operate 24/7 to keep our fleet of tractors and trailers rolling.

Inside each DC, more than five miles of conveyor belts move over 9,000

different lines of merchandise. Each DC supports between 75 and 100 stores within a 250-mile radius.

There are also distribution centers for specific product categories such as

grocery, jewelry, pharmacy, apparel/shoes, and for Sams Club.

The DotCom Distribution Centers, which support the Walmart.com online

operation and the Site to Store program, is the fastest growing segment of the distribution network.

Approaches to strategy execution


Use of technology
1974 onwards technology enabled 1989 established direct satellite links with about 1700

vendors- allowed instant data exchanges and electronic purchase orders 1990 invested in IT and online systems 2003 developed and deployed sophisticated IT systems and capabilities real time access to deatiled figures and leader in cost effective SCM It could track movement of goods through its entire value chain 2005 EPC technology based on RFID- helped to reduce stock out by 33% and boost productivity

Relationship with suppliers


Biggest customer of all its suppliers

Bargained to get bottom prices


Supplier characteristics Dominant in their category

Grow with the company


Full product lines Long term commitment to R&D Walmart standard for suppliers

Store construction and maintenance


Worked more to benefit out of its expenditure for new

stores, store renovations, store fixtures


Ideas were solicited from vendors regarding store

layout, design of fixtures, space for effective displays etc


All stores were renovated and redecorated at least once

every seven years


High degree of uniformity in the new stores it built

Superior customer service


Aggressive hospitality 10 foot attitude- encouraged associates to take this

pledge with him: "I promise that whenever I come within 10 feet of a customer, I will look him in the eye, greet him, and ask if I can help him.

5 things imparted while training to new store

personnel: Think like a customer Sell what customer want to buy Provide a genuine value to the customer Make sure the customer had a good time Exceed the customers

Sundown Rule- why put off until tomorrow what

you can do today? - Whether it's a request from a store across the country or a call from an associate down the hall, we do our very best to give our customers, and each other, same-day service

Soliciting ideas from associates


Open Door - free to share suggestions, ideas and voice

concerns, whether its help with a problem, guidance or direction, or simply getting an answer to a question Were all part of the same family the Walmart family. And like family, we care. Grass Roots Process - associate opinion survey it gives every single associate a way to voice their ideas, suggestions and concerns. Servant Leadership- develop leaders who are servants, who listen to their partners their associates in a way that creates wonderful morale to help the whole team accomplish an overall goal

Teamwork, Open Communication Mutual Support, Mutual Respect Walmart Cheer

Give me a W! Give me an A! Give me an L! Give me a squiggly! Give me an M! Give me an A! Give me an R! Give me a T! What's that spell? Walmart! Whose Walmart is it? It's my Walmart! Who's number one? The customer! Always!

3 basic beliefs and values


Respect for the Individual 2. Service to our Customers 3. Striving for Excellence
1.

Conclusion
Getting lowest possible price from its suppliers

Close relationship with suppliers


Win win cost savings through supply chain Lean and efficient internal operations

Attention in store layout and merchandising


Use of technology Nurturing a culture that thrived on hard work Pleasing customers

THANK YOU