MM ITBK - WalMart Overview - Global Marketing by Noverino Rifai

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Wal-Mart

Featuring...
Coached by...
Noverino Rifai
Dr.Ir.Waseso Segoro, MM

To be presented on April,7st 2012

Institut Teknologi dan Bisnis Kalbe (ITBK)

Overview of WalMart 2
Noverino Rifai (noverino.rifai@gmail.com, http://noverino.wordpress.com)

Agenda
• Background
• Store Chains
• Mission and Cultures
• BCG, SWOT, 5 Forces
• Strategy

Overview of WalMart

Walmart Background
• 1945 Sam Walton opened the first Ben Franklin franchise in Newport
Arkansas and operated them with his wife, Helen and brother, Bud.
▫ These were small chains that were very successful.
• November 1962 Wal-Mart was opened.
• Wasn’t until mid 1970’s that Wal-Mart began to grow.
• 1972 – Walmart goes public
• 1983, the first Sam’s Club members-warehouse store opened.
• The first Supercenter opened in 1988, featuring a complete grocery, and
36 departments of general merchandise.
• By 1989, there were 1,402 Walmart stores and 123 Sam’s Club
locations. Employment had increased tenfold. Sales had grown from $1
billion in 1980, to $26 billion.
• Today, 10,130 stores and club locations in 28 countries employ 2.2
million associates, serving more than 176 million customers a year.
• We employ 2.1 million associates globally, including almost 1.4 million
in the United States. Walmart is one of the largest private employers in
the U.S., the largest in Mexico and one of the largest in Canada as well.


Who was Sam Walton?
• Samuel Moore "Sam" Walton (March 29, 1918 – April 5,
1992) was a businessman and entrepreneur born in
Kingfisher, Oklahoma
• Worked for JC Penney
• Built his first retail store called Five and Dime
• Walton was honored for all his pioneering efforts in retail
in March 1992, when he received the Presidential
Medal of Freedom from President George H. W. Bush
• In 1998, Walton was included in Time's list of 100
most influential people of the 20th Century
• At the University of Arkansas, the Business College (Sam
M. Walton College of Business) is named in his
honor.


Store Chains
Wal-Mart currently operates 8,900 stores in
28 countries, under 55 different names
such as SEIYU in Japan, Best Price in
India, Walmex in Mexico and Asda in UK.


Worldwide Stores


Asia Stores


Indonesia Stores
• Pada 1996, Wal Mart telah hadir di Indonesia. Toko itu diusung ke
dalam negeri atas kerja sama PT Multipolar Crop Tbk dengan Wal
Mart Stores Inc, AS. Gerai pertama dibuka di Lippo Karawaci,
Tangerang.

• Wal-Mart (AS), Casino Guichard-Perrachon SA (Prancis), dan Lotte
Shopping (Korea Selatan) bersaing memperebutkan unit Hypermart
milik PT Matahari Putra Prima Tbk (Bisnis, 1 Desember 2010).

Overview of WalMart

Deloitte Report:
Global Power of Retailing 2011


Fortune 500 - 2011

http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html


Sales Figure


Global Mission


Culture
• Mr. Sam’s values
▫ We’re known around the world as the company that helps our
customers save money so they can live better. We’re also well
known for our unique corporate culture. Sam Walton built our
business on values and morals. Those rules and customs have
helped us become one of the world’s most admired companies.

• Respect
▫ At the core of every one of our rules and customs is the basic
value of respect – for the customer, associates, and suppliers. It’s
our focus for building relationships. It helps us serve the
communities in which we live, and build a business committed
to excellence.


Culture
• Open Door: open communication is critical to understanding and meeting our associates’ and our customers’
needs. Associates can trust and rely on the open door;
• Sundown Rule: we do our best to answer requests by the close of business on the day we receive them. Whether
it's a request from a store across the country or a call from down the hall, we do our very best to give each other
and our customers same-day service. We do this by combining our efforts and depending upon each other to get
things done.
• Grass Roots Process: Sam’s philosophy lives on today in Walmart’s Grass Roots Process, our formal way of
capturing associates’ ideas, suggestions and concerns.
• 3 Basic Beliefs & Values: Our unique culture has helped make Walmart one of the world’s most admired
companies. Since Sam Walton opened Walmart in 1962, our culture has rested on three basic beliefs. We live out
these beliefs each day in our interactions with our customers and each other.
▫ Respect for the Individual
▫ Service to Our Customers
▫ Striving for Excellence
• 10-Foot Rule: During his many store visits, Sam Walton encouraged associates (employees) 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."
• Servant Leadership: Sam Walton believed that effective leaders do not lead from behind their desks. "It's more
important than ever that we 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,” Sam said.
• Teamwork: Sam Walton, our founder, believed in the power of teamwork. As our stores grow and the pace of
modern life quickens, that philosophy of teamwork has only become more important over the years.
• Walmart Cheer: Don't be surprised if you hear our associates shouting this enthusiastically at your local
Walmart store. It's our cheer, and while it might not sound serious, we take it seriously. It's one way we show
pride in our company.


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!


Business Flow


BCG


SWOT – Internal Factors
• Strengths
▫ Stores in all 50 states
▫ New concepts:
 Hypermarkets, supermarkets
▫ Wide variety of merchandise
▫ Nationally advertised merchandise
▫ Limited lines of merchandise – made in USA
▫ Point-of-sale bar code scanning
▫ Great employee benefits

• Weaknesses
▫ No formal mission statement
▫ Management resisted putting women on board of directors
▫ Hiring illegal minorities to clean
▫ Growth for employees only in division


SWOT – External Factors
• Opportunities
▫ Agreement with Berkshire Hathaway, Inc. acquired McLane
Company, Inc.
▫ Fortune’s number one Most Admired Company and largest
company in nation
▫ World’s largest private satellite communication systems
▫ Ron Brown Corporate Leadership Award

• Threats
▫ “Buy American” policy
▫ Target
▫ A solution to the monopoly that Wal-Mart has created


Threats • Employing illegal aliens and
paying them unfair wages

• Pending lawsuit involving
discrimination against women

• People questioning if Wal-Mart
is too powerful

• Anti-Wal-Mart sentiments
▫ Community campaigns to
keep Wal-Mart out of towns

• Government complaints
▫ At least 60 government
complaints concerning
possible Wal-Mart anti-
union activities


Walmart and Suppliers

Walmart appears to be the only business in the world
that is able to treat its suppliers this way…


Failed in German
• July 2006
• Retailing giant Wal-Mart is bidding Auf Wiedersehen to Germany.
• The Metro retail chain will take over Wal-Mart's 85 German stores.
Wal-Mart Germany's CEO David Wild said mistakes were made.
• US Model not effective here
▫ High labor costs may have been a big hurdle for Wal-Mart
Germany, as well as workers who tried to resist management's
demands which they felt were unjust.
• Understanding the locals
▫ "Like, did you know that American pillowcases are a different size
than German ones are?" he asked. Wal-Mart Germany ended up
with a huge pile of pillowcases they couldn't sell to German
customers

• "We have to take off our hats to Körber and Metro," said Wal-Mart's CEO Leo Scott at
a retail conference in 2004. "They know how to make money in Germany."


5 Forces of Porter
• Low Threat of new entrants:
▫ Large concentration of retail chain stores
▫ Decreasing number of independent retailers
▫ Barriers to entry
 Favorable supply contract: centralized buying power
 Favorable lease contract
 Requires large amounts of capital
• Suppliers’ power: limited power to negotiate relatively to large retail chain
stores
• Buyers’ power:
▫ Individuals with limited purchasing power
▫ collectively, customers can demand high quality products at a bargain price;
• Substitute threat: high, products offered in one retail chain are available in
others
• Rivalry: slow market growth leads to fierce price competition


Strategy
• selling branded products at low cost
• 85 percent of all the merchandise sold by Wal-Mart was shipped through its
distribution system to its stores s. (Competitors less than 50 percent)
• Wal-Mart used a “saturation” strategy for store expansion. A distribution center was
strategically placed so that it could eventually serve 150-200 Wal-Mart stores within a
day.
• Wal-Mart’s marketing strategy was to guarantee “everyday low prices” as a way to
pull in customers.
• shared 50 percent of the savings from decreases in a store’s pilferage among that
store’s employees through store incentive plans.
• Wal-Mart also instituted several other policies and programs for its associates:
incentive bonuses, a discount stock purchase plan, promotion from within, pay raises
based on performance not seniority, and an open-door policy.
• Investing in global eCommerce to reach more customers (walmart.com, asda.com)
• demand manufacturers use radio frequency identification technology (RFID)


Walmart Satellite Communication Channel
• 1988
▫ Wal-Mart launches world's largest private
satellite communication system, linking all
operating units of the company and the Home
Office with two-way voice, data, and one-way
video communication.
• October 2007
▫ Wal-Mart announced that it will start re-
selling HughesNet satellite broadband
Internet access, starting at 700Kbps for
$59.99 a month
• April 2011
▫ Walmart announced this morning that it is
buying Kosmix, a social media technology
provider, in order to expand its social media
presence and connect directly with consumers.


http://www.walmart.com/


http://www.asda.com/
UK Homeshopping

Overview of WalMart

MM ITBK - WalMart Overview - Global Marketing by Noverino Rifai

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