2. WAL•MART Brief History

3. Wal-mart was found in 1962, and expand to 25 store in 1967. 66 Stores in 1970. 3800
stores in 2005
“save people money,
so they can live better”
“Each Wal-Mart store should
reflect the values of its
customers and support the
vision they hold for their
community.”
- Sam Walton

4. • environment violations,
• child labor law violation,
• and having a poor working conditions for the
workers.
Lawsuit problem and
Complains

5. • Wal-Mart store
– Walmart.com
– Supercenters format (142,000), Discount stores format and
Neighborhood Format (29000 products)
• Sam’s Club
• Wal-Mart international
Segmentation

6. • Sam’s son succeed him.
• International growth increases by 33.6%, and
domestic by 11%.
• geographically, according to ACNielsen, Wal-
Mart is the dominant store in the south, and
in midsize and small town market
• Wal-Mart is accounted for 20 percents of dry
grocery, 29 non-food grocery, 30 health and
beauty aid, and 45 general merchandise.
Sales, Growth, and
Expansion

7. • Potential competitor
– New retailer.
– barrier to entry as cost leader and also good
distribution system where it can get its
merchandise at a very cheap cost.
• Rivalry among firms
– Amazon on internet based purchase.
– faced strong core competitor which are
Sears, Target, Kmart and Costco.
Walmart: Porter’s Five
Forces

8. • Bargaining power from consumers
– Minimal
• Bargaining power from suppliers
– Wal-Mart itself that has power over its suppliers
– Faced some bargaining power from bigger firm, eg.
Coca-cola
• Substitute product
– hard find any place that sell any merchandise Wal-
Mart has one sale cheaper than Wal-Mart
– Wal-Mart’s E-commerce offer consumer an even
better bargain to its product due to its reduce cost,
given that it would have to find a place to sell that
product, having sold it on line.

9. • This section will focus on 2 major competitors
• Currently, Wal-Mart stock prices is at around
$71.36 which is a major improvement
• CostCo which sometimes are condisered the
‘anti Wal-Mart.’
• Target which is perceived as Wal-Mart for
Competitive Analysts

10. CostCo.
S TRENGTHS
• 598 warehouses and growing
• Consistent same store sales
• 3rd place as the biggest retailer in U.S.
• Recent record breaking opening days sales
internationally (Korea, Japan)
• Only slightly overvalued by about 10%
• Strong free cash flow (FCF) generation
• High Revenue Growth
• Outperform SAMCLUB (warehouse business)
• Competitive price which can compete with Wal-
Mart
• Loyal customer due to high renewal rate
• Limited products, cheap prices

11. Year FCF
2011 $1.91 billion
2010 $1.73 billion
2009 $0.84 billion
W EAKNESSES
• Competition in price lowers margins
(but can be offset by revenue from
membership)
• Lower selection of goods
• No-frills policy
• Low quality controls
CostCo.

12. Target
S TRENGTHS
• Popularity is more
appealing as it is viewed
as the upper market
• High quality control
• Well-designed
products, respectable
brands
• Attractive stores design

13. W EAKNESSES
• Not globally competitive
• Low prices, but not as low
as Wal-Mart or CostCo
• Employees are at entry-
level or at the part-time
level, this causes high
turnover rate
Target

14. WALMART SWOT
ANALYSIS

15. SWOT ANALYSIS
S
TRENGTHS
W
EAKNESSES
O
PPORTUNITIES
T
HREATS
• Great Pricing and
Variety of Product
• Customer loyalty
• Good locations
• Span of Control
• Supplier Problem
• Unreliable Inventory
• More Part time
employee
• Not focused in specific
section
• International Expansion
• Home Delivery
• Local communication
perception
• Green world support
• Competitor like Target
and CostCo
• Employee Unions
Negative
Interna
factors
Externa
factors
Positive

16. • Online Store cannot compete with other
company
– Lose to most online store; Amazon gain $3 billion
and JCpenney gain $324 million while Sam’s club
only gain $135 million
– However, today, it comes to stay in the third place
under Amazon (AMZN). Best Buy (BBY)
Problem

17. • Employees-Employer relationship problem
– Full of part time employees
• Not provide meal and rest break
Problem

18. • Banning of expansion by government in some
places
– These wages and heath case problems lead to
protest of Wal-Mart employee
– Ingle wood, California, Cedar Mill, Oregon, and
Vancouver, Canada
Problem

19. • Lack of community, customers relationship
– Because Wal-Mart relationship with employee
getting worse, cause their employee to treat
customer badly.
• Many customer disappoint and think Wal-Mart just
want their money
Problem

20. • Cannot compete with competitors in middle
to higher income segments
– These customer really care about brand
reputation
– They also want low price flexibility
Problem

21. • These problem lead to
– Decrease in Company image
– Sales growth is not as high as competitors
– Low turnover rate due to the large quantities of
orders
Problem

22. • Create new brand under supervision of Wal-
Mart
• improve customer relationship
• Hire more full-time workers
• Increase expansion internationally
• Improve CSR, such as creating projects for
community
Suggest Solution

23. • improvement on the training programs
• corporate social responsibility
• Advantages and Disadvantages
Our Proposal Plan