WAL MART-2005Case study

Introduction of walmart

• As wal mart entered in 2005 it stood as the largest company in the in the world.

• The company boasted nearly $260 billion dollars in sale.

• Managed over 5000 stores in 10 countries.• Employed over 1.5 million people world wide.• Over 100 million customers visited wal mart

stores each week.

• Competition remained vigorous with direct competitors TARGET and COSTCO (fighting for discount merchandise).

• Home Depot dominating in home renovation materials.

• Best Buy and circuit city capturing share in consumer electronics.

Wal Mart priorities

• Store Formats• Technology deployment• Human capital

Store Formats

• By 2003 discount store average 9500 sq ft.• 34000 locations had been rolled out across US.• In 1998, super centers were introduced which

were averaging 185000 sq ft, employing between 200 and 550 employs and offering g over 100,000 items, which comprises of mainly grocery products.

• Sams club averaging 135000 sq ft competing directly with COSTCO and BJ’s warehouse.

1998 1999 2000 2001 2002 2003 20040

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2500

DOMESTIC WALMART DISCOUNT STOREDOMESTIC SUPERCENTERSSAM'S CLUBNEIGHBORHOOD MARKETSINTERNATIONAL UNITS

Technology deployment• In 1980’s walmart had use bar coding and electronic

data interchange (EDI) tools to share information within the stores across the stores, and with suppliers.

• In early 1990’s walmart used EDI for forecasting, planning, replenishing and shipping application.

• By 2002, all the suppliers of walmart were told to use RETAIL LINK, a $4billion system that enable managers to study point-of-sale data and product inventory.

• In 2004-2005, Wal mart introduced next generation technology of radio frequency identification (RFID)

Human capital

• The original wal mart vision was to embrace employees as associates.

• It encouraged employees to analyze sales data to find ways to improve store performance.

• But over time walmart became known for low pay and heavy reliance on part time and temporary help.

• It reduced its expenses regarding benefit packages and health care coverage.

WAL MART INTERNATIONAL

• In the early 90’s wal mart expanded into a number of foreign markets.

• By 2004 Wal mart had 3200 locations in US, 900 locations in America (excluding US), 350 location in Europe, 440 locations in Asia.

AMERICA

• In 1991, Walt mart entered Mexico in a joint venture with CIFRA (country’s largest retailers).

• In 1997, Wal Mart acquired a major position in CIFRA.

• In Feb 2000 the name changed to Walmart DE Mexico.

• By 2004 Wal mart was Mexico’s largest retailers, with 671 units with annual sales of US$10.6 billion.

• 105000 associates across Mexico.

TOTAL NO. OF STORES TOTAL NO. OF

SUPERCENTERS TOTAL NO. OF SAM's CLUB

0

100

200

300

400

500

600

700

PUERTO RICOMEXICO

GDP($)

PUERTO RICOMEXICO

NO. OF ASSOCIATES

PUERTO RICOMEXICO

Canada

• In 1994, wal mart entered Canada.• With 122 WOOLCO stores.• By 2004, 235 discount department stores and

6SAM’s CLUBS were there.• 60000 associates were employed.• Was the largest retailer in Canada.

TOTA

L NO. O

F STO

RES

TOTA

L NO. O

F SUPER

CENTE

RS

TOTA

L NO. O

F SAM's C

LUB

0

50

100

150

200

250

CANADA

CANADA

Argentina and Brazil• Wal Mart started its operations in august 1995 with SAM’s

CLUB’s.• 2004- 11 supercenters and 1 distribution centers• Company employed- 4000 associates.• BRAZIL- faced stiff competition from the french company

CARREFOUR. • To over come this Walmart introduced a hybrid

store( neighborhood market with Mexican style grocery store)• In march 2004 Walmart had a retail chain in northeastern Brazil

with 118 units, announced the acquisition of BOMPRECO(leading supermarket and Hyper market chain in N.E. Brazil.

NO. OF ASSOCIATES

ARGENTINABRAZIL

GDP($)

ARGENTINABRAZIL

TOTAL NO. OF STORES TOTAL NO. OF

SUPERCENTERS TOTAL NO. OF SAM's CLUB

0

20

40

60

80

100

120

140

160

ARGENTINABRAZIL

Europe

• Wal Mart entered UK and Germany.• ASDA became part of Wal Mart family- July

26 1999.• In 2005- 256 ASDA stores, 7 GEORGE(apparel

store)and 21 depots across UK.• 134000-employees• In 2001 Wal mart over took Marks &

spencers as a leading retailers of children’s wear.

TOTA

L NO. O

F STO

RES

TOTA

L NO. O

F SUPER

CENTE

RS

TOTA

L NO. O

F SAM's C

LUB

050

100150200250300

EUROPE

EUROPE

Germany

• Company joined with the aldi group, acquired 21 wertkauf hyper markets in jan 1998.

• 74 units of inters par hyper market chain.• Walmart remodeled the Stores and was

operating 92 super centers in germany(2004)• More than 30000 associates.

TOTA

L NO. O

F STO

RES

TOTA

L NO. O

F SUPER

CENTE

RS

TOTA

L NO. O

F SAM's C

LUB

0102030405060708090

100

GERMANY

GERMANY

ASIA

• Wal mart initial effort to enter Indonesia failed due to riot during the Asian financial crises in late 90’s.

• Wal mart entered south-korea-july 1998(acquisition and conversion of 4 MAKRO stores)

• In 2004- 3000 associates, 16 super centers.• Kangnam store in SEOUL-july 1999(first new

construction Project)

TOTA

L NO. O

F STO

RES

TOTA

L NO. O

F SUPER

CENTE

RS

TOTA

L NO. O

F SAM's C

LUB

02468

10121416

south korea

south korea

CHINA

• Walmart entered with a partnership Thai based charoen Pokphand group.

• Its partnership fell apart.• Aug 1996- first supercenter and SAM’s CLUB in

Shenzhen.• 2004- 34 supercenters, 3 SAM’s CLUB, 2 neighbour

hood markets and more than 20000 associates.• Nov 2004- the company bowed to government

pressure to allow Chinese workers to unionize.

TOTA

L NO. O

F STO

RES

TOTA

L NO. O

F SUPER

CENTE

RS

TOTA

L NO. O

F SAM's C

LUB

0

10

20

30

40

china

china

Japan

• Walmart decided to invest in a large retailer- SEIYU.

• Initially Wal mart decided to start with a 6% stake- dec 2002, which would take it to 37% ownership.

• Wal mart decided to work with SEIYU brand because it was well known and trusted in the japan market and only 15% Japanese consumers knew about Wal mart.

TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB0

50

100

150

200

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400

japan

japan

EXHIBIT 3 AND 4

PERFORMANCE FINANCIAL STATEMENT

2002 2003 20040

50000

100000

150000

200000

250000

300000

INTERNATIONAL SEGMENTSAM's CLUB SEGMENTWALMART STORES SEGMENT

20022003

2004

2004 (NINE M

ONTHS E

NDED OCTO

BER 31)

0

50000

100000

150000

200000

250000

300000

NETSALES

NETSALES

Wal Mart Competitors

• TARGET: $50 Billion• Home Depot:$65 billion• November 2004 SEARS merged with KMART

which would operate 3500 stores in US