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Outline
History Overview - Vision, Mission and Goals Interna & External Analysis -Value Chain -SWOT & Pestel Analysis -5 Forces Model -Main Competitors Internationalization -Driving Forces -Entry decisions -Examples of success and failure Suggestions
History Overview
1962: Walten Brothers opened fist Walmart in Arkansas 1970: Walmart became public 1990: 1st National retailer 1991: International Expansion 1993: Creation of Great Value 2003: Largest corporation in the world 2012: 50th Anniversary
Goal:
Vision: 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.
Customer Target
Wal-Mart's targeted demographic:
Modest incomes Shoppers interested in prices
Inbound logistics
Operations
Outbound logistics
Service
Support Activities
Firms infrasctructure: Human resources:
- Based on Interaction practices between company and employees -Low pay but other benefits (health care plans, retirement plans, or promotion opportunities) -2.2 million associates globally. -Every time we open a supercenter, we provide roughly 300 jobs -Women57% of our U.S. workforce, 27% of corporate officers, and 20% of our Board of directors. close connection between headquarter and local stores.
Techonology development: It is the key factor of the company. It constitutes a competitive advantage against
competitors. - Computer-based technology POS (Point of sales) system Satellite System
Procurement:
-Wal-Mart deals directly with manufacturers, by passing all intermediaries. - EDI : Electronic data interchange
Primary Activities
Inbound Logistics
-VMI system (Vendor managed inventory) continuous replenishment -EDI (Electronic Data Interchange
Operations
3 business segments: a)WalMart stores Super centers Discount centers Neighborhood markets b) SAMS Club
Outbound Logistics
-Hub and spoke distribution system. - CROSS DOCKING: logistic technique to make the distribution process more efficient
Service
-accepting returned goods -Satisfaction guarantee - Opening hours(24/7)
c)WalMart international
Business Formats
1) Walmart Stores
Walmart Discount Stores 629 in the US Walmart Supercenter: Walmart Discount Stores + Full Service Supermarket. 3,029 in the US. Walmart Market: Previously branded as Walmart Neighborhood Market. 199 in the US.
Walmart in the US
Distribution Channels
Saturation Strategy The company owns a fleet of more than 3,000 trucks and 12,000 trailers. The Wal-Mart Way Cross Docking.
Integrated technology of supply chain Ability to generate large sales volume Superior logistics system
Yes No Yes
Yes No Yes
Operation decentralization
Strong culture Human resources (management team and employee autonomy)
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Helpful
INTERNAL FACTORS STRENGTHS
Diversity in products & services Convenient prices & locations Strong market presence Customer loyalty Strong financial performance Cost and pricing advantages over rivals Good supply chain
SW
Harmful
WEAKNESSES Brand image-weak reputation Low global presence Behind rivals in ecommerce
EXTERNAL FACTORS
Global Expansion: new geographic areas Increasing online sales Strategic alliances Acquiring rival firms
OPPORTUNITIES
Intense Competition Laws and Regulations: Trade policy Cultural barriers Current economy Slow market growth Transport of distinctive comptency THREATS
PESTEL Analysis
Political: Policies on economy, trading agreements (NAFTA) . Economical: Unemployment Rate, slightly increase in consumption. Socio Cultural: Faster pace of live- Efficiency is key. Technological: Use of IT technologies. Online shopping. Environmental: Recycling, Contamination issues. Legal: More laws and more complex.
4.
I. II. III.
Main Competitors
Retailer Industry: Target
I. II. III. IV. Target is the main competitor of Walmart ranked #33 in the Fortune 500. Target offers very similar products. Target went abroad in January 2011. I.
Mission: to Make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences.
IV. V.
Allowed to achieve a large scale and an efficient supply chain. Has its own low-cost brands, like Great Value. A unique cost structure that allows Walmart to establish the lowest prices and achieve competitive advantage. (best value/price combination ) Present in many different industries and markets with efficient distribution channels. Very difficult strategy to imitate by offering a broad quantity of products at a low price.
Internationalization
Internationalization
Reasons for expanding abroad Risks International Strategy Success Key issues
High investment
Entry Decisions
Important decisions any company needs to face when going international:
What markets to enter, when and what size. What strategy to follow. What mode of entry.
Walmart International
Inter national
Low
Multi domestic
High
Local Responsiveness
2011
Canada
One of the most successful international expansion Acquired Woolco Stores and changed structure
South Korea
Very demanding customers Did not customized to market Big companies also fail in South Korea
Every Day Low Prices Superior logistics systems Decentralized operations A strong and unique culture (in U.S.)
Suggestions
Worldwide learning:
Advantages of interconnected economies.
Adaptation:
To locally customize processes and services