The New Age of Walmart

Did you know?

• At Wal-mart, Americans spend $36 million every hour every day

• This works out to $20,928 profit every minute!

• Wal-Mart is the largest company in the history of the World

• 90% of all American live within 15 miles of a Wal-Mart

• 92% of everything Wal-Mart sells comes from China

Store formats

• Discounts stores (2003)• 3,400 locations of 95,000 feet² discounts stores

• Supercenters (1998)• 185,000 feet² offering over 100,000 items (30% of groceries)

and employing 200-550 employees• Specialty shops (vision centers, photo centers, hair salons,

banks...)

• Sam’s clubs• Warehouse averaging 135,000 feet² which competed with

Costco and BJ’s Warehouse

• Looking for expansion in urban locations or neighborhood markets

Technology deployment

• Strategic use of IT systems is one of Wal-Mart’s operational strength

• Started using bar coding and Electronic Data Interchange (EDI) in 1980’s

• By 2002, required all suppliers to use Retail Link

• E-commerce operations in mid 1990’s

Human capital

• Known for low pay and heavy reliance on part-time and temporary help

• No unions

• Harshly criticized internationally because worked with companies that didn’t respect the Wal-Mart guidelines

• Considered as “The most admired company in the US” by Fortune

Wal-Mart International

• International expansion in early 1990’s

• By 2004, there were:• Over 3,200 outlets in the US• 900 outlets in the Americas• 350 outlets in Europe• 440 outlets in Asia

• Adaptation of store formats depending on space constraints and consumer preferences

Wal-Mart InternationalAcquisitions…

• Mexico: Acquisition of Mexico’s largest retailer, Cifra

• Brazil: Acquisition of Brazil’s leading supermarket chain in Brazil’s northeast region, Bompreco

• UK: Acquisition of Britain’s best value food and clothing superstore, ASDA

• Japan: Acquisition of Seiyu

Partnership…

• Germany: Joined forces with the ALDI Group

• China: Formed partnership with Charoen Pokphand Group

Wal-Mart’s competitors

Wal-Mart Home Depot Target0

50100150200250300

Revenue

Revenue

•2004, Sears fusions with Kmart• 3,500 stores = 3rd largest retailer in the US

after Wal-Mart and Home Depot

How could Wal-Mart continue its growth?

• Continue its international expansion in the more developed African countries (French-speaking North Africa, South Africa, Gabon…)

• Reduce energy costs (fuel usage for transportation)

• Develop in other sectors such as photo services, vacation planning, financial services…

What are the limits to that growth?

• Competition• High competition in low cost retailers

(Germany)• If ever a retail company took the same pricing

strategy as Wal-Mart, sales will drastically decrease…

Did Asia and Europe offer an opportunity for international

market dominance?

Yes…

• UK: Second largest retailer after Tesco

• Starts making money in China

No…

• July 2006: Withdrawal from Germany due to a highly competitive market (stores were given away to Metro)

• Indonesia: Impossible to implant due to the Financial crisis

• Unsuccessful in Japan

How could the company take advantage of its global reach to propel

itself in the years to come

• They could concentrate on e commerce• Follow Amazon’s model

• Massive advertisement on the internet

Wal-Mart in 2010

• Biggest retailer in the world• Close to 8,000 shops worldwide in 15

countries• $401 billion of sales• Employing over 2 million people

• Environmental measures to increase energy efficiency • Reduce greenhouse gases by 25% in 7 years• Reduce energy store usage by 30% in 3 years