WALMARTS ENTRY IN INDIA

7/29/2019 WALMARTS ENTRY IN INDIA

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Dr. Lakshmi Mohan 1

Wal-Mart: An American Original- Agenda

1. A Retrospective on its Growth

2. Innovative Business Model How Did Sam Walton Get These Ideas?

3. Wal-Mart Today: The Challenges Retreat from Germany in 2006 Sluggish Growth in the US Market Clamour at Home: The Price of Becoming Big

4. Wal-Marts Response Global Ambitions Re-thinking One-Size-Fits-All Approach Flexible Workforce


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Dr. Lakshmi Mohan 2

How Wal-Mart Got There- A Retrospective on Its Growth

The Numbers: How Big is Big?

IT: The Driver of the EDLP strategy Management Process

Partnership with Suppliers

Partnership with Employees Obsessive Focus on Costs


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Dr. Lakshmi Mohan 3

Wal-Mart: A Behemoth

1962 : Sam Walton launched his first store Location : Bentonville, a backwater in Arkansas,

a state where chickens outnumber people

Today : Worlds Largest Retailer

Four times as big as #2 Retailer, Carrefour

5,482 stores in 14 countries as of Oct 31, 2005

Revenues: 285B vs GE: $152B Second-largest Company after ExxonMobil ($298B)

Workforce: 1.3 M

Biggest private sector employer in the world


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Dr. Lakshmi Mohan 4

Waltons Business Model was Different

Located stores in small towns since big retailers suchas Kmart and Sears dominated large towns

Kept overhead low

Offered incentives - Profit-sharing for staff

Partnerships for suppliers

Large investment in IT To keep inventory low

Customers got friendly service

AND, Everyday Low Price


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Dr. Lakshmi Mohan 5

Wal-Mart after 40 years .Lord of the Things

Annual 2001 sales: $220 billion Pre-text Profits: $9.3 Million

.. 60% of U. S. Retail Sales

#1 Food Retailer in the U.S.: $56 billion in 2001

.. Opened since 1985 over 1000 massive dept./grocery supercenters,

at 200,000 sq. ft., bigger than 4 football fields

# of employees worldwide: 1.28 million

.. More than the US Postal service ; # in China : 4,000

# of Suppliers : 30,000 .. In every continent but Antarctica

Value of 100 shares bought in 1970 @ $16.50 per share: $11.5 million

Wal-Marts % of P&G's $40 billion in annual sales : 15%

P&G has a 150-strong Bentonville office & Senior EVP dedicated to Wal-Mart

Typical starting hourly wage: $6.50

Source: Business 2.0, March 2002


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Dr. Lakshmi Mohan 6

A Simple But Powerful Idea:

Minimize the Bad I - Inventory

Walton figured out that most of the costs gets addedafterthe product leaves the factory and moves throughthe supply chain:

Mfg. Wholesaler Retailer

20% - 30% of retail price spent on keeping inventory in3 warehouses

Walton eliminated the wholesaler

He instituted JIT inventory practices using real-timeflow of information from a stores sales floors to thesuppliers plants that dictated:

What to produce? When to ship? To which stores?


7/90Dr. Lakshmi Mohan 7

IT is Critical for Wal-MartsEveryday Low Price Strategy

Invested in most of the waves of retail IT systems earlier andmore aggressively than its competitors

- Set industry standards in IT

1969 : Used computers to track store inventory

1980 : Adopted bar codes1985 : Electronic Data Interchange (EDI) with suppliers

Late 80s : Wireless scanning guns

2003 : Mandated its 100 largest suppliers to place RFID (Radio Frequency

Identification) tags on the boxes and pallets shipped to Wal-martstores by January 2005

Focus of IT Investments:Applications that directly enhanced its core value proposition EDLP

and increase sales through micromerchandising



Walton recognized early on that timely information is the key tomaximizing sales and minimizing costs. The better your informationabout whats selling and whats not, store by store, the better youcan avoid the twin perils of retailing

too little inventory or too much

IT: Only Area Where Wal-Mart Outspent Competitors

Very Secretive About Its Information Systems

Custom-designed systems built by employees kept competitorsoff the trail

Hardware and software vendors bound by non-disclosureagreements

In 2001, Wal-Mart summarily announced that it would no longershare sales data with market research vendors like InformationResources Inc and AC Nielsen, since the reports of the vendorsare available to all retailers who subscribe to that service.



Wal-Marts Fetishness About Secrecy- Sued Amazon for Stealing Its Computer Secrets

1997: Amazon Forced to Set Up Distribution Network Because Bertelsmann, the German media giant, went into a joint venture

with Barnes & Noble, one of the two largest book store chains in the US,and launched an online book store to compete with AmazonANDBertelsmann bought the largest book distributor in the US, who wasAmazons Supplier

Amazon Lacked Core Competence in Distribution Recruited 15 current employees of Wal-Mart and its vendors who had

intimate knowledge of Wal-Marts computer systems behind the super-efficient distribution system.

Amazons Stand Were not interested in other peoples trade secrets. Were interested in

hiring the brightest, hardest working, and most talented people whereverthey might be.

Wal-Marts Response Theres a lot of computer talent out there in the Valley. If youre coming to

Bentonville, youre looking for something special.



Sharing Sales Data With Suppliers- Key to Low-Price Leadership

Treat Suppliers as Partners, NOT Adversaries

Implemented a Collaborative Planning, Forecasting andReplenishment (CPFR) Program

JIT Inventory Program Reduced Carrying Costs- for Both Wal-Mart AND Its Suppliers

Wal-Marts Cost of Goods : 5% - 10% Less Than Competitors

CPFR has blurred the lines between Wal-Mart and the Supplier:Youre both working to the same end: To sell as much product aspossible without either of us having too much inventory.

Source: Computerworld, Sept. 30, 2002



Wal-Marts Data Warehouse

Current Level of Storage Capacity : 570 Terabytes * Second only to the U.S. Governments

More than all of the Internets fixed pages

BUT ALL THAT DATA IS USELESS

UNLESS IT IS USED

Information is shared with its own Buyers ANDSuppliers

* Wall Street Journal, Dec 3-4, 2005



Helps to time merchandise deliveries -Its shelves stay stocked, but NOT overstocked

Predict what is going to happen,

instead of waiting for it to happen Example : Analysis of purchases during Hurricane Charley

indicated products to be stocked in Floridas Wal-Martahead of Hurricane Frances that hit a few weeks later

Not just the usual flash-lights, but, for example, strawberryPop-Tarts whose sales rates was 7 times the normal rate.The Pre-Hurricane top-selling item was beer!

Value of the Data Warehouse- Wal-Marts Buyers

Source: New York Times, Nov 14, 2004



Wal-Mart opened its data vault in January 1999 to itssuppliers cements Wal-Marts power over them

Extranet built by Wal-Mart, Retail Link, allows suppliers to

see how their products are selling in different stores andwhich ones need to be replenished.

Vast and detailed data on sales and inventory exceedswhat many manufacturers know about their own

products.

Value of the Data Warehouse- Suppliers

They are very strict with their suppliers, but theygive them the data they need.



All That Data Is Mined!- Doing it since 1990

Analysis of its 90 million shopping cart transactions per week

- To see how the purchases of the different items are related.

- Company can then better identify items to market together.

Obvious examples:- Charcoal and tongs go alongside the barbecue grills

- Tiny baggies next to the pretzel boxes so Mom can pack snacksfor the kids

A not so obvious example!

- Customers who buy Barbie dolls (it sells one every 20 seconds)have a 60% likelihood of buying one of three types of candy bars

Source: Forbes, Sep 5, 1997



Micromerchandising Pays Off

Sales per square foot

0

100

200

300

400

500

2000 2001 2002

Year

Dollars($)

Kmart

Target

Wal-Mart



Wal-Mart Stays Ahead of Competition!

Competitors began to adopt many of Wal-Marts IT innovationsincluding EDI and wireless bar code scanning in earnest in the mid-1990s. Targets vice-chairman acknowledges that his company isthe worlds premier student of Wal-Mart.Still Wal-Marts productivity, measured by real sales per employee,is higher than competitors.

118

133

181

Sears

Kmart

Wal-Mart

87

109

148

Sears

Kmart

Wal-Mart

1995 1999

Sales per employee, $ thousand



The Wal-Mart Effect on Retail

1987:- Wal-Marts Market Share: 9%- But 40% more productive than its competitors

1995:

-Wal-Marts Market Share: 27%

- Productivity advantage widened to 48%

1995-99:

-Competitors reacted by adopting Wal-Marts innovations

- Managed to increase their productivity by 28%- Wal-Mart raised the bar further by increasing its own efficiency

by another 20%

Source: Retail: The Wal-Mart Effect, The McKinseyQuarterly, 2002, No. 1



Wal-Mart Changed Retailing Economics

Company

(Latest 12 months in 1994-95)

Wal-Mart

Circuit City

K-Mart*

Caldor*

Bradlees*Federated Dept. Stores

Selling, General & Admin.

Costs As a % of Sales

15.8%

(19.4% in 1984)19.0%

22.2%

24.4%

29.4%33.3%

*Now in Chapter 11 bankruptcy proceedings

Source: Business Week, Nov 27, 1995



IT Innovation Is NOT Enough

At least half of Wal-Marts productivity edge stems frommanagerial innovations that improve the efficiency of stores andhave nothing to do with IT.

For Example:

Cross-training of employees allows them to functioneffectively in more than one department at a time.

Better training of cashiers and monitoring of utilizationcan increase productivity rates at checkout counters by10% to 20%.



Wal-Marts Management ProcessKey Features

1. Low Wages But Golden Cuffs Started a Profit-Sharing Plan in 1971 for ALL Employees

Based on profit growth, we contribute a % of the employees wages tohis/her plan. The employee can take it in cash or Wal-Mart stock whenthey leave the company.

After nearly 25 years at the company, Shirley Cox, a cashier, still earnedbarely $7.00 an hour. But she retired in her 40s on $250,000 of companystock. the stock is a prevailing theme for everyone at Wal-Mart if youhang around long enough, you can make a fortune on the stock.

2. No class system, thus fending off all attempts at unionization ALL employees are called associates drumming home the notion that

managers and workers are partners

3. Promote from within In 1996, 5,900 workers moved up to management jobs

60% of the 30,000 managers are former hourly workers




4. Empowering of Front-Lines Wal-Mart gives them information at their finger-tips and the freedom to act.

If someone asks me how we manage a $100 billion company, I tell them a stor at a time, and we constantly challenge that unit to make it the best.

5. Keeping Track of Competitors Prices

Later that afternoon, she leaves the store for an hour to compare prices atnearby Kmart and Target stores. She is reimbursed mileage. If a competitorsprices are the same or lower than Wal-Marts, she consults with her supervisor

about cutting her own prices up to 5 %.6. Management will not tolerate shrinkage

Loss, theft and damage of inventory is capped at around 1%Other retailers settle for 3% - 5%


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Dr. Lakshmi Mohan 22


7. Work Ethic, Disdain for Extravaganceand Customer-Centric

Lead by Example: Walton was a model of frugality and modestywho continually warned against complacency and sloth. He drovearound in an aged Ford pickup truck and wore inexpensive clothes.

Wal-Marts corporate offices are cramped, dingy and cheaplyfurnished. Walton believed that executives should spend more timeon the selling floor than behind desks.

To make sure they did, Walton, an avid pilot, assembled a small air-

force that whisked them around the country, visiting Wal-MartsMonday through Friday. On the road, they stayed in budget hotels,and ate at family restaurants.

Every Saturday, at a meeting in corporate headquarters inBentonville, they discussed their findings.


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A Model of Frugality- In Practice

No signs of opulence or ego at the companys headquarters.

Lee Scott, the current CEO, drives a VW beetle and shares ahotel room. John Menzer, head of Wal-Mart International,

sits in a tiny office on the same floor as his staff. Executives take out their own rubbish, pay for their coffee

and are told to bring back pens from conferences !

Another penny-saving practice: call vendors collect !

Expenses on a buying trip should not exceed 1% of the costof the items purchased.


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In the Founders Words

Theres no two ways about it: Im cheap. Wal-Mart neverbought a jet until we hit $40B in sales and expanded as faraway as California and Maine, and even then they had topractically tie me up and hold me down to do it.

A lot of what goes on these days with high-flying companiesand these overpaid CEOs, whore really just looting from thetop and arent watching out for anybody but themselves,really upsets me

Why should we stay so cheap when were a $50+B company:Because we believe in the value of the dollar. We exist toprovide value to our customers, which means that, in additionto quality and service, we have to save them money. Everytime Wal-Mart spends one dollar foolishly, it comes right out

of our customers pockets.


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The Bigger Wal-Mart Gets,The More Essential It Is We Think Small

Waltons Management Principles (circa 1990, 1528 stores) For several decades now weve worked hard at building a company

thats simple and streamlined and takes its directions from thegrassroots. Its a pretty tall order for an outfit that is spreading out allover the country as fast as we can.

At our size today, theres all sorts of pressure to regiment andstandardize and operate as a centrally driven chain.

Id hate to work at a place like that and I worry every single day aboutWal-Mart becoming that way.

Nothing at all profound about any of our principlesin fact, theyre allcommon sense. Most of them can be found in any number of books orarticles on management theory.

But I think the way we have applied them at Wal-Mart has been

just a little bit different.


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Most Important,Think One Store At a Time

That sounds easy enough, but its something weve constantlyhad to stay on top of. Because our sales and earnings keep goingup doesnt mean that were smarter than everyone else, or that wecan make it happen because were so big. What it means is thatour customers are supporting us. We know what we have to do:keep lowering our prices, keep improving our service, and keepmaking things better for the folks who shop in our stores.

That is not something we can simply do in some general way.

It isnt something we can command from the executive officesbecause we want it to happen.

We have to do it store by store, department by department,

customer by customer, associate by associate.


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Store Within A Store:Push Responsibility And AuthorityDown

Toward that department head whos stocking the shelves andtalking to the customer.

What sets us apart is that we train our department heads to be managers oftheir own businesses. In some cases, these businesses are bigger in annual

sales than a lot of our first Wal-Mart stores.This works only because we decided a long time ago to share so muchinformation about the company with our associates, rather than keepeverything secretive.

We let them see all the numbers so they know exactly how they aredoing within the store and within the company. They know theircosts, their markup, their overhead and profit margins. Its a bigresponsibility and a big opportunity.

And, we give them incentives to want to win.


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Sales Review Meetings at Corporate- One Store At A Time

When we sit down at our Saturday morning meetings to talk about our business,we like to spend time focusing on a single store, and how that store is doingagainst a single competitor in that particular market. We talk about what thatstore is doing right and what its doing wrong.

Focus on a Single Store Enables us to improve that store Learn a particular way in which, say, the Panama City Beach Wal-Mart is

outsmarting the competition on beach towels.

Get that information out to all our other beach stores around the country.

I dont know any other large retail company Kmart, Sears, Penneys thatdiscusses their sales at the end of the week in any smaller breakdown than byregion. We talk about individual stores - if were talking about the store inHarrisburg, Illinois, everybody here is expected to know something about thatstore how to measure its performance, whether a 20% increase is good or bad,what the payroll is doing, who the competitors are, and how were doing.


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Keep Your Ear To The Ground

A computer is not and will never be a substitute for getting out inyour stores and learning whats going on.

It can tell you down to the dime what youve sold. But it can never tellyou how much you could have sold.

Thats why we at Wal-Mart are fanatics about our managers and buyers getting

off their chairs here in Bentonville, and getting out into those stores. We have12 airplanesonly one of them is a jet, Im proud to say in our hangars out athe Rogers, Arkansas, airport, and thats why they are there.

We stay in the air to keep our ear to the ground. Our whole travel system is really an outgrowth of the way I managed those 9

stores back in 1960. I would get in my old Tri-Pacer and fly to those storesonce a week to find out what was selling what wasnt, what the competitionwas up to, what kind of job our managers were doing, what the stores werelooking like, what the customers had on their minds. Of course, I havecontinued to visit stores almost constantly ever since, but with almost 2,000

stores today, a lot of other folks have to get in on the act.


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The Real Hands-On, Get-Down-In-The-StoreStuff

Our district managers are doing the job that I did back in 1960.But we also have 18 Regional Managers based here inBentonville. Every Monday morning, they pile into those airplanesand head across the country to the stores in their region.

Its a condition of their employment. They stay out 3 to 4 days, usually

coming back in on Thursday. Weve drummed into their heads that theyshould come back with atleast one idea that will pay for the trip.

Then they gather with the senior management of the company all ofwhom should also have been visiting stores earlier in the week if theyexpect to ask any intelligent questions or know the first thing aboutwhats going on for our Friday morning merchandising meeting.

In addition to the field work, we have computer printouts at themeetings which tell us whats selling and whats not.But the really valuable intelligence that surfaces in these

sessions is what everybody has brought from the stores.


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Bentonville, Arkansas, Does Not Come to the World

- The World Comes to Bentonville!

It Buys the MostCompany % of its total sales to Wal-Mart

Tandy Brands Accessories 39%

Clorox 23%

Revlon 20%

PJR Tobacco 20%

Procter & Gamble 17%

It Sells the Most Products

Company Wal-Marts U.S. market share

Dog Food 36%

Disposable diapers 32%

Photographic film 30%

Toothpaste 26%

Pain remedies 21%

Source: One Nation Under Wal-Mart; Fortune, Feb. 18, 2003


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As the Company Grew,It Exercised Its Muscle on Suppliers

Wal-Mart meets with each Supplier to establish sales goals forthe coming year after review of sales results for past weeks andmonths.

Keeps a Supplier Scorecard Punctuality of deliveries Data-documented problems about meeting orders or returns of

defective products by customers Suppliers not meeting sales targets would face tougher

negotiations in the future from the steely Wal-Mart buyers.

RFID Mandate to Top 100 Suppliers in 2003 In the Horizon: Scan-based Trading Suppliers own each product until it is sold. Wal-Mart will never

take those orders onto its books. Think of the impact of shedding$50B of inventory. The impact will probably be felt by suppliers,

but none are likely to complain. Meta Group Retail Analyst


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Wal-Mart Lives in a World of Supply & Command,Instead of a World of Supply & Demand

An Example: Cross-Docking

Pre-assembled orders for individual stores from asuppliers truck go seamlessly from an unloading dock at

Wal-Marts Distribution Center directly into a truck boundfor stores

Get goods into stores without even unpacking them

let alone allowing them to sit in storage !Until we reached a billion dollars, a lot of suppliers justignored us way out here in the Arkansas Outback.Now, of course, were too big too ignore.


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Vendor-Financed Inventory !

How Cross-Docking Works At Wal-Marts new distribution centers, P&Gs trucks are

unloaded directly to trucks that will head for Wal-Mart Stores.The toothpaste is never even put on warehouse shelves. Once

a truck is full, it heads to the stores.

Products are put on the shelf within 4 hours, and are usuallysold within 24 hours.

Despite this tight delivery schedule, Wal-Mart has 10 days topay P&G.

Benefit of Cross-Docking: Vendor-Financed Inventory

Sell the goods before we have to pay.


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How Wal-Mart Drives a Tough Bargain

Suppliers are shown to the row, a long corridor of drab,windowless cubicles at the Bentonville headquarters, eachadorned with a notice that Wal-Marts buyers do not accept

bribes. Its like a scene from a bazaar: sweaters spill out of suitcases

and haggling over prices continues all day.

We were grapes, but now we are raisins. They suck you dry.

Theres a difference between being tough and beingobnoxious. Every buyer has to be tough, Thats the job.


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How Wal-Mart Drives a Tough Bargain

Buyers are told: Youre not negotiating for Wal-Mart. You arenegotiating for your customer. And your customer deserves thebest price you can get. Dont ever feel sorry for a vendor. He knowswhat he can sell for, and we want his bottom price.

Vendors are told to quote the best price:If they told me its a dollar, I would say, Fine, Ill consider it, butIm going to go to your competitor, and if he says 90 cents, hesgoing to get the business. So make sure a dollar is your best price.

If thats being hard-nosed then we ought to be as hard-nosed as wecan be. You have to be fair and upfront and honest, but you have todrive your bargain because youre dealing for millions and millionsof customers who expect the best price they can get. If you buy thatthing for $1.25, youve just bought somebody elses inefficiency.


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A Telling Example of Wal-Marts Growth- Went Past Toys R Us by 1998

Toys R Us: Largest Toy Retailer in the U.S.--- Value Proposition: Choice, Quality, Reasonable Price

--- Displaced Dept. Stores and small specialist toy retailers

--- 25% share of the market Before Wal-Mart!

Today:Wal-Mart: Largest Toy Retailer:25% market share

--- Toys R Us Share:15% (2003 Sales: $11B)

--- Value Proposition: One better than Toys R Us: Rock-Bottom PRICES

WAL-MART STRENGTHS:

--- Super-efficient supply chain--- Mass retailer, with a broad diverse array of products--- Can afford to use toys as a loss-leader (lose money on toy sales) to lure in

customers who then purchase higher-margin goods- Toys R Us just doesnt have that luxury

Source: Wall Street Journal, August 31, 2004


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41 Years of Nonstop Growth


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Sense & Respond Management Process of

Wal-Mart : Why They are Unbeatable

Disappointing sales on Friday, Nov 26, 2004(the day after Thanksgiving),

Traditionally the biggest shopping day of the year

- Wal-Mart knows it literally at the end of the dayBecause of their state-of-the-art information system


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How did Wal-Mart Management respond to it?

1. Within a couple of hours, Michael Duke, the president ofWal-Mart, had gotten messages on his Blackberry thatsales were off at stores around the country.

2. He brainstormed with execs and store managers aboutwhich products to mark down.

3. A team met over the weekend to finalize the list and

contact suppliers.

4. On Tuesday, stores nationwide offered the new prices.Source: www.fastcompany.com
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How did Wal-Mart Management respond to it?

5. On Thursday, Wal-Mart broadcast a video for its storessuggesting new displays.

6. The next day, the displays were up, and a new ad

campaign was underway.

7. On Saturday, the company conducted a meeting with500 employees asking for more ideas -- and acted on 21of their recommendations.

The result? The retailer expects Decembersales to be up three percent. Alth ugh it's notthe holiday season it had initially hoped for, itrepresents a heck of a comeback.

Source: www.fastcompany.com

W l M t E ti M t
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Wal-Marts Exception Management Driven by IT

At Wal-Mart, problems are referred to asexceptions. We keep watching everythingthat just happened. We are pretty near real-time. We can tell people that they need to godo something, and we are within hours,

depending on the event.

The event may be a trucks failure to drop off orpick up something. It could be the absence ofan important product in the stores backroom

or in the distribution centre that serves thestore. Or, it could be an act of nature like thehurricanes that descended, one after another,on Florida in 2004

Source: New York Times, Nov. 14, 2004


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Walton tells it all in his folksy, conversational style in hisautobiography; Sam Walton: Made in America My Story,Bantam Paperback, June 1993

He died in April 1992, after fighting a two-year battle against aform of bone cancer.

Reflecting on the Wal-Mart Business Model- What Is It Grounded On?

1. Use of IT2. Cost Control3. Partnership with Suppliers4. Partnership with Employees

How did a Small-town Merchant get these Innovative Ideas?


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How did Walton Get IT?

1966 Store #5 was under construction

I knew we had to get better organized than we were.

We had lists of items we were supposed to carry, and wewere dependent on the people in the stores to keeprecords of everything manually this was at a time when

quite a few people were beginning to go intocomputerization.


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How did Walton Get IT?

I had read a lot about that, and I was curious. I madeup my mind I was going to learn something about IBMcomputers.

So I enrolled in an IBM school for retailers inPoughkeepsie, New York. One of the speakers was fromthe National Mass Retailers Institute Abe Marks, Head ofa Discount Retailer in Connecticut.

I visited with Abe a number of times at his New York office,and he was a very open guy. He shared with me how heused computers to control your merchandise.

B t Utili f I f ti


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Best Utilizer of InformationTo Control Absentee Ownerships

Sam knew that you are putting your stores where you, as management, arent.If he wanted to grow, he had to learn to control it.

Need Timely I to Service the Stores- How much merchandise is in the store?- What is selling? What is not?

-What is to be ordered? Marked down?

Key Metric: Inventory Turnover Ratio of Sales to Inventory Higher Inventory Turnover Less Working Capital

The man is a genius. He realized even at the rudimentary level he was on in 1966,operating those few stores that he hadthat he couldnt expand beyond that horizonunless he had the capability to capture this information on paper so that he couldcontrol his operations, no matter where they might be Gave him the ability to openmany stores, and run them well, and be profitable.


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Growth of Wal-Mart Stores

Year # of Stores Sales (million $)1962 11966 51968 131970* 32 311972 51 78

1974 78 1681976 125 3401978 195 6781980 276 1,2001990 1,528 26,000

* Went public on Oct 1, 1970100 shares in 1970 @ $16.50 Nine Two-For-One Stock Splits 51,200 shares in 1990 @ $62.50

Initial Investment of $1,650 in 1970 worth $3M in 1990


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How Did Walton Manage IT?

I knew Id never be any whizbang computer guy myself, so Ihad another reason for going to that school. I was looking tohave a good, bright systems person, and I figured I might findone there.

Thats where I first met Ron Mayer, then the smart young CFOat Duckwall Stores in Abilene, Kansas. I targeted him as theguy we needed at Wal-Mart, and started wooing him right there.

Like so many of them, he wasnt interested just then in movingto Bentonville, Arkansas, to work for somebody he knew nextto nothing about. Later on, we changed his mind He joinedWal-Mart in 1968 as VP for finance and distribution.


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How Did Walton Manage IT?

From Ron Mayers arrival on, we as a company have beenahead of most other retailers in investing in sophisticatedequipment and technology.

The funny thing is: everybody at Wal-Mart knows that I havefought all these technology expenditures as hard as I could.The truth is: I did want it. I knew we needed it, but I just couldntbring myself to say, OK, sure, spend what you need.

I always questioned everything. It was important to me tomake them think that may be the technology wasnt as goodas they thought it was, or may be it wasnt the end-all theypromised it would be.


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Growth of IT in Wal-Mart

1978: Bar Coding & SKU Inventory SystemWhen Jack Shewmaker became our COO in 1978, he worked really hard atgetting me to invest in more and better computer systems, so that we couldtrack sales and inventories across the company, especially in-storetransactions.

1983: Satellite Communication SystemOnce we had those scanners in the stores, we had all this data pouring intoBentonvile over phone lines. Those lines have a limited capacity, so as weadded more and more stores, we had a real logjam of stuff coming in from thefield. I like my numbers as quickly as I can get them. The quicker we get that

information, the quicker we can act on it.The technology did not really exist to do this for a retailer in the early Eighties.But we got together with Macom & Hughes Corporation and worked out acontract Committed $24 M to build it It was not an immediate success.But we got it working. Now, everybody has one - Jack Shewmaker

V l f IT i W l M t


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Value of IT in Wal-Mart- According to Walton

A few years ago, we built this huge building right next to our offices around 135,000 sq. ft. just to house the computers, and everyoneat the time told me how much room wed have to grow. I mean it wasreally empty in there just 2 or 3 years ago. Well, already itscompletely full of computer equipment. And, when I look back, its

no wonder Weve spent almost $700 M building up the computer andsatellite systems we have

Im told its the largest Civilian database in the worldeven bigger than AT&Ts.

None of that matters to me. What I like about it is the kindof information we can pull out of it on a moments notice.

V l f IT i W l M t


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Value of IT in Wal-Mart- According to Walton

We keep a 65-week rolling history of every single item we stock.I can pick anything, say a little combination TV/VCR like I usehere in my office, and tell you exactly how many of them wevebought over the last year and a quarter and exactly how many of

them weve sold. Not only overall, but in every region, everydistrict, every store.

It makes it tough for a vendor to know more about how hisproduct is doing in our stores than we do.

Weve always known that information gives you a certainpower, but the degree to which we can retrieve it in ourcomputer does give us the competitive advantage.

P t hi ith S li


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Partnership with Suppliers- Started with P&G

One day my close friend, George Billingslay, asked me to join himon a canoe trip down the Spring River. He said he was bringingalong an old friend named Lou Pritchett, who was a V.P. with P&Gat the time, and who wanted to meet me and talk about somethings relating to our two companies. So I went along, and it turned

out to be the most productive float trip I ever took with George.During that time on the river, we both decided that the entirerelationship between vendor and retailer was at issue. Bothfocused on the end-user the customer but each did it

independently of the other. No sharing of information, no planningtogether, no systems coordination.

We were simply two giant entities going our separate ways,oblivious to the excess costs created by this obsolete system.

Sh i f I f ti


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Sharing of Information- Key for Win-Win Partnership

We assembled the top ten officers of both the companies inBentonville for two days of soul-searching and thinking.

Within three months, we had created a P&G / Wal-Mart team tobuild a whole new kind of vendor relationship.

We formed a partnership to conduct our business, with one ofthe most important outcomes being that we started sharinginformation by computer.

P&G could monitor Wal-Marts sales and inventory data,

and then use that information to make its own productionand shipping plans more efficiently.

We broke new ground by using IT to manage our businesstogether, instead of just to audit it.


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Employees: Key to Customer Loyalty

The way management treats the associates is exactly how theassociates will then treat the customers.

And if the associates treat the customers well, the customers willretain again

And, THAT IS WHERE THE REAL PROFIT ISSatisfied, loyal, repeat customer are at the heart of Wal-Martsspectacular profit margins, and those customers are loyal to usbecause our associates treat them better than salespeople in

other stores do.

Our relationships with the associates is a partnership in the truestsense. Its the only reason our company has been consistently ableto outperform the competition and even our own expectations.


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Sam Waltons Confession

Now I would love to tell you that this partnership was all part of mymaster plan from the beginning, that as a young man I had samesort of vision of a great retailer company in which all theemployees would be awarded a stake in the business That I saw

them having the opportunity to participate in many of thedecisions that would determine the profitability of that business.

I would love to tell you all that, but unfortunately none of itwould be true!

In the beginning, I was so chintzy I really didnt pay my employeeswell. The managers were fine, but we really didnt do much for theclerks except pay them an hourly wage, and I guess that wage wasas little as we could get by with at the time.

Then Eureka !


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Then, Eureka !- Walton Saw the Light

In the very early days of the business, I was so doggoned competitive,and so determined to do well, that I was blinded to the most basic truth,really the principle that became the foundation of Wal-Marts success

Back then, I was so obsessed with turning in a profit margin of 6% orhigher; and, no matter how you slice it in the retail business, payroll is

one of the most important parts of overhead. Overhead is one of themost crucial things you have to fight to maintain your profit marginThat was true then, and its still true today

The larger truth that I failed to see turned out to be another of these

paradoxeslike the discounters principle of the less you charge, themore you will earn

AND, HERE IT IS: The more you share profits with yourassociates, whether its in salaries or incentives or bonuses orstock discounts the more profit will accrue to the company.

The Idea for Sharing Profits & Benefits


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The Idea for Sharing Profits & Benefits NOT From Me, But From Helen

We were on a trip, and we were talking about the high salary that Sam wasearning, and about all the money and benefits that he was paying the officers ofthe company in order to keep his top people. He explained that the people in thestore didnt get any of those benefits .

I think it was the first time I realized how little the company was doing for

them. I suggested to him that, unless those people were on board, thetop people might not last long either .

I remember it because he didnt really appreciate my point of view then. Lateron, I knew he was thinking about it, and when he bought it, he really bought it.

We didnt include our associates in the initial, managers-only profit sharing

plan when we took the company public in 1970. There was nobody aroundpreaching that philosophy in those days

In 1971, we corrected my big error of the year before, and started a profit-sharing plan for all the associates

Profit-sharing has been the carrot thats kept Wal-Mart headed forward.

One of the Most Successful Bonuses


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One of the Most Successful Bonuses- Our Shrink Incentive Plan

Unaccounted-for inventory loss theft is one of thebiggest enemies of profitability in the retail business.

So, in 1980, we decided the best way to control the

problem was to share with the associates anyprofitability the company gained by reducing shrinkage.

If a store holds shrinkage below the companys goal,every associate in that store gets a bonus that could be

as much as $200. Our shrinkage % is about half the industry average.


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Employees Monitor Shrinkage !

Most associates dont want to think that theyre workingalongside anyone who does enjoy stealing.

So, under a plan like this, where you are directly

rewarded for honesty, theres a real incentive to notignore any customers who might want to walk off withsomething, or, worse, to allow any of your fellowassociates to fall into that trap.

Everybody in that store becomes a partner in trying tostop shrinkage, and when they succeed, they, along withthe company in which they already hold stock, share inthe reward.

Empowering Front-Line Employees


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Empowering Front-Line Employees- Sharing Rather Than Hoarding, Information

The only way they can possibly do their jobs to the best of theirabilities.

Obviously, some of that information flows to the street. But I just believethe value of sharing it with our associates is much greater than anydownside there may be to sharing it with folks on the outside. It doesntseem to have hurt us much so far.

Nowadays, I see management articles about information sharing as anew source of power in corporations. Weve been doing this from thedays when we only had a handful of stores. Weve kept doing it as wehave grown.

Thats why weve spent hundreds of millions of dollars on computers andsatellites to spread all the little details around the company as fast aspossible. But they were worth the cost. Its only because of IT that ourstore managers have a really clear sense of how theyre doing most ofthe time. They get all kinds of information transmitted to them over thesatellite on an amazingly timely basis like, for example, up-to the-minute

sales date that tells them whats selling in their own store.

Obsessive Focus on Costs


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Obsessive Focus on Costs- Control Your Expenses Better Than Your Competition

Every time Wal-Mart spends one dollar foolishly, itcomes out of our customers pockets. Every time we

save them a dollar, that puts us one more stepahead of the competition, which is where we alwaysplan to be. Sam Walton

Fifteen years after his death, frugality is stillingrained in Wal-Marts culture.


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Walton Led By Example

Frugality came naturally to Walton, who was a country boy. Hedrove an old pick-up truck, and flew economy class.

Im not saying every company should necessarily be as chintzy asWal-Mart. Everybodys not in the discount business, consumed by

trying to save every possible dollar for their customers I feel itsupto me as a leader to set an example. Its not fair for me to rideone way and ask everybody else to ride another way, The minuteyou do that, you start building resentment and your whole teamidea begins to strain at the seams.

If American management is going to say to their workers thatwere all in this together, theyre going to have to stop thisfoolishness of paying themselves $3M and $4M bonuses everyyear and riding around everywhere in limos and corporate jets

like theyre so much better than everybody else.

The 2 Percent Formula


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The 2 Percent Formula - For Corporate Overhead Expenses

When we had about 5 stores, I tried to operate on a 2%general office expense structure. I just pulled it out of the air.

Most companies then charged 5% of their sales to run theiroffices. But we have always operated lean. We have had our

people do more than in their companies. It has been ourheritage, our obsession, that we would be more productiveand more efficient than our competition.

We have not changed that basic formula from 5 stores to

2,000 stores. In fact, we are actually operating at a far lower% today in office overhead than we did 30 years ago. And,that includes tremendous expenses for computer supportand distribution center support everything that we supply

centrally in the way of support for the stores.


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Stay Lean, Fight Bureaucracy

A lot of first-time visitors are shocked by our executiveoffices. Most people say my office and those of the otherWal-Mart executives look like something youd find in atruck terminal We sure as heck wont win any interior

decorating awards, but theyre all we need, and they mustbe working fine. Just ask our shareholders.

A lot of bureaucracy is really the product of some empirebuilders ego. Some folks have a tendency to build up big

staffs around them to emphasize their own importance.We dont need any of that at Wal-Mart.

If youre not serving the customer, or supporting thefolks who do, we dont need you.

A PARADOX !


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A PARADOX !Wal-Mart Retreats from Germany in July 2006

Entered Germany in 1997

Bought two struggling German retail chains 95 stores in 1999 Persisted for 8 years before admitting defeat Too afraid to tarnish its image

by pulling out of the worlds third largest economy Fiscal 2006 Sales: $ 2.5 B; Losses: $ 127.5 M Total International Sales: $ 63 B; Global Sales: $ 312 B Struggled from the outset against stiff local competition

Closed 10 of the initial 95 stores Tried German managers, US managers, and a combination of the two.

Sold its 85 stores to Germanys largest retailer, Metro Pre-tax Loss: $ 1 B on the DealSource: Financial Times, July 29-30, 2006

Germanys Discount Retail Market


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Germany s Discount Retail Market- A Tough One to Crack

German shoppers are frugal People in this country only ever look out for one thing PRICE

This trait should have been a boon for Wal-Mart- the guardian of EDLP

But Germany already had a number of homegrowndiscounters

Regulations restrict store hours and other retailing basics Carrefour, Wal-Marts biggest global competitor, operates in

29 countries But has steered clear of Germany

It is clearly a very challenging market for us that wehave not figured out. Wal-Mart CEO, April 2006

German Discounters


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German Discounters- Proved to be A Real Match for Wal-Mart

Power of Privately-held Discounters Aldi & Lidl

Grown their market share to 40% vs. < 2% for Wal-Mart Had discovered the efficiency of drab out-of-town store sites

and economies of scale that made their suppliers sweat Kept costs AND prices low

Underpriced Wal-Mart Sell a limited selection in each store 850 to 1,000 items

vs. 100,000 at Wal-Mart Stock mainly their own brands

80% of German consumers are 20 minutes from an AldiAldi has invaded Wal-Marts home turf

opened more than 700 stores in the U.S.

Source:Asian Wall Street Journal, July 31, 2006

BIG Mistake Made by Wal-Mart


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BIG Mistake Made by Wal-Mart- Exported Its Culture Wholesale

Did NOT Adapt to the German Market Little feel for German shoppers They care more about price than having their bags packed. The German consumer does not like extra service as hes

worried that hell have to pay for it. Bag-packers were reassigned !

Little feel for German staff as well They hid in the toilets to escape the morning Wal-Mart

cheer.

We screwed up in Germany. Our biggest mistake was puttingour name up before we had the service and low prices

- Head of Wal-Mart International, The Economist, Dec 6, 2001


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Germany Was Not The Only Failure

Before Germany, South Korea

Sold its 16 stores in May 2006

Another Problem Child: Japan

Took a stake in the Seiyu store chain over 400 stores in 2002

Faced Problems Similar to Germany

Sluggish domestic consumer market

Challenge of adapting its global strengths to the differentcultural expectations of its Japanese customers

The Japan Expansion


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The Japan Expansion- Seiyu Store Chain Still Hangs Heavily

Took Full Management Control of Seiyu Invested an additional $565M in Dec 2005

Became the majority owner of Seiyu

Ended the uneasy effort to cooperate with the previous

Japanese-led management Dispatched former COO of Wal-Mart International to take

command of the Seiyu operation

Challenges in Japan

Low-cost format is not established in the market Will Japanese consumers respond to its efforts to turn

Seiyu, a conventional Japanese department store, intosomething closer to its discount store model?

Source: The Financial Times, July 29-30, 2006

Maturing US Business


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atu g US us ess- Impacting Wal-Mart Share Price

Sales Growth at Existing Stores Sliding Since the Late 1990s FY06: 3% same-store sales gains vs. 9% in 1999; > 6% for Target

Q2 Profit in FY07 likely to fall 23% despite 14% rise in sales First time in 10 years

Stock Price Down 35% from Peak in Dec 1999 Despite $11B Earnings on $312B Revenue for FY06

10% rise from previous year

US Division: 78% of Total Sales

BIG Challenge in the US Market

Cant rely solely on building hundreds of new stores each yearto perpetuate growth

Must find ways to generate more sales at existing US storesSource: Wall Street Journal, Sept 7, 2006 & Economic Times, Aug 15, 2006

The Price of Becoming a Behemoth


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g- A Rash of Lawsuits & Negative Publicity

Its Giant Stores: Symbols of Big Retail Blamed for the destruction of entire communities

Eliminates jobs when it moves into a new community

Drives down retail wages in that community since Wal-Martslow price forces other businesses to lower their prices and

hence their wages. Companys Pursuit of Low Prices

Crushes Kmarts and mom-and-pops alike

Decline in U.S. manufacturing jobs as both Wal-Mart & itsVendors turn to cheaper overseas sources

Class Action Suit for Sex-Discrimination

6 women filed a suit in 2001 alleging that Wal-Mart doesnt fairlypay & promote women

Federal judge ruled in 2004 that the suit could proceed as a

class action covering 1.6M current and former female employees

Is There Such a Thing as


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gToo Much Information?

Wal-Marts Unusually Detail-Rich Human-ResourcesDatabase

Contains data on

Performance reviews

Seniority & Time Spent with the Company

Which Store ?

Judge Has Allowed Use of the Database

To compare whether men and women working in the samestore were paid differently

Whether women were fairly promoted compared to men


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Wal-Mart CEO Rebuts Critics

We used to believe you could run the company out of Bentonville, and if youtook care of your business, employees and customers, everyone would leaveus alone.

What were trying to do now is reach out. Where were wrong, we change, soour detractors dont have a foothold in attacking us. Where were right, we willfight and take each issue to the wall.

Impact of LawsuitsSam Walton believed that there were only two types of employees he wouldntgive a second chance tothose who abused people and those who stole We have 1.5 million employees, including every kind of person known to

man racists, sexists, etc. If someone made a negative racial comment in thepast, instead of dealing with it severely, we might have transferred him. In todays world, he has to go. The number of people not doing the right thing is a small %. But it is unfairwhen that number is seen as representative of a wider institutional pattern.

Source: Wall Street Journal, Oct 6, 2004


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Response to Charges of Discrimination

Started companywide computer postings of managementopenings

Hired a Director of Diversity Executive managers bonuses based on diversity targets

CEO personally stands to forfeit $600K of his bonus if thecompany falls short of company goals

CEO is also getting out more, meeting with investors,community groups and the media

Playing the role of the Companys public defender and explainer To avoid future growth being constrained by political barriers,Wal-Mart will have to raise its head from Bentonville,and worry more about how it is perceived


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Response to Charges of Low Wages

The United Food & Commercial Workers union has beensuccessful in creating in peoples minds the perception that wepay inadequate wages & benefits.

I like the free-enterprise system in this country Two-thirds of our managers are promoted from the ranks of

hourly employees.

Over 75% of our workers are full-time.

We paid $2B last year in health benefits.

We pay more than our Competitors.

We opened a store in Phoenix recently and 5,000 peopleapplied for 500 openings.


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Driving Out Competitors

I get irritated as sin when I read that we historically sell ourtoys at a loss

We have a phenomenal toy business,

and our profits are exceptionally good. Its one of the highest margin businesses.

We say we sell for less, which means, if a competitors

prices are lower, we will drop our prices, even if it meansbelow our cost.

Unpopularity is Hard forl i d d


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Wal-Marts Executives to Understand

After all, EDLP has been good for consumers Criticism Leveled Against Wal-Mart: To benefit your customers, you drive down prices as low as possible.

But doesnt that encourage manufacturers to move jobs overseas,which puts some of your customers out of work, so they cant afford to

buy as much at Wal-Mart. Isnt that a vicious circle and does that reallybenefit America ?

CEOs Response: We have a history of working with companies like P&G, Kellogg,

PepsiCo to drive out unnecessary costs inventory buildup, packaging

expensesfrom the business and pass the savings onto the customer. Say we do business with a certain manufacturer and give them all the

shelf space for their products. And other retailers are sourcing a similaritem overseas and offering greater value. Ultimately, the customer willmake the decision. Manufacturers are putting themselves at risk.

W l M Gl b l A bi i


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Wal-Marts Global Ambitions

International Revenues: 20% of Total Sales in FY06 Fastest-growing business segment

Focused on Asia & Latin America Bought a stake in Central Americas largest retailer in late 2005

gained a majority stake in March 2006 60 retail outlets & 30,000 employees in China

We have plans to open 20 new stores in China this year. Exit from South Korea & Germany in 2006

Put it farther from its target of getting a third of its sales and profit growthoverseas

Fallen behind Carrefour in expanding globally

will operate in 11 countries outside the U.S., vs. 29 Carrefor Deepened its India Focus in 2006

Set up a liaism office in Bangalore to undertake its Indian market research The Indian market is much less competitive than Germany and Korea, and its

middle class is hungry for modern retailing prices and products sold byWestern retailers like Wal-Mart

Source: Economic Times, August 14, 2006

Wal-Mart Opens Doors to UnionsI Chi A t 2006


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- In China: August 2006

After years of fighting unionization efforts at its stores in the U.S., Wal-Mart decided to allow unions in China after years of pressure from theAll China Federation of Trade Unions

Unionization is required under Chinese law.

Wal-Mart Supports Chinas Efforts to Build a Harmonious Society. Company Announcement

Will collaborate with the All China Federation because the two groups had themutual aim to establish grassroots unions

Unions in China do not have the history of bargaining power that unions inEurope and the U.S. have

The function of Chinese unions is to urge workers to participate in the work,care about their welfare, and to organize recreational activities for them.

Statement from the All China Federation:

If Wal-Mart union members are subjected to unfair treatment at work, unionsat the national, provincial, city and district level will strive all out to protectemployees legitimate rights.

To Boost Sales, Wal-Mart DropsO Si Fit All A h


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One-Size-Fits-All Approach

Break Its 3,400 U.S. Stores into 6 Different Models Affluent Shoppers, African-Americans, Empty-Nesters, Hispanics,

Suburbanite & Rural Residents

Wal-Mart is all things to all people.By offering customers all the same things, you end up under-serving everyone

because you dont have an offering that is specific to that customer segment. CEO of U.S. stores and architect of the new approach.

Huge shift for a Company that grew on the strength of standardization

Test Run of Localization Theory in Mexico

Six Different formats with different merchandise mixto better target different income levels

The Bodega stores catered to low-income customers with basic breads,while the Superama stores lured the affluent with rich deserts andfancier display cases

Sales per sq.ft rose by 10%

Address Specific Customer Segments With a


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g

Precison That Better Meets Their Needs & Wants

Segmentation of U.S. Market based on ethnicity and lifestyle inaddition to income

New Store in Plano, Texas: Affluent Shoppers

3,000 different items targeting the well-heeled About 3% of the approx. 100,000 items in an average Wal-Martsupercenter

Twice the number of organic products

Expanded the wine section with 1,000 bottles,at prices ranging from $4 to $500

Removed the Gun Department

Expanded the Home-Fitness Equipment area

H th C t V i !


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Hears the Customers Voice !

Interviewed 50 women in North Dallas

Complained how cluttered Wal-Mart store seems

Made changes, large and small

Welcome instead of Entrance over the front stores Aisles are at least a foot wider than at the typical Wal-Mart

Special displays of products that normally mark Wal-Marts main aisleshave been removed

Research showed that after about 8 ft., shoppers eyes glaze over andthey stop noticing what is on a shelf

Designed shelves that jut out with a rounded edge where special itemsare displayed.

Another Example: New Store


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In Largely White Suburb of Chicago

Determined that Shoppers would be Predominantly African-American from nearby Chicago

Study of the area showed it had a high number of premature births

Store stocked up on clothes and baby-bottle nipples geared forpreemies Both have been strong sellers

Doubled the amount of cosmetics for African-American women

Increased the gospel, rhythm and blues, and hip-hop music sectionto 92 ft., almost 4 times the size at an average Wal-mart

This Wal-Mart has stuff for all your needs- the right music, make up, baby things. A 19-year-old African-American shopper,

who is holding a friends baby.

Source: Wall Street Journal, Sept 7, 2006

Localization Strategy Entailed


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Shaking Up the Management Structure

Beefed up its Marketing Dept., adding Ph.D.s in areas suchas ethnology, food science, and research and evaluation Segmented its shoppers using census data and customer

feedback, among other things, into demographic groups.

Moved 27 Regional GMs from Bentonville to the Regions By reading the newspapers, watching the TV stations and

being part of the community, I have a better flavour forwhats going on. Regional GM for 132 stores in Illinois,who moved to a Chicago suburb.

Gave Local Store Managers More Say in What Products toCarry Added new field staff responsible for following trends in

fashion, food and consumer electronics

First Venture Into Interactive Consumer-Generated Advertising


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g- To Reach Out to Fashion-Conscious Youth Consumers

Back-to-school Season Marketing Campaign in July 2006 The Hub-School My Way, jointly sponsored by Sony and put

together by a unit of Omnicon, the worlds biggest marketing agency.

An online competition inviting high school students To check out what styles are on the horizon,

and to express your style Create your own web pages and videos Winners to be used in a Wal-Mart cable television commercial,

possibly also for cinema release.

We are just scratching the surface. Instead of a small number of adagency executives creating the best ads, millions of people will becontributing to creating the best ads a huge change that will reallyenhance brand advertising. Chief Executive of ViTrue, which provides marketers with the technology

to create interactive advertising.

Source: The Financial Times, July 21, 2006

Back to Basics for Wal-MartA Fl ibl W kf


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- A Flexible Workforce

A New Plan for Manning Stores:Employees Work Schedule Tailored to the Demands of CustomerShopping Habits To improve the bottom-line

Despite the risk of more bad PR on worker issues

Something to cheer its loudest critics now, the investors

Invested in Software-Generated Workforce Optimization Meet heavy shopping hours with more help Scale down during slower periods, generally weekday afternoons

Shorter lines at the register mean more happy customers who aremore likely to return

More important to the business than a cashier, unhappy aboutspreading her work week over 4 days instead of 3, who quits and

does not return

Will It W k ?


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Will It Work ?

Piloted in 39 Stores Roll-out to All U.S. Locations by end-2007 Our surveys indicate that customers had a better shopping

experience.

Affects 1M workers

Already Drawing Union Wrath But, of course, that is nothing new.

The United Food & Commercial Workers already devote 10 pages oftheir Web site to Wal-Mart bashing, so whats one more

Two other major chains, Target & Lowes, have already rolled outsuch a plan in the U.S.

But, when youre the biggest player on the block, everythingyou do will draw reaction.

Source: Times of India, Jan 9, 2007

At th E d f th D


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At the End of the Day

Few doubt that Wal-Mart has both the patience and theresources to stay on top.

Never underestimate them. They foster an image as country

hicks. It makes the kill more of a surprise. A Retail AnalystCertainly, Wal-Mart has made mistakes, but it has also gotmore things right than its rivals, who mistake its small-townsimplicity for naivety at their peril.

Just because we are simple doesnt mean we areunintelligent. Wal-Mart CEO

Source: The Economist Dec 6 2001

WALMARTS ENTRY IN INDIA

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