Post on 24-Nov-2014
1
Wal-Mart vs AholdWal-Mart vs Ahold
Mirjana UzelacNeda Kovacevic
Mónica Pérez
Corporate IntelligenceUnited Business Institute December 2003
2
HistoryHistory Ahold1887 Albert Heijn takes over his father’s
small Zaandam grocery store1911 First Albert Heijn brand name
products sold1948 Ahold on Amsterdam stock
exchange1973 Founding Ahold N.V. for
international growth1977 In U.S. for the first time1987 Queen Beatrix awards Ahold
“ROYAL”1990 Goes to Czechoslovakia1992 Portugal1995 New distribution system: store
delivery in 18h1996 Singapore, Thailand, China,
Spain, Poland2000 Acquired U.S. Foodservice2003 Big financial scandal
Wal-Mart1962 Company founded with opening of
first Wal-Mart store in Rogers, Ark.1972 Listed on New York Stock
Exchange1979 Wal-Mart reaches $1 billion in sales1983 First SAM'S CLUB opened1987 Wal-Mart Satellite Network
completed1988 First Supercenter opened 1990 Wal-Mart becomes nation's No. 1
retailer1991 International market entered:
Mexico1995 Argentina and Brazil1996 China in a joint-venture1997 Wal-Mart No. 1 employer in the U.
S.1998 Germany, Korea in a joint venture 1999 Largest private employer in the
world1999 United Kingdom
3
Getting Ahold of ThingsGetting Ahold of Things
The fraud was simplicity itself. Food manufacturers frequently pay a fee to supermarket operators to encourage them to buy in bulk and then to promote the products to the ultimate consumers. These promotional allowances typically are a function of the volume purchased. The company then aggressively accounted for these promotional allowances, but did not have the volume to justify their recognition. Prematurely and incorrectly recognizing these promotional allowances of course increased their profits for some 500 million euros.
4
Competitive Fact SheetCompetitive Fact Sheet
Wal-Mart Ahold
Mission/Vision
To give ordinary folk the chance to buy the same thing as rich people.
Serve the needs of our customers by integrating a close-knit family of world-class food retail and foodservice operations that make the whole of our company worth more than the sum of its parts
Strategy
1. Respect for the individual
2. High standards of service
3. Constant strive for excellence Low prices, In-stock positions,
Customer service
1. Re-engineer food retail
2. Recover U.S. Foodservice
3. Reinforce accountability, controls and corporate governance
4. Restoring Ahold’s financial help
Activities
1. Food retail
2. Non-Food retail
3. On-line food retailer
1. Food retail
2. Food distribution (U.S. Food service)
3. Liquor, beauty care stores
4. On-line food retailer
5
Wal-Mart vs AholdWal-Mart vs Ahold
Wal-Mart Ahold
2002 Sales (mil) $244,524 $59,267
1-Year Sales Growth 12% -1%
Grocery Sales (%) 34 84
Domestic Sales (%) 84 15
Foreign Sales (%) 16 85
2002 Employees 1,383,000 270,739
1-Year Employee Growth
1.2% (15.5%)
6
Wal-Mart presence in Wal-Mart presence in EuropeEurope
7
Wal-Mart Subsidiaries in Wal-Mart Subsidiaries in EUEU
UK250 stores
Asda, Wal-Mart
Germany95 storesWal-Mart
8
Ahold Ahold PPresence in resence in EuropeEurope
9
Ahold Subsidiaries in Ahold Subsidiaries in EUEU
Netherlands2,333 stores
Albert Heijn, Etos, De Tuinen, Jasmin,
Gall&Gall, C1000, Ter Huurne
Norway1,104 stores
Rimi, ICA, Maxi
Denmark12 stores
ISO
Sweden1,846 stores
Rimi, ICA, Maxi
Estonia3 stores
Rimi
Latvia26 stores
Rimi, Maxi
Lithuania
38 storesRimi, Eko
Poland165 stores
Albert, Mega,
Hypernova
Czech Republic203 stores
Albert, Hypernova
Slovakia2 stores
HypernovaSpain
623 storesSupersol, HiperDino, Netto, HiperSol, Cash
Diplc
Portugal198 storesPingo Doce, Feira Nova
10
Sector Trends for next 5 Sector Trends for next 5 yearsyears
Diversification Globalization Strong Retailers Technology
11
Sector Trend: Sector Trend: DiversificationDiversification
The maturity of the food market has led supermarkets to look for new opportunities:
non-food1
discount format1
e-commerce2
expansion abroad2
12
But almost all have ignored the rise of wholesale food and drink trade
However, it is the most interesing retail sector : percentage of consumption of food and drink in places
other than homes has risen compared to the total consumption:
demographic change: increase in the proportion of older, wealthier people in the population
higher wholesale margins Wholesale demand from the food service segment
increases by 4% to 5% a year across Europe, compared with growth in retail demand of 1% to 2%.
1995 2000 2005 2025
32% 35% 38% 50%
Sector Trend: Sector Trend: DiversificationDiversification22
13
Wal-Mart Ahold
1. Non-food
Tire & Lube Express, Wal-Mart Optical, Wal-Mart Pharmacy, Wal-Mart Vacations, Wal-Mart's Used Fixture Auctions
Ethos, Gall & Gall
2. Discount format
Wal-Mart Stores, Bodega, Todo Día
RIMI, Netto, Balaio
3. E-commerce WalMart.com Peopod, ICA
4. Wholesale Sam’s Club Deli XL, Shuitema
5. Expansion abroad
12 international locations
27 international locations
Sector Trend: Sector Trend: DiversificationDiversification
14
Sector Sector TTrend: rend: globalizationglobalization33
The consolidation and internationalisation of the food retail can be expected to continue.
4 or 5 large retail organizations will operate on a worldwide scale,
a number of dominant regional and national retailers will exist,
the traditional small supermarket is approaching the end of its lifecycle.
0
10
20
30
40
1991 1994 2000 2005
Market Share of top 5 Retailers in the EU (Carrefour, Metro, Tesco, Rewe, Intermarché)Source: Lebensmittel-Zeitung 2002
15
IGD Global Retail IndexIGD Global Retail Index11
Rank GRI
Rank by Turnove
rCompany Global Status
1 2 Carrefour Leading Global Retailers2 3 Ahold
3 1 Wal-Mart
4 5 Metro Leading International Retailers (nearly global)
5 7 Tesco
6 8 Ito Yokado (inc. 7 Eleven)
7 20 Casino
8 17 Auchan
9 21 Delhaize
10 13 Aldi
11 10 Costco
12 18 Tengelmann (inc. A&P)Source: IGD Research - Date published 04/02/03
16
Competitive Competitive PositioningPositioning11
The IGD 'European Retail Index' gives a more accurate ranking of the region's top 30 retailers than those rankings traditionally based on turnover size alone.
0
20
40
60
80
100
0 10 20 30 40Nº of Countries
IGD
Euro
pean R
eta
il I
ndex Carrefour
AuchanTescoAhold
ReweWal-MartMetroLidl & SchwarzAldiITM
CasinoLeclerc
17
Future Market FocusFuture Market Focus11
Countries Wal-Mart AholdChina Italy
Russia
Japan Hungary
India
United States Poland
Canada France
United Kingdom Germany
18
Sector Sector TTrend: Strong rend: Strong RetailersRetailers
The power of the retail sector will grow: retailers are expected to rule the food chain in the coming five years.3
Retailers are trying to present themselves as a strong brand, but only a few will succeed.3
19
2003 Global Most 2003 Global Most AdmiredAdmired
Rank Company1 Wal-Mart Stores
2 General Electric
3 Microsoft
4 Dell Computer
5 Johnson & Johnson
6 Berkshire Hathaway
7 Procter & Gamble
8 IBM
9 Coca-Cola
10 FedEx
Source: Fortune
20
Wal-Mart SubsidiariesWal-Mart Subsidiaries
EuropeWal-Mart
Germany Wal-Mart UKASDA
AsiaWal-Mart Korea Wal-Mart ChinaSAM’S Club The Seiyu
AmericasWal-Mart ArgentinaWal-Mart Brazil Wal-Mart Canada Wal-Mart de MexicoWal-Mart Puerto RicoSAM’S ClubSupermercados
AmigoTodo DiaBodega
21
Ahold SubsidiariesAhold Subsidiaries
EuropeAhold Polska Ahold Czech
Republic Ahold Slovakia Ahold
Supermercados Albert Heijn Schuitema Etos Gall & Gall Deli XL ICA AB Jerónimo Martins
AsiaTopsTops Market Place
AmericasStop & Shop Giant-Landover Giant-Carlisle Tops BI-LO Bruno’s U.S. Foodservice PeapodLa Fragua CSUCARHCO BompreçoG. BarbosaDisco
22
Sector Trend: Sector Trend: TechnologyTechnology
Cooperation will become increasingly important1: between manufacturers and retailers to improve the quality,
velocity and dynamics within the chain, between stores to share best practices.
Technology strength will be a critical success factor for retailers and manufacturers3
23
Technology Based Technology Based IntelligenceIntelligence
Wal-Mart Wal-Mart Satellite
Network (largest private satellite communication system in the U.S.)
radio-frequency-identification (RFID) tags—chips
Ahold Sales Information
System RS/6000 ® SP™ servers
24
Wal-Mart: SWOT Wal-Mart: SWOT AnalysisAnalysis
Strengths Scale Home market strong position Technological pionneers Focus on discount
Weaknesses International presence and
profits Low penetration in EU Lack of international
experience
Opportunities Growing supercenter format Product diversification (food) New markets (EU, Asia) E-commerce
Threats Too large too manage Internationalisation costs Union opposition Not present in large
communities
25
Ahold: SWOT AnalysisAhold: SWOT Analysis
Strengths International experience Non-food, discount format,
wholsale, e-commerce Strong domestic presence Ability to integrate acquisitions
Weaknesses No global brand Not in EU key markets (FR,
GB, D) Loss of investors confidance Scale vs Wal-Mart
Opportunities Diversification of format Diversification of products Acquisition of major EU
retailers Presence increase in Asia
Threats Risk of joint-venture failure Strengthening Euro,
weakening dollar Too complicated to manage Wal-Mart position in the US
26
27
SourcesSources
1) IGD Research, www.igd.com 2) The McKinsey Quarterly 3) Cap Gemini Ernst & Young, “The Changing
Face of the Worldwide Food Industry” 4) Tansaş, “Presentation of Food Retail Sector”,
www.tansas.com 5) www.hoovers.com