Presented By:

Dhananjay KumarJaipuria institute of management, Noida

“ The secret of successful retailing is to give customers what they want… And really if you think about it from your point of view you as a customer want every thing : a wide assortment of good quality, comparatively low price, guaranteed satisfaction, friendly convenient hours, pleasant shopping experience.”

---- SAM WALTON

Introduction

• Founded by Sam Walton In 1962.• The world's largest public corporation by revenue,

according to the 2008 Fortune Global 500.• The largest private employer in the world and the

third-largest utility or commercial employer.• The largest grocery retailer in the United States, with

an estimated 20% of the retail grocery and consumables business.

Products and Services Offered• Family apparel • Automotive

products• Health and beauty

aids• Home furnishings• Electronics • Hardware• Toys • Sporting goods• Lawn and garden

items• Pet supplies• Jewelry• Housewares, etc.

•Vision centers•Health clinics•Fast food restaurants•Hair salons•Portrait studios•one-hour photo centers•Banks•Pharmacies, etc.

Operations Strategy at Wal-Mart

Business MantraWal-Mart operated according to 10 rules :

1. Commit to the business;2. Share the profits with all associates;3. Motivate your partners, vendors, and suppliers;4. Communicate everything about the business to

everyone in the company;5. Appreciate the associates and let them know they

are appreciated;6. Celebrate success;7. Listen to everyone;8. Exceed expectations;9. Control expenses; and10. Swim upstream.

Service Processing at Wal-Mart Retail Stores

Exterior of the retail stores

Customer Support Staffs

Cashier

Security Department

Security support staffs

Staff Trainers

Basket Trolley

Products and

Other interiors

Product display Counters

Selected Products

Payment Counter

Payment Slip

Purchased products

Exit and product withdrawal counters

Get your things (which you brought) submitted, if any

Arrive at Wal-Mart retail store

Submission counter

Customer Support staffs

Get a pulling basket trolley

Go inside the products gallery

Select the products which are needed

Put down the selected products in the basket

Go with the basket trolley to the payment counter

Pay money according to the bill

Get your purchases with you

leave with your purchases and other brought things

Counter staff

Staff management Committee

Finance Department persons

Cost and Selling Price calculating staffs

cashier

Critical Success Factors

Flexibility• Wal-Mart use highly automated handling systems

and carefully coordinate cross-docking to move goods through the system with a minimum of inventory and operate 24 hours a day.

• The distribution network is based on the hub-and-spoke concept with warehouses in the center of a trade area where no store is more than one day's drive from its distribution center.

• Serving this distribution network is one of the largest private fleets in the country.

Dependability “Wal-Mart has an on-time delivery record

well in excess of 99%, and the opinion within the company is that it is not good enough. The only acceptable delivery record is 100% on-time, and if they could get better than 100%.”

Cost

“The focus of Wal-Mart is that cost-cutting can co-exist with a moral center, which operates on the principle that it can be the cheapest place to shop and the best place to work at the same time.”

Cost factor cont……

• A culture based on profit derived, not from the pricing end, but from the cost end of every transaction. The plan, always, has been to drive costs out of the system in the stores, from the manufacturers' profit margins, and from merchandise brokers and other middlemen, all in the service of driving down prices at the retail level.

• Wal-Mart tried to keep constructions costs and rent at a minimum. For that reason, Wal-Mart continued to house several of their early stores in primitive facilities.

Saving a penny in operation is as important as generating a penny from

sales Driving out costs has evolved into seven basic rules of

operation :

• Forming partnerships with vendors • Keeping expenses low • Proper selection of store locations • Company ownership of the distribution fleet • Knowing the numbers (detailed sales figures )• Knowing its own business • Knowing its competition• Taking care of customers

Speed

Sundown Rule Ten feet attitude rule

Quality Of Design•"Every Day Low Price" one-stop family shopping

Annual Membership fee ($35 businesses & $40 individuals)

Offer Groceries, pharmaceuticalsand general merchandise

Quality Of Performance

Customer focused Employees • Aggressive hospitality displayed by

employees• Rules for employees : Customer is always right

Quality Of conformance• Wal-Mart tracks sales system-wide with its own

satellite communication and information system. • Each store has a satellite dish to link data into

the largest single sales database in the world through two earth station transmitters at corporate headquarters. Keeping track of sales and inventory results in a total of 75 million point-of-sale transactions each week.

Service Quality

CUSTOMER SERVICE "Let's be the most friendly – offer a

smile of welcome and assistance to all who do us a favor by entering our stores. Give better service – over and beyond what our customers expect. Exceed your customers' expectations – If you do, they'll come back over and over again.“

– Sam Walton

Three Basic Beliefs

• Company officials say the aim is always to serve the consumer by filling gaps.

1 Respect the Individual Every customer and employee deserves to be treated

with respect and dignity.

2 Service to Our Customers Offer the lowest prices with the best possible service

3 Strive for Excellence Find new and innovative ways to constantly improve

Problematic Issues at

Employees’ Issues

• UNSUSTAINABLE WAGES:

Business Week quoted from a recent report from consumer group for a New Economy, stating that

“Wal-Mart employees earn 20% less than the average U.S. retail worker, and some $10,000 less than what the average two-person family requires to meet its basic needs.”

“Wal-Mart’s profit per associate is $6,400.If they will pay two dollars more per hour to associates, that would cut $4,000 out of our per-employee profit.” 

Shareholders’ Issues

SPYING ON SHAREHOLDERS:• Surveillance of Shareholders on the part of Wal-Mart has

caused investors much concern. According to The Wall Street Journal, Wal-Mart security units were asked to “do some preliminary background work on the potential threat assessment” of those submitting proposals to a shareholder meeting, particularly those whose resolutions the company was trying to block. 

• Wal-Mart eventually apologized to shareholders after the article appeared, particularly for referring to them as potential threats.

Other Issues• Wal-Mart has a poor record of locating stores on

environmentally sensitive sites, especially wetlands. • Wal-Mart received criticism for the construction of a store

near the 2000-year old pyramids of the Teotihuacán Empire.

• WAL-MART STORES INC., WHICH GOT ITS REPUTATION FOR LOW PRICES BY OFFERING BRAND NAME PRODUCTS FOR LESS, IS AGGRESSIVELY EXPANDING ITS PRIVATE LABEL BUSINESS

Examples1: • A lady went to Wal-Mart to buy a thermometer. She

looked around for a reasonable priced thermometer, but the thermometer she saw were priced $44.00 and $99.00. She was searching for the traditional ones that cost $10.00 or so. So She went and asked a Wal-Mart employee. The employee looked at her, and then said, "I don’t know. Have you asked someone from that department?" She kept silent for a few seconds, though I just wanted to scream at her. She calmly said, "Well, if I had found someone from that department, why would I be here asking you?". She got nobody there to ask with so She went to another store in town.

Customers Problems…….

Source: http://goinside.com

Examples2: • In Louisiana there is no selling of liquor on Sundays. • A customer wanted to buy a NON-ALCOHOLIC drink but

the bottle looked like an alcoholic bottle, So Wal-Mart Employees rejected to sell it on Sunday. Then the customer argued with the cashier that the bottle said, "NON-ALCOHOLIC" just only the name of the drink says, "…Beer." But, it was a soft drink. They did not care that on the bottle clearly written, "NON-ALCOHOLIC and rejected to sell it that day.

Source: http://goinside.com