WAL•MART Brief History

Wal-mart was found in 1962, and expand to 25 store in 1967. 66 Stores in 1970. 3800 stores in 2005

“save people money, so they can live better”

“Each Wal-Mart store shouldreflect the values of itscustomers and support thevision they hold for theircommunity.”- Sam Walton

• environment violations, • child labor law violation, • and having a poor working conditions for the

workers.

Lawsuit problem and Complains

• Wal-Mart store– Walmart.com– Supercenters format (142,000), Discount stores format and

Neighborhood Format (29000 products)

• Sam’s Club• Wal-Mart international

Segmentation

• Sam’s son succeed him.• International growth increases by 33.6%, and

domestic by 11%.• geographically, according to ACNielsen, Wal-

Mart is the dominant store in the south, and in midsize and small town market

• Wal-Mart is accounted for 20 percents of dry grocery, 29 non-food grocery, 30 health and beauty aid, and 45 general merchandise.

Sales, Growth, and Expansion

• Potential competitor– New retailer.– barrier to entry as cost leader and also good

distribution system where it can get its merchandise at a very cheap cost.

• Rivalry among firms– Amazon on internet based purchase.– faced strong core competitor which are Sears,

Target, Kmart and Costco.

Walmart: Porter’s Five Forces

• Bargaining power from consumers– Minimal

• Bargaining power from suppliers– Wal-Mart itself that has power over its suppliers– Faced some bargaining power from bigger firm, eg.

Coca-cola• Substitute product– hard find any place that sell any merchandise

Wal-Mart has one sale cheaper than Wal-Mart– Wal-Mart’s E-commerce offer consumer an even

better bargain to its product due to its reduce cost, given that it would have to find a place to sell that product, having sold it on line.

• This section will focus on 2 major competitors• Currently, Wal-Mart stock prices is at around

$71.36 which is a major improvement• CostCo which sometimes are condisered the

‘anti Wal-Mart.’• Target which is perceived as Wal-Mart for

Competitive Analysts

CostCo.S TRENGTHS

• 598 warehouses and growing• Consistent same store sales• 3rd place as the biggest retailer in U.S.• Recent record breaking opening days sales internationally (Korea, Japan)• Only slightly overvalued by about 10%• Strong free cash flow (FCF) generation• High Revenue Growth• Outperform SAMCLUB (warehouse business)• Competitive price which can compete with Wal-Mart• Loyal customer due to high renewal rate• Limited products, cheap prices

Year FCF

2011 $1.91 billion

2010 $1.73 billion

2009 $0.84 billion

W EAKNESSES

• Competition in price lowers margins (but can be offset by revenue from membership)

• Lower selection of goods• No-frills policy• Low quality controls

CostCo.

TargetS TRENGTHS

• Popularity is more appealing as it is viewed as the upper market

• High quality control• Well-designed products,

respectable brands• Attractive stores design

W EAKNESSES

• Not globally competitive• Low prices, but not as low

as Wal-Mart or CostCo• Employees are at entry-

level or at the part-time level, this causes high turnover rate

Target

WALMART SWOT ANALYSIS

SWOT ANALYSIS

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• Great Pricing and Variety of Product

• Customer loyalty• Good locations

• Span of Control• Supplier Problem• Unreliable Inventory• More Part time

employee• Not focused in

specific section

• International Expansion

• Home Delivery• Local communication

perception• Green world support

• Competitor like Target and CostCo

• Employee Unions

Negative

Internal factors

Externalfactors

Positive

• Online Store cannot compete with other company– Lose to most online store; Amazon gain $3 billion

and JCpenney gain $324 million while Sam’s club only gain $135 million

– However, today, it comes to stay in the third place under Amazon (AMZN). Best Buy (BBY)

Problem

• Employees-Employer relationship problem– Full of part time employees • Not provide meal and rest break

Problem

• Banning of expansion by government in some places– These wages and heath case problems lead to

protest of Wal-Mart employee – Ingle wood, California, Cedar Mill, Oregon, and

Vancouver, Canada

Problem

• Lack of community, customers relationship– Because Wal-Mart relationship with employee

getting worse, cause their employee to treat customer badly.• Many customer disappoint and think Wal-Mart just

want their money

Problem

• Cannot compete with competitors in middle to higher income segments– These customer really care about brand

reputation– They also want low price flexibility

Problem

• These problem lead to – Decrease in Company image– Sales growth is not as high as competitors– Low turnover rate due to the large quantities of

orders

Problem

• Create new brand under supervision of Wal-Mart

• improve customer relationship• Hire more full-time workers• Increase expansion internationally• Improve CSR, such as creating projects for

community

Suggest Solution

• improvement on the training programs • corporate social responsibility• Advantages and Disadvantages

Our Proposal Plan