Presented By:

Dhananjay Kumar
Jaipuria 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 •Vision centers
• Automotive
products •Health clinics
• Health and beauty •Fast food restaurants
aids •Hair salons
• Home furnishings
•
•Portrait studios
Electronics
• Hardware •one-hour photo centers
• Toys •Banks
• Sporting goods •Pharmacies, etc.
• Lawn and garden
items
• Pet supplies
• Jewelry
• Housewares, etc.
Operations Strategy at Wal-Mart
 Business Mantra
Wal-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; and
10. Swim upstream.
Service Processing at Wal-Mart Retail Stores

Exterior Submission Basket Products Product Selected Payment Payment Purchased Exit and
of the counter Trolley and display Products Slip products product
Counter
retail Other Counters withdrawal
stores interiors counters

Arrive at Get your Get a Go inside Select Put down Go with the Pay money Get your leave with
things pulling the products the the basket according purchases your
Wal-Mart
(which you basket gallery products selected trolley to the to the bill with you purchases
retail store brought) payment and other
trolley which are products in
submitted, if counter brought
any needed the basket things

Customer
Counter staff Customer cashier Cashier Security
Support
Support staffs support
Staffs
staffs

Staff
Finance
management
Department
Committee
persons

Staff
Cost and
Trainers Security
Selling Price
Department
calculating
staffs
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

Offer Groceries, pharmaceuticals ($35 businesses & $40
and general merchandise individuals)
 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
 Customers Problems…….
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.
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