WAL MART-2005

Case study

Introduction of walmart
As wal mart entered in 2005 it stood as the largest company in the in the world. The company boasted nearly $260 billion dollars in sale. Managed over 5000 stores in 10 countries. Employed over 1.5 million people world wide. Over 100 million customers visited wal mart stores each week.

 Competition remained vigorous with direct competitors TARGET and COSTCO (fighting for discount merchandise). Home Depot dominating in home renovation materials. Best Buy and circuit city capturing share in consumer electronics.

Wal Mart priorities

Store Formats Technology deployment Human capital

Store Formats
By 2003 discount store average 9500 sq ft. 34000 locations had been rolled out across US. In 1998, super centers were introduced which were averaging 185000 sq ft, employing between 200 and 550 employs and offering g over 100,000 items, which comprises of mainly grocery products. Sams club averaging 135000 sq ft competing directly with COSTCO and BJs warehouse.

2500

2000

1500

DOMESTIC WALMART DISCOUNT STORE DOMESTIC SUPERCENTERS SAM'S CLUB NEIGHBORHOOD MARKETS

1000

INTERNATIONAL UNITS

500

0 1998 1999 2000 2001 2002 2003 2004

Technology deployment
In 1980s walmart had use bar coding and electronic data interchange (EDI) tools to share information within the stores across the stores, and with suppliers. In early 1990s walmart used EDI for forecasting, planning, replenishing and shipping application. By 2002, all the suppliers of walmart were told to use RETAIL LINK, a $4billion system that enable managers to study point-of-sale data and product inventory. In 2004-2005, Wal mart introduced next generation technology of radio frequency identification (RFID)

Human capital
The original wal mart vision was to embrace employees as associates. It encouraged employees to analyze sales data to find ways to improve store performance. But over time walmart became known for low pay and heavy reliance on part time and temporary help. It reduced its expenses regarding benefit packages and health care coverage.

WAL MART INTERNATIONAL

In the early 90s wal mart expanded into a number of foreign markets. By 2004 Wal mart had 3200 locations in US, 900 locations in America (excluding US), 350 location in Europe, 440 locations in Asia.

AMERICA
In 1991, Walt mart entered Mexico in a joint venture with CIFRA (countrys largest retailers). In 1997, Wal Mart acquired a major position in CIFRA. In Feb 2000 the name changed to Walmart DE Mexico. By 2004 Wal mart was Mexicos largest retailers, with 671 units with annual sales of US$10.6 billion. 105000 associates across Mexico.

700 600 500 400 300 200 100 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS PUERTO RICO MEXICO

TOTAL NO. OF SAM's CLUB

GDP($)

NO. OF ASSOCIATES

PUERTO RICO MEXICO

PUERTO RICO MEXICO

Canada
In 1994, wal mart entered Canada. With 122 WOOLCO stores. By 2004, 235 discount department stores and 6SAMs CLUBS were there. 60000 associates were employed. Was the largest retailer in Canada.

CANADA
250 200 150 CANADA 100 50 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB

Argentina and Brazil

Wal Mart started its operations in august 1995 with SAMs CLUBs. 2004- 11 supercenters and 1 distribution centers Company employed- 4000 associates. BRAZIL- faced stiff competition from the french company CARREFOUR. To over come this Walmart introduced a hybrid store( neighborhood market with Mexican style grocery store) In march 2004 Walmart had a retail chain in northeastern Brazil with 118 units, announced the acquisition of BOMPRECO(leading supermarket and Hyper market chain in N.E. Brazil.

160 140 120 100 80 60 40 20 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS ARGENTINA BRAZIL

TOTAL NO. OF SAM's CLUB

NO. OF ASSOCIATES

GDP($)

ARGENTINA BRAZIL

ARGENTINA BRAZIL

Europe
Wal Mart entered UK and Germany. ASDA became part of Wal Mart family- July 26 1999. In 2005- 256 ASDA stores, 7 GEORGE(apparel store)and 21 depots across UK. 134000-employees In 2001 Wal mart over took Marks & spencers as a leading retailers of childrens wear.

EUROPE
300 250 200 150 100 50 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB EUROPE

Germany
Company joined with the aldi group, acquired 21 wertkauf hyper markets in jan 1998. 74 units of inters par hyper market chain. Walmart remodeled the Stores and was operating 92 super centers in germany(2004) More than 30000 associates.

GERMANY
100
90 80 70 60 50 40

GERMANY

30
20 10 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB

ASIA
Wal mart initial effort to enter Indonesia failed due to riot during the Asian financial crises in late 90s. Wal mart entered south-korea-july 1998(acquisition and conversion of 4 MAKRO stores) In 2004- 3000 associates, 16 super centers. Kangnam store in SEOUL-july 1999(first new construction Project)

south korea
16 14 12 10 8 6 4 2 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB south korea

CHINA
Walmart entered with a partnership Thai based charoen Pokphand group. Its partnership fell apart. Aug 1996- first supercenter and SAMs CLUB in Shenzhen. 2004- 34 supercenters, 3 SAMs CLUB, 2 neighbour hood markets and more than 20000 associates. Nov 2004- the company bowed to government pressure to allow Chinese workers to unionize.

china
45 40 35 30 25 20 15 10 5 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB china

Japan
Walmart decided to invest in a large retailerSEIYU. Initially Wal mart decided to start with a 6% stake- dec 2002, which would take it to 37% ownership. Wal mart decided to work with SEIYU brand because it was well known and trusted in the japan market and only 15% Japanese consumers knew about Wal mart.

japan
400 350 300 250 200 150

japan

100
50 0 TOTAL NO. OF STORES TOTAL NO. OF SUPERCENTERS TOTAL NO. OF SAM's CLUB

EXHIBIT 3 AND 4
PERFORMANCE
300000

FINANCIAL STATEMENT
NETSALES
300000

250000

250000

200000 INTERNATIONAL SEGMENT 150000 SAM's CLUB SEGMENT

200000

150000 NETSALES

100000

WALMART STORES SEGMENT 100000

50000

50000

0 2002 2003 2004

0
2002 2003 2004 2004 (NINE MONTHS ENDED OCTOBER 31)

Wal Mart Competitors

TARGET: $50 Billion Home Depot:$65 billion November 2004 SEARS merged with KMART which would operate 3500 stores in US