The Wal Mart Story749
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The WAL- MART story
By : Mahavir Jain M.B.A (MKTG.)2005-2007 Faculty of Management Studies Udaipur (Rajasthan )
Structure of the presentation WAL- MART – some facts Accolades and recognition How they did it WAL-MART in India –the Bharti Wal-Mart deal The Competition Do we have to fear WAL-MART. The future of mom and pop stores Will WAL-MART be a success.
Founded in 1962 by Mr.Sam Walton First store opened in Bentonville,Arkansas Today 6600 stores worldwide in countries like Honduras,Japan,Mexico,Nicaragua,Puertorico,Argentina,Brazil, Canada,China,Costa-rica,El-salvadore,Guatemala and the U.K. 1.3 million people working Sales for 2006 estimated to be $ 1billion per day.
YEAR - 2001 Fortune co.named Wal-Mart as the 3rd most admired company of America. The Financial Times and Pricewater house coopers ranked it as the 8th most admired company in the world. YEAR - 2002 Rated as the no.1 company on the fortune 500 list. Presented with the Ron brown award for corparate leadership.
What it takes to be a “WAL-MART ” The Winning strategy- selling branded
products at low cost.
Non dependence on any single vendor.
Reliablity on its own distribution system.
Intensive People focus “Associates”
and NOT employees.
Various schemes and programmes for associates : Incentive bonuses A discount stock purchase plan Promotion from within Pay raise based on performance and not seniority. An open door policy Introduced profit sharing in 1971.
M A
R G IN
ROLE OF TECHNOLOGY Implemented a satellite net work system.
Process like ordering ,shipping ,communications and logistics were automated.
Store level data sales were collected ,analyzed and transmitted electronically on a real time basis.
On November.27 2006,bharti enterprises and WALMART entered into joint venture of equal partnership to function in the ‘cash and carry’ format. By Aug.2007 - first store in India.
Negotiations with potential customers Market surveys are on.
M A
Recruitment
R G IN
Present status :
Bharti In the market with old players like Pantaloons,Rahejas and RPG and new players like Reliance ,Aditya Birla group. Partnering with Wal-Mart will give other players a run for their money.
R G IN
WAL-MART
M A
Partnering with bharti will give Wal Mart access to the 8th largest retail market in the world valued at $320 billion.
Advantage bharti Huge ground network in the country already through its telecom business Knows the Indian landscape and understands the demographics in this country.
M A
R G IN
Knowledge of where to get the real estate for the business.
Advantage Wal-Mart Companies innovative information technology .
R G IN
Highly efficient service channel management which makes it possible to buy directly from the producers. M A
Company has tremendous sourcing efficiencies which will bring economies of scale from day one.
The M competition A R K E T P L A Y E R S
RELIANCE It will operate hypermarkets,convenience and speciality stores as well as business to business operations ,sell food ,clothing ,electronic consumer durables,luxury goods and financial and travel services.
INFINITY RETAIL
M A
PANTALOONS
R G IN
The Tata group has partnered with Wool Worths ,for servicing and technical support .It opened the first store in Mumbai in Oct.2006.
BIG BAZAAR are rapidly expanding and are planning to open 100 stores by dec.07
DON’T FEAR INDIA !
Fear of Wal-Mart NO,NO WAL –Mart is not invincible Last year it has to fled from Germany and South Korea
Had to sell all 16 stores.
M A
In South korea –
R G IN
In Germany it lost $863 million (rs.4056 cr.)and sold all its 85 stores to Metro.
Reasons Local German stores Aldi and Lidl –able to deliver good quality grocery at affordable prices.
M A
R G IN
Opened all stores in suburbs –customers were very reluctant to drive that far.
Unable to understand the customer insights well
India is not America…. India is one country, but a hundred different markets.
India has 3 times more people then America Population density 11 times that of America.
M A
Geographical challenges :
R G IN
28 States, 7 Union Territories, 14 different official languages, hundreds of dialects, multiple ethnicities, cultures and habits….
Look at China … The country has nearly 200 stores owned by Wal Mart ,Tesco and Carrefour yet domestic retailers are strong.
The big Indian plans…
M A
In 5 years than Wal –Mart has opened in 44 years .
R G IN
Reliance intends opening more stores (around 6,000)
Advantage retail BOOST EMPLOYMENT America has more Wal –Mart employees then high school teachers. In China – employing 150,000 people in next 5 Years. CREATION OF WEALTH
R G IN
They pay producers more and charge consumers less.
other goods and services.
M A
Resulting savings generate employment when they are spent on
Future of mom and pop stores Kirana stores offers services that are unmatched by organized retailers. Credit Personal suggestions
Home delivery
The U.S.P
M A
R G IN
Good relationships.
Their instant response to changing consumer needs.
WILL WAL-MART SUCCEED IN INDIA ??? IT WILL SUCCEED BECAUSE : It has the best know how to provide the right set products to the right set of customers.
M A
shopping.
R G IN
Customers are also hungry for new ways of
SOURCE :
M A
R G IN
BUSINESS TODAY RETAILER ECONOMIC TIMES THE WAL –MART WAY : DON SODERQUIST
M A
R G IN
By : Mahavir Jain M.B.A (MKTG.)2005-2007 Faculty of Management Studies Udaipur (Rajasthan )
Structure of the presentation WAL- MART – some facts Accolades and recognition How they did it WAL-MART in India –the Bharti Wal-Mart deal The Competition Do we have to fear WAL-MART. The future of mom and pop stores Will WAL-MART be a success.
Founded in 1962 by Mr.Sam Walton First store opened in Bentonville,Arkansas Today 6600 stores worldwide in countries like Honduras,Japan,Mexico,Nicaragua,Puertorico,Argentina,Brazil, Canada,China,Costa-rica,El-salvadore,Guatemala and the U.K. 1.3 million people working Sales for 2006 estimated to be $ 1billion per day.
YEAR - 2001 Fortune co.named Wal-Mart as the 3rd most admired company of America. The Financial Times and Pricewater house coopers ranked it as the 8th most admired company in the world. YEAR - 2002 Rated as the no.1 company on the fortune 500 list. Presented with the Ron brown award for corparate leadership.
What it takes to be a “WAL-MART ” The Winning strategy- selling branded
products at low cost.
Non dependence on any single vendor.
Reliablity on its own distribution system.
Intensive People focus “Associates”
and NOT employees.
Various schemes and programmes for associates : Incentive bonuses A discount stock purchase plan Promotion from within Pay raise based on performance and not seniority. An open door policy Introduced profit sharing in 1971.
M A
R G IN
ROLE OF TECHNOLOGY Implemented a satellite net work system.
Process like ordering ,shipping ,communications and logistics were automated.
Store level data sales were collected ,analyzed and transmitted electronically on a real time basis.
On November.27 2006,bharti enterprises and WALMART entered into joint venture of equal partnership to function in the ‘cash and carry’ format. By Aug.2007 - first store in India.
Negotiations with potential customers Market surveys are on.
M A
Recruitment
R G IN
Present status :
Bharti In the market with old players like Pantaloons,Rahejas and RPG and new players like Reliance ,Aditya Birla group. Partnering with Wal-Mart will give other players a run for their money.
R G IN
WAL-MART
M A
Partnering with bharti will give Wal Mart access to the 8th largest retail market in the world valued at $320 billion.
Advantage bharti Huge ground network in the country already through its telecom business Knows the Indian landscape and understands the demographics in this country.
M A
R G IN
Knowledge of where to get the real estate for the business.
Advantage Wal-Mart Companies innovative information technology .
R G IN
Highly efficient service channel management which makes it possible to buy directly from the producers. M A
Company has tremendous sourcing efficiencies which will bring economies of scale from day one.
The M competition A R K E T P L A Y E R S
RELIANCE It will operate hypermarkets,convenience and speciality stores as well as business to business operations ,sell food ,clothing ,electronic consumer durables,luxury goods and financial and travel services.
INFINITY RETAIL
M A
PANTALOONS
R G IN
The Tata group has partnered with Wool Worths ,for servicing and technical support .It opened the first store in Mumbai in Oct.2006.
BIG BAZAAR are rapidly expanding and are planning to open 100 stores by dec.07
DON’T FEAR INDIA !
Fear of Wal-Mart NO,NO WAL –Mart is not invincible Last year it has to fled from Germany and South Korea
Had to sell all 16 stores.
M A
In South korea –
R G IN
In Germany it lost $863 million (rs.4056 cr.)and sold all its 85 stores to Metro.
Reasons Local German stores Aldi and Lidl –able to deliver good quality grocery at affordable prices.
M A
R G IN
Opened all stores in suburbs –customers were very reluctant to drive that far.
Unable to understand the customer insights well
India is not America…. India is one country, but a hundred different markets.
India has 3 times more people then America Population density 11 times that of America.
M A
Geographical challenges :
R G IN
28 States, 7 Union Territories, 14 different official languages, hundreds of dialects, multiple ethnicities, cultures and habits….
Look at China … The country has nearly 200 stores owned by Wal Mart ,Tesco and Carrefour yet domestic retailers are strong.
The big Indian plans…
M A
In 5 years than Wal –Mart has opened in 44 years .
R G IN
Reliance intends opening more stores (around 6,000)
Advantage retail BOOST EMPLOYMENT America has more Wal –Mart employees then high school teachers. In China – employing 150,000 people in next 5 Years. CREATION OF WEALTH
R G IN
They pay producers more and charge consumers less.
other goods and services.
M A
Resulting savings generate employment when they are spent on
Future of mom and pop stores Kirana stores offers services that are unmatched by organized retailers. Credit Personal suggestions
Home delivery
The U.S.P
M A
R G IN
Good relationships.
Their instant response to changing consumer needs.
WILL WAL-MART SUCCEED IN INDIA ??? IT WILL SUCCEED BECAUSE : It has the best know how to provide the right set products to the right set of customers.
M A
shopping.
R G IN
Customers are also hungry for new ways of
SOURCE :
M A
R G IN
BUSINESS TODAY RETAILER ECONOMIC TIMES THE WAL –MART WAY : DON SODERQUIST
M A
R G IN
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