Group-1 Ateet K Gaurav-05 Gaurav Jain-14 Sweksha Lal-51 Ravi Kiran-41

1. Group-1 Ateet K Gaurav-05 Gaurav Jain-14 Sweksha Lal-51 Ravi Kiran-41

2. Wal-Mart Is the Largest and Fastest Growing Discount Department Store WAL-MART: INTRODUCTION • 2011 revenues totaled $418.9 billion: • Wal-Mart International achieved a milestone by surpassing the $100 billion net sales mark for the year. • Operating profit increased to $25.5 billion, 6.5% higher than 2010. • Wal-Mart is so large that its revenues are almost 50% more than its 5 closest competitors combined, including Target (TGT) and Sears Holdings (SHLD). • First discount department store chain to expand internationally • First Market Share Loss in Decade • The world’s largest retailer had grown its share of the U.S. consumer market annually during the previous 10 years, from 9.3 percent in 2000 to 13.9 percent in 2009 • In 2010, market share fell to 13.4 percent according to Credit Suisse • Wal-Mart grows through volume and market share gains rather than margin expansions. Source: Annual report 2011

3. Spread of Wal*Mart in USA Source: Wikipedia

4. Where Wal-Mart is good at? Superior logistics system with the support of IT Efficient SCM Just in time inventory control Radio Frequency Identification(RFID)

5. http://www.authorstream.com/Presentation/akmohideen-193472-wal-mart-case-study-education-ppt-powerpoint/http://www.authorstream.com/Presentation/akmohideen-193472-wal-mart-case-study-education-ppt-powerpoint/

6. The Traditional Supply Chain Includes Inefficient and Unnecessary Steps Distribution Warehouse Individual Store Retailer Order Order Order Receive Select Pack Select Tag/ Label Storage Sell Storage Wholesaler Order Select Pack Receive Manufacturer (Supplier) Make Pack Shipper Ship Ship Ship http://www.authorstream.com/Presentation/akmohideen-193472-wal-mart-case-study-education-ppt-powerpoint/

7. Wal-Mart Simplified Its Supply Chain Distribution Center Individual Store Retailer POS Order Receive Select Pack Ship Receive Storage Sell <48 hours <48 hours Wholesaler Deliver within 72 hours of order Manufacturer (Supplier) Make Select Tag/ Label Pack Shipper Ship • Cross-docking in distribution centers results in product flow from inbound to outbound shipping docks within 48 hours.

8. JIT • Lowers holding cost • Lowers ordering cost • Reduces lead time • Better quality • Better inventory management • Cross-docking

9. RFID • Radio frequency identification • Keep tracks of goods at any point of time, and also tells you where it is • Eliminates physical count of inventory • As soon as inventory level goes down, Wal-Mart can reorder

10. Why RFID? • Reduces the possibility of inventory shrinkage and out of stock situation • Improve fulfillment rates • Improve the customer service • Reduce the inventory and labour cost • Eliminate many manual process and improve the operation efficiency

11. Effective Operation Management Strong Supplier Relationships Economies of Sales: “Best Deals” Stable LowerPrices Predictable Sale Patterns Decreased Chance of Out-of-Stock Effective IT Systems Reduced Cost of Sale Increased Sales and Profits Effective Distribution Systems In-Depth Knowledge of Customer/ Market Empowered Employees http://www.authorstream.com/Presentation/akmohideen-193472-wal-mart-case-study-education-ppt-powerpoint/

12. Balance Sheet Source: Forbes.com

13. Financial Trend Source: own

14. Observations High fixed assets 59.9% of total assets • High opportunity cost • Quick and diversified expansion possible inventory 20.1% of total assets • Similar to other players • Inventory loss is low due to cross docking system Accounts payable is very high as against accounts receivable the supplier credit is very high as against buyer credit offered A negative working capital represents that the cash in the organizations is generated rapidly Decrease in equity Buyback of shares program was started in 2011 due to which the retained earnings also decreased Source: own

15. Competitors • Power of competitors is moderate to low • Price elasticity of demand is high • Firm can adjust prices quickly • Cost leadership generic strategy • Low operating costs • Low inventory • Low inbound logistics cost • Low advertising costs • Competitors copying their productivity methods • USA • Kmart • Target (TGT) • Dollar Store • ShopKo • Europe • Carrefour • Metro • Tesco • India • Big Bazaar Potential Entrant Suppliers Competitors Customers Substitutes WALMART Five Force Analysis

16. Potential Entrant • They have distribution channels • Access to raw materials • Allocate favorable locations • Barriers to entry • Economies of scale • Supply Chain Management • Brand Recognition • Variety of product offering • Threat of new entrants is very low Potential Entrant Suppliers Competitors Customers Substitutes WALMART Five Force Analysis

17. Suppliers • Power of suppliers is very low for WalMart • Many suppliers • Includes Domestic and International manufacturers • Not allowing any single supplier to have more than 2.4% of its purchases • Key Suppliers • Procter & Gamble • GE • Wrangler Potential Entrant Suppliers Competitors Customers Substitutes WALMART Five Force Analysis

18. Customers • Buyers’ hold a good deal of power in the US Retailer industry • Low switching cost • Consumer can shop at a competitor who offers comparable products at comparable prices Potential Entrant Suppliers Competitors Customers Substitutes WALMART Five Force Analysis

19. Substitutes • Specialized Retail Shops like garments store • E-commerce challenging its price leadership • Wal-Mart offered free shipping for online orders • Power of substitute is Moderate to low • Specialty Shops • Fancy stores • Food Bazaars Potential Entrant Suppliers Competitors Customers Substitutes WALMART Five Force Analysis

20. Indian Retail Landscape Source: Wikipedia

21. Key Factors:

22. Key Challenges:

23. Key Opportunities

24. Thank you