By: Megan Dow, Kristin Belanger, and Angèle Bourgoin

1. By: Megan Dow, Kristin Belanger, and Angèle Bourgoin

2. Overview of WAL-Mart History Stocks Stock Information The Divisions BCG Their Mission and Vision Statement New Mission and Vision Statement External Opportunities and Threats CPM EFE Internal Strengths and Weaknesses IFE Analysis SWOT Matrix SPACE IE Matrix Grand Strategy Matrix Key Ratios Different Strategies QSPM Decisions EPS/EBIT Analysis Implementation Evaluation Update! References Questions? Overview of WAL-MART Presentation

3. Overview of Wal-Mart • There are 4 different segments • Wal-Mart Stores- sales amounted to 64.3% • Discount Stores- 1,568 U.S • Supercenters- 1,258 U.S • Neighborhood Markets- 49 stores U.S • Sam’s Club- sales amounted to 13.0% • 525 stores U.S • Is a member only, cash and carry operations • International- sales amounted to 16.7% • Discount stores- 942 Sam’s Clubs- 71 • Supercenters- 238 Neighborhood Market- 37 • Other- amounted to 6.1% • McLane is the nation’s largest distributor of food and merchandise to convenience stores

4. In 1945 Sam Walton opened the first Ben Franklin franchise in Newport Arkansas and operated them with his wife, Helen and brother, Bud. These were small chains that were very successful. In November of 1962 Wal-Mart was opened. Wasn’t until mid 1970’s that Wal-Mart began to grow. 1st IPO in 1970. Then 100 shares were worth $1,650 dollars and now the same 100 shares are worth more than $6 million dollars. In 1999 named #1 stock on the Dow. History of Wal-Mart

5. 1987 2 new concept implemented Hypermarkets, which sell everything including food Supercenters which are scaled down supermarkets Also David Glass named new CEO of Wal-Mart In 1992 Sam Walton Died and in 1996 Bud Walton died. In 1995 Wal-Mart’s Annual Report was dedicated to Bud. New president and CEO H. Lee Scott states that “While our history is rich with success, there’s no question that our best years are yet to come.” History

6. WAL-MART Years since started

7. Important People • Co-founders, Sam and James “Bud” Walton started 1st Wal-Mart in Rogers, Arkansas, 1962 • David Glass was named president 1984, in 1988 he became chief executive officer • S. Robson Walton named chairman of the board in 1992 • President and CEO in 2000- H.Lee Scott • Vice President- Laura Philips

8. Important Facts • In 2004, we conducted more than 15,000 factory inspections - that's an average of more than 40 a day. • We serve more than 138 million customers per week. • Wal-Mart employs 1.6 million associates worldwide in more than 3,700 stores in the US and more than 1,500 throughout the rest of the world.

9. WMT • Traded on NYSE • Symbol WMT • Index Membership: • Dow Jones Composite • Dow Industrials • S&P 100 • S&P 500 • S&P 1500 Super Comp • Sector: Services • Industry: Discount Variety Stores

10. WMT vs Dow Jones & S&P 500

11. WMT vs Industry

12. WMT 5 years

13. WMT 30 years

14. Stock Splits

15. Stocks

16. Their Mission Statement • They don’t have a formal mission statement • They are most interested in the customers needs • The culture consists of • Respect for the individual • Service to our customers • Strive for excellence • If they did have a formal mission statement it would be, “To provide quality products at an everyday low price and with extended Customer service…always.”

17. Mission Statement

18. Their Vision Statement "The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience." - Sam Walton (1918-1992)

19. New Mission Statement • Our mission is to provide goods and services for our customers at everyday low prices. With our innovative technology we strive to have merchandise ranging from food, clothes, music, etc. on hand 24 hours a day 7 days a week. We are committed to the growth of Wal-Mart and challenge ourselves to be better. We strive to have the best, be the best, and provide quality and assurance to our customers. Our employees are a huge asset to our company, and we would not be the company we are today without them. They have a huge impact on what our company was, what it is, and what it will be. We also feel it is important to give generously to those who are less fortunate than others, which is why Wal-Mart donates thousands of dollars a year to different organizations.

20. New Vision Statement • Our vision is to provide good quality and services to our customers while remaining the market leader and striving daily to be the most admired company.

21. Divisions of WAL-MART • McLane’s • Neighborhood Markets • International • Sam’s Club • Supercenters • Distribution Centers

22. McLane’s • Nations largest distributor of food and merchandise to convenience stores. • In 2003 was sold to Berkshire Hathaway, Inc. so Wal-Mart could focus on core retail business.

23. Neighborhood Markets • Began in 1998 • Located in market with Wal-Mart Supercenters • Offers customer groceries, pharmaceuticals & general merchandise. • Provides 28,000 items to customers.

24. International • Wal-Mart expanded so that customers everywhere would associate its name with low cost, best value, greatest selection of quality merchandise and highest standards of customer service. • Wal-Mart focused on Global Positioning.

25. Sam’s Club • Membership-only, cash-and-carry operations. • Financial service credit card program (Discover Card) available at all clubs. • Annual membership fee is $35; the Elite Membership is $100. • Elite membership has additional benefits like automotive service contracts, roadside assistance, home improvement, auto brokering and pharmacy discounts. • Bulk displays and name brand merchandise.

26. Worldly Stores

27. Stores in US and World

28. BCG

29. External Factors

30. Key External Factors • Opportunities • Agreement with Berkshire Hathaway, Inc. acquired McLane Company, Inc. • Fortune’s number one Most Admired Company and largest company in nation • World’s largest private satellite communication systems • Ron Brown Corporate Leadership Award • Threats • “Buy American” policy • Target • A solution to the monopoly that Wal-Mart has created

31. EFE

32. Internal Factors

33. Key Internal Factors • Strengths • Stores in all 50 states • New concepts: • Hypermarkets, supermarkets • Wide variety of merchandise • Nationally advertised merchandise • Limited lines of merchandise – made in USA • Point-of-sale bar code scanning • Great employee benefits • Weaknesses • No formal mission statement • Management resisted putting women on board of directors • Hiring illegal minorities to clean • Growth for employees only in division

34. IFE

35. SWOT

36. CPM

37. SPACE

38. IE Matrix

39. Grand Strategy Matrix

40. Key Ratios

41. Different Strategies • Add more hypermarkets and supermarkets to establish more growth • Buy products from other countries to have more of a variety of merchandise and better quality merchandise for customers

42. QSPM

43. Decisions • We decided to add more hypermarkets based on the QSPM even though the numbers were close for both strategies

44. EPS/EBIT Analysis • Amount needed = $1 Billion • Stock Price = $45.54 • EBIT Range = 435,950 - 635,950 • Tax Rate = 26% • Interest rate = 5% • # Shares Outstanding = 4,453,000

45. EPS/EBIT

46. Implementation • Begin adding more hypermarkets to towns with populations large enough to support them. • Increase the amount of hypermarkets by one in every state (50 stores) • Increase revenue by Debt Financing per EPS/EBIT analysis

47. Evaluation • Quarterly Reports • Yearly Reports • Store growth report • Annual Sales report • Key Ratios • Stock prices in comparison to competitors

48. In the News… • In 2003 managed to get action lawsuit against Wal-Mart based on so few women being among its managers given that a majority of its workforce is female and also for equal pay. Ended up settling case because didn’t want to lose a case for discrimination because would hurt Wal-Mart’s bottom line. But as the judge rightly ruled, companies that do business on as large a scale as Wal-Mart have to be prepared to answer for their actions on an equally large scale. Case settled in June 2004 and began in September of 2003.

49. In the News… • In June 2005 Oklahoma grocer Super H filed lawsuit against Wal-Mart Stores for using a scanner to collect barcode data from the products on the Super H’s Shelves. Wal-Mart allegedly sent workers into Super H to check prices close to the time a Supercenter was opening in August. Super H wants the scanner back, not because of the price information but to make sure that there is not inventory and wholesale prices in the scanner. The real question in this case was not the price scanning but can the scanner capture other information from the scanning tag then just the price. The suit was dismissed per news reports.

50. In the News… • In April 2006 a suit was filed against a Wal-Mart in Maryland to ensure that larger employers pay up to a percentage toward health care for employees. ERISA is there to establish a uniform national framework for sponsoring, administering, protecting, and regulating employee benefit plans, including pension plans, and health and welfare plans. ERISA has a broad clause that pre-empts states and municipalities from enacting laws that relate to employee benefits plans. In this case it is not sure if the Maryland law or bills in other states violates the ERISA previsions. In February Wal-Mart announced plans to upgrade its health care benefits. This was decided in the middle of the uproar in this Maryland case. • Here are a few cases about Wal-Mart. There were 52 pages of cases if you would like to see more go to Business & Company Resource Center, News/Magazines.