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.

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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.

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On November.27 2006,bharti enterprises and WAL-MART entered into joint venture of equal partnership to function in the ‘cash and carry’ format.

By Aug.2007 - first store in India.

Present status :

Recruitment

Negotiations with potential customers

Market surveys are on.

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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.

WAL-MART

Partnering with bharti will give Wal Mart access to the 8th largest retail market in the world valued at $320 billion.

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Advantage bharti

Huge ground network in the country already through its telecom business

Knows the Indian landscape and understands the demographics in this country.

Knowledge of where to get the real estate for the business.

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Advantage Wal-Mart

Companies innovative information technology .

Highly efficient service channel management which makes it possible to buy directly from the producers.

Company has tremendous sourcing efficiencies which will bring economies of scale from day one.

MARKET

PLAYERS

The The competitioncompetition

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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

The Tata group has partnered with Wool Worths ,for servicing and technical support .It opened the first store in Mumbai in Oct.2006.

PANTALOONS

BIG BAZAAR are rapidly expanding and are planning to open 100 stores by dec.07

DON’T FEAR INDIA !

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Fear of Wal-MartNO,NO

WAL –Mart is not invincible

Last year it has to fled from Germany and South Korea

In Germany it lost $863 million (rs.4056 cr.)and sold all its 85 stores to Metro.

In South korea –

Had to sell all 16 stores.

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Reasons

Local German stores Aldi and Lidl –able to deliver good quality grocery at affordable prices.

Opened all stores in suburbs –customers were very reluctant to drive that far.

Unable to understand the customer insights well

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India is not America….

India is one country, but a hundred different markets.

28 States, 7 Union Territories, 14 different official languages, hundreds of dialects, multiple ethnicities, cultures and habits….

Geographical challenges :

India has 3 times more people then America

Population density 11 times that of America.

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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…

Reliance intends opening more stores (around 6,000)

In 5 years than Wal –Mart has opened in 44 years .

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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

They pay producers more and charge consumers less.

Resulting savings generate employment when they are spent on

other goods and services.

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Future of mom and pop stores

Kirana stores offers services that are unmatched by organized retailers.

Credit

Personal suggestions

Good relationships.

Home delivery

The U.S.P

Their instant response to changing consumer needs.

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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.

Customers are also hungry for new ways of

shopping.

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SOURCE :

BUSINESS TODAY RETAILER

ECONOMIC TIMESTHE WAL –MART WAY : DON SODERQUIST

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