1. WAL-MARTSTORES,INC.:STRATEGIES FORDOMINANCE IN THE NEW MILLENNIUM

2. HISTORY OF THECOMPANY 3. CHRONOLOGY1960s Retail RevolutionSam Waltons strategy was built on anunshakeable foundation: The LowestPrices Anytime, Anywhere.1970s Walmart Goes NationalIn the 1970s, a decade of incredible growth, "Mr.Sam" began to take Walmart national, proving hisvisions widespread appeal.1980s Decade of FirstsIn the 1980s, the first Sams Club opened,serving small businesses and individuals, andthe first Walmart Supercenter opened,combining a supermarket with generalmerchandise. 4. CHRONOLOGY1990sAmericas Top RetailerBy 1990, Walmart was the nationsnumber-one retailer. As the WalmartSupercenter redefined convenience andone-stop shopping, Every Day Low Priceswent international. 2000s New Millennium Walmart entered the new millennium dedicated to offering customers a seamless shopping experience, whether they are online, in a store or on a mobile device. H. Lee Scott, Jr. succeeded David Glass as CEO. 5. MISION We save peoplemoney so they canlive betterVISION Be the retailer ofchoice forconsumers 6. FRAMINGKEY QUESTIONWhat should Lee Scott do as Wal-Marts new CEO to keep Wal-Mart as the worlds biggest retailer and keep increasing sales andprofits into the future? FLIPPING AND SKIMMINGWal-Mart Stores Inc. Strategies for Dominance in the New MillenniumAutor: James W. Camerius, Northern Michigan University.Number of Pages: 18Cases Content: The Sam Walton Spirit Marketing concepts The external environment Domestic Corporate Strategies Decisionmaking in a Market Oriented Firm The Growth challenge 3 Exhibit 4 Appendix 7. FRAMINGBEGINNING OF THE CASEAt the beginning of 1991, the firm had 1573Wal-Mart stores in thirty-five states, withexpansion planned for adjacent states.ENDING OF THE CASE In 2000, Wal- Mart Store, Inc, Bentonville,Arkansas, operated mass merchandisingretail stores under various names and retailformats including Wal-Mart discountdepartment stores. 8. LABELING GENERAL ENVIRONMENT-Wal-Mart the largest wholesaler in the world minority.-Opened its first headquarters and distribution center in Bentonville.-Soon be joining the New York Stock Exchange.-Outside the United States, the company operates in 14 countries.INDUSTRY- Retail-Walton argues that the essence of successful discount retailer to reduce the price ofan item where possible, reducing the profit margin, and profit on increased salesvolume.-Currently the company employs more than 1.3 million employees, a million in theU.S. alone-The Company owns more than 4,000 stores worldwide.-The company serves over 100 million customers a week. 9. LABELINGCOMPETITION Target Corporation Kmart Corporation Costco Wholesale Corporation The Kroger Co. Albertsons, Inc. Walgreen Co. CVS Corporation Carrefour SA Royal Ahold N.V.Toys R Us, Inc. 10. LABELING ECONOMICAL-The chambers of commerce supported Wal-Mart because they believed that thecompany helps the local economy.-The retail sector has become highly competitive-While the economy weakened by inflation.-Wal-Marts strategy was to compete with rivals and reduce overhead. LEGAL-U.S. based multinational company.-Had to withdraw from Germany and South Korea for failing to adapt to the tastes ofthese markets. TECHNOLOGYSmart labels or "tags" (a sticker with an embedded microchip) is the technologyused and to store information about each product, but large-scale, large suppliersbenefit take full advantage to maintain a more thorough inspection of themerchandise produced, shipped and sold. 11. SYNTHESIZING Wal-Mart is a strong company that has grownusing aggressive strategies with great stability inthe market because of its competitive advantages.The directors of Wal-Mart have achieved a reallygood economic environment and have managedto gain acceptance from consumers, governmentand suppliers. The inventory control systems,concern for customer satisfaction, concern for thecommunity and increasing demand have beenpart of their success. 12. PORTER ANALYSIS LOWBargaining power of Suppliers: Forging relationships with suppliers is essential to Wal-Marts business. Without timely inventory deliveries, Wal-Mart could not maintain its full shelves and would lose customers. For this reason, the company engages in contractual agreements with its suppliers. This arrangement is beneficial for both parties, as the supplier makes sure it will have constant access to- retailers with large market share. This way, suppliers have a guaranteed buyer for the supplies and can arrange specific prices. Wal-Mart benefits by guaranteeing the cost of their merchandise and the timely deliveries, which will ultimately benefit consumers. Consumers will receive lower prices and an assortment of products. 13. PORTER ANALYSIS LOWBargaining power of Buyers:Consumers today are searching for the best dealspossible. They are waiting for discounts and sales tobulk up on products. Discount retailers like Wal-Martare creating huge supercenter stores because theywant their stores to become a one-stop trip. Thiswas most beneficial in 2007 as the high oil prices ledconsumers to shop less frequently to save gas.Instead of traveling from store to store in search fora variety of products, consumers can find them all inone location. Customers know what they want andhow far they are willing to search for the item.Retailers must maintain high inventory levels toretain customers and their market share. 14. PORTER ANALYSIS LOW Being that the retail industry is aThreats of New Entrants: highly saturated market, new entrants would face difficulty succeeding in this industry. In fact, it is highly difficult for discount retailers to penetrate other markets as Wal-Mart tried to enter Germany and South Korea. The company was unsuccessful and had to pull out because of its unprofitability 15. PORTER ANALYSIS MEDIUM Substitute products are products that can be used asTHREAT OF SUBSTITUTE replacements for other products to satisfy the same necessity. Wal-Mart benefits from this idea as discounters have lower prices than department stores and consumers go for higher quality product with the lowest prices. Macys and PRODUCTS: Wal-Mart may both sell apparel and bedding products but there is a major price difference between the two. When consumers are trying to save, they will substitute pricier Macys items with lower priced Wal-Mart items. In making substitutions, consumers may have to forgot certain features such as the quality of the product, brand or even the service the store provides. Wal-Mart is working on providing the best customer service possible but as a high-traffic store, it is generally impossible to provide one-on-one service. 16. PORTER ANALYSIS HIGHThe retail business is a highly competitive industry. Wal-Martfaces a number of competitors in all segments of theirbusiness. After being the first in the industry to build the firstsupercenter, Kmart and Target built supercenters as well.Discount stores were generally thought of as shopping centersfor low-income consumers but this idea has changed. AsRivalry:retailers expanded their product lines, they included productsfor different customer incomes. Target, in particular, hasgenerally been thought of as an upscale discount store as thecompany tends to target medium income consumers but theirprices are usually higher than Wal-Marts. 17. Customers loyalty High Brand value Good inventory control SystemS Good reputation on Quality and low priceEmphasis in Human Resource management and developmentMuch of the same merchandise Low reaction to changes in market Insistence on doing things the Wal-mart wayW Low current ratioLow market research in foreign countries Strategic Alliances and merger Increase Demand Technological developmentsO New retail formatsCustomers concern about environmentCultural differences in new markets Countries economic problems Local regulationsT Antitrust issuesIntense competitive conditions 18. IFE - MATRIX 19. EFE - MATRIX 20. THE INTERNALEXTERNAL MATRIX 21. SPACE MATRIX Internal Strategic PositionExternal Strategic Position FINANCIAL (FS) ENVIRONMENTAL (ES) +6 best, +1 worst-1 Best, -6 Worst (+6) Net Sales(-1) TechnologyY(+3) Current Ratio(-2) Demand Increase (+6) Revenues (-5) Barriers to entry (+5) Net Income (-6) Competitive pressure (+6) Comparative store sales Increase (-3) Antitrust Issues Avg. = 5.2Avg. = -3.4COMPETITIVE (CA) INDUSTRY (IS)-1 best, -6 worst+6 best, +1 worst (-1) Costumers loyalty(+5) Growth potentialX Brand value (-1)(+5) Profit potential (-2) Product Quality(+5) Developments in technology (-1) Human resource management(+6) Consolidation (-1) Inventory Control System (+2) Easy to entry Avg. = -1.2 Avg. = 4.6 Y= 5.2 + (-3.4) = 1.8 X= -1.2 + (4.6) = 3.4 22. FINANCIAL RATIOS 23. SUMARY SPACETOWS IFE-EFE MATRIXInvest on marketing and publicity The Internal External Matrix Wal-Mart should pursue anIncrease the satisfaction to get shows that Wal-Mart is a strong aggressive strategy. The mouth advertisementcompany in the retail industrycompany needs to use its and the analysis recommended strengths and opportunities to Sell innovative merchandise that Wal-Mart should pursue increase their sales, keep their Improve investment on research the strategy of grow and buildbrand value and get aand development in foreign to reach the gold of increase successful penetration in markets sales and profits.foreign markets. 24. ALTERNATIVE 1Increase the investment on research and development tounderstand the foreign markets before enter to them.PROSCONSReduce the effect of the High cost of R & Dcultural differencesIncrease sales and profitsPerfect penetration in newmarkets 25. ALTERNATIVE 2Increase the satisfaction of customers and give tothem more benefits like promotions and gift tomaintain the loyalty and increase the mouthadvertising.PROSCONSIncrease sales and profitsHigh cost of investmentCostumers loyalty High cost of R & DIncrease the mouth advertising.Increase brand valueIncrease top of mind onconsumers 26. ALTERNATIVE 3Make alliances with successful companies that haveexperiences on the new markets and do the things ontheir successful way in that market.PROSCONSAvoid the reject of potential High investmentcustomers to the brandRisk of mergerIncrease sales on foreign markets Lose a little of the Wal-Mart WayLearn new retail modelsIncrease the brand valueIncrease sales and profits 27. RECOMENDATION Lee Scott, new Wal-Marts CEO should pursuethe third alternative to keep Wal-Mart as theworlds biggest retailer and keep increasingsales and profits into the future. It means thatLee Scott should look for successfulcompanies around the world that can bringbenefits and which workings philosophyresembles Wal-Mart philosophy. Thisalternative has several cons but its pros arebetter and reach the gold. Wal-Mart has tokeep growing and increase their investment onmarketing to raise its top of mind and keep itabove the competitors.