The WAL MART story

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The WAL- MART story
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By Mahavir Jain M.B.A (MKTG.)2005-2007 Faculty
of Management Studies Udaipur (Rajasthan )
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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.

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FACTS

• 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,Argen
  tina,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.

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REWARDS AND RECOGNITION
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.
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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.

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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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The bharti Wal-Mart deal

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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The Significance

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.

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The competition
M A R K E T P L A Y E R S
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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


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DONT FEAR INDIA !
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Fear of Wal-Mart NO,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
TIMES THE WAL MART WAY DON SODERQUIST

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THANK -YOU

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