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Management‘s Initiatives to Transform the Company and Curtail Wal-Mart Bashing
Wal-Mart Stores Inc.
FACT - Strategisches Controlling
Caroline Steinhagen
Anne Zänker
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I. Introduction Video-Clip
II. Critics about Wal-Mart
III. History of the Company
IV. Wal-Mart‘s Strategy
V. SWOT-Analysis
VI. Conclusion
Agenda
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II. II. II. II. Critics about WalCritics about WalCritics about WalCritics about Wal----MartMartMartMart
� low wages
� move the production to China
� employment of illegal immigrants
� discrimination against women
� political influence
� non-unionized politics
� „Wal-Mart Effect“
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III. History of the CompanyIII. History of the CompanyIII. History of the CompanyIII. History of the Company
1962 – opening of the first stores in Arkansas
1990 – largest retailer in the United States
1991 – international market entry
1999 – largest private employer in the US
(1,14 million associates)
2000 – Lee Scott is third CEO
2006 – transformation process
2008:
• sales: $ 365 billion / profit: $12.7 billion
• over 7000 stores with 2,1 Mio workers world wide
• 4 different store concepts
Sam Walton
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IV. IV. IV. IV. WalWalWalWal----MartMartMartMart‘‘‘‘ssss StrategyStrategyStrategyStrategy
Overall Low-CostProvider Strategy
BroadDifferentiation Strategy
FocusedLow-CostStrategy
FocusedDifferentiation Strategy
Best-CostProvider Strategy
Type of Competive Advantage Being Pursued
Lower Cost Differentation
Market Target
A BroadCross-Sectionof Buyers
A Norrow BuyerSegment (orMarket Niche)
Five Generic Strategies (M.E. Porter)
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IV. IV. IV. IV. IV. IV. IV. IV. WalWalWalWalWalWalWalWal--------MartMartMartMartMartMartMartMart‘‘‘‘‘‘‘‘s Strategys Strategys Strategys Strategys Strategys Strategys Strategys Strategy
company cultureleadership
purchase organisation/ supplierssales system/
customers
internal processes
-supply chain-distribution
-technology
expansion
national
international
→ overall low cost provider
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IV. WalIV. WalIV. WalIV. Wal----MartMartMartMart‘‘‘‘s Strategys Strategys Strategys Strategy
environment
•„zero waste“ campaign
• biodegradable
packaging
• efficiency of the fleet
• reduce energy
consumption in stores
customers
• new store appearance
• offer extended
• faster check-out over
the counter
• store of the community
employees
• higher salaries
• health insurance
• bonus payments
• paid vacation
• maternity leave
• 10% employee
discount
transformation process
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V. SWOT V. SWOT V. SWOT V. SWOT –––– AnalysisAnalysisAnalysisAnalysis
THREATS
� competitors (Target, Kmart)
� relations to suppliers
� public critics
� impact of lobbying
� unions
OPPORTUNITIES
� choice of location
� demand for discounters
WEAKNESSES
� wages, social benefits
� image
� no trainings for associates
� focus of cost savings
STRENGTH
� cost guide
� technological developments
� supply chain
� range/ collection
� brand
POSITIVE NEGATIVE
INTERNAL FACTORS
EXTERNAL FACTORS
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V. SWOT V. SWOT V. SWOT V. SWOT –––– AnalysisAnalysisAnalysisAnalysis
valuation of customers (United States)
source: Zenith Management Consulting (2005)