1. Industry Analysis - Retail
Company – Wal-Mart
Save money. Live better.
Group 1
Kalpesh Agarwal - PGPM508_01 Sivaram Gunavel - PGPM508_12
Chetan Mahindra - PGPM508_23 Jaspal Singh - PGPM508_47
2. Overview of Retail is sale of goods to end
user, not for resale but for use and
Retail Industry
consumption
Global Retail Industry – Revenue
$11,326.8 billion (2008), CAGR –
80%
4.1% (2004-2008)
14% Global Retail Industry – Revenue
Forecast (2013) $14,347.3 billion
6% – Increase of 26.7% over 2008
Industry Group Segmentation
Speciality Retail Specialty Retail
Multiline Retail
Multiline Retail
Catalog and Internet Retail
Catalog and Internet Retail
3. Overview of Retail Industry
Global Retail Industry Group Global Retail Industry Group
Value Value - Forecast
Global Retail Industry Group Value Global Retail Industry Group Value
12000 0.07 Forecast
11395 0.06 16000 6.00%
11500 11326.8
14347.3
0.05 14000 13648 5.00%
11000 10794.2 12944.4
12284.6
0.04 11708.6 4.00%
10500 12000 11326.8
$ billion
10199.5 3.00%
0.03
$ billion
10000 10000
9646.1 0.02 2.00%
9500 8000
0.01 1.00%
9000 0 6000 0.00%
8500 -0.01 4000 -1.00%
2004 2005 2006 2007 2008 2008 2009 2010 2011 2012 2013
Year Year
$ billion % Growth $ billion % Growth
4. Global Retail Market Segmentation
Global Market Segmentation Global Top 10 Retailers
Rest of Top 10 Global Retailers
World
Rank Name of Company Country of Origin
6.90%
1 Wal-Mart US
Asia Pacific 2 Carrefour S.A France
26.50%
3 The Home Depot US
4 Tesco UK
5 Metro AG Germany
6 The Kroger Co. US
North & Europe
South 7 Target Corp. US
34.00%
America 8 Costco Wholesale Corp. US
32.60% 9 Sears Holding Corp. US
10 Schwarz Unternehmens Germany
Source: 2008 Global Power of Retailing (Deloitte)
5. Porter’s Five Force Analysis
NEW ENTRANTS Moderate
Diversification/
M&A .
Easy to Enter but
Less tough to survive
CUSTOMERS
SUPPLIERS COMPETITION
POWER
POWER Less bargaining
Major Player: Wal-
Highly dependent
on the Industry
Mart, Costco, Carre Power but No
four, Home Depot Switching Cost
SUBSTITUTES
Very High Departmental Store
Moderate
/General
Merchandising Store
Varies from Low
to High based on
Geography
6. Retail Opportunities
Opening: Market is just beginning its Retail story
Peaking: Market is developing quickly
Declining: Market is big, new entrants getting tighter
Closing: Market have high penetration
7. Company Over view – Wal-Mart
Mission of Wal-Mart
SAVING PEOPLE MONEY SO THEY CAN LIVE BETTER
Largest Retailer – Revenue $405,607 million
Business Segment
Wal Mart Stores
Sam’s Club
International Segment
8. SWOT
STRENGTHS WEAKNESS
• Powerful Retail • Self Cannibalization
Brand, Large scale of • Involvement in numerous
operations worldwide legal issues
• One Stop Retail • Continuous Product Recall
destination • Community Relations
• Strategic business Problem
programs
• Efficient working capital
Management
OPPORTUNITY THREATS
Global Food Safety Initiative Intense competition
Standard Price matching program by
Increasing demand of Online Target
sales Foreign currency fluctuation
Increasing opportunity in
Growing economy
10. Salient Features – Wal-Mart Winning
Strategy
Strong Distribution, Inventory Management System
Differentiated Pricing
Cost Advantage Strategy
IT Advantage
3 Basics beliefs of the Company
Respect for the Individual
Service to the Customer
Striving for Excellence
11. Corporate Strategy
Dominance in Retail Market
Expansion in US and International Market
Creation of Positive Brand and Company Recognition
Branching into new sectors of Retail
12. Key Strategic Moves by Wal-Mart
Acquisition of McLane Company in year 1990
Diversification in Grocery and Food Retailing
Razor thin margin – provides Great Value to customer
Acquiring of PACE club of K Mart
13. Sustainability of Wal-Mart Strategy
Leader in discount Retailing
Size and Volume of Wal-Mart gives itself advantage over its
suppliers and competitors
Extensive distribution and network
Discounting Retailing format to work in International Market as
not much competition
Extensive IT infrastructure provides leverage over competitors
14. Recommendation
Must adopt a friendlier corporate attitude
It needs to relax its anti-unionization policy
Improve public perception that Wal-Mart can destroy
communities
International expansion should be done with the help of Local
retailers