Transcript GLOBAL MARKETING CHANNELS AND PHYSICAL DISTRIBUTION CASE

GLOBAL MARKETING CHANNELS
AND PHYSICAL DISTRIBUTION
CASE IN WAL-MART
By
Tri Marheni 053728
Mega Puji Indrawati 053800
Riana Setya Permana 053824
Dewi Shinta Sirait 057266
A. INTRODUCTION
 Wal-Mart Stores is an American public corporation that runs a
chain of large, discount department stores.
 Wal-Mart is the largest grocery retailer in the United States,
with an estimated 20% of the retail grocery and consumables
business, as well as the largest toy seller in the U.S.
 Wal-Mart also owns and operates the North American company
of Sam's Club. Wal-Mart operates in Mexico as Walmex, in the UK
as ASDA, and in Japan as Seiyu. It has wholly-owned operations in
Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Mart's
investments outside North America have had mixed results: its
operations in South America and China are highly successful.
B. Incorporation and Growth
 The company was incorporated as Wal-Mart Stores on
October 31, 1969. In 1970, it opened its home office and first
distribution center in Bentonville, Arkansas.
 It had 38 stores operating with 1,500 employees and sales of
$44.2 million
 During the 1980s, Wal-Mart continued to grow rapidly, and by
its 25th anniversary in 1987 there were 1,198 stores with sales
of $15.9 billion and 200,000 associates. At the time, it was the
largest private satellite network, allowing the corporate office to
track inventory and sales and to instantly communicate to
stores.
 Also in 1988, the first Wal-Mart Supercenter opened in
Washington, Missouri. Thanks to its superstores, it surpassed
Toys "R" Us in toy sales in the late 1990s.
 Wal-Mart also opened overseas stores, entering South
America in 1995 with stores in Argentina and Brazil; and Europe
in 1999, buying ASDA in the UK for $10 billion.
 In 1998, Wal-Mart entered the grocery business, introducing
the "Neighborhood Market" concept with three stores in
Arkansas.
 By 2005, estimates indicate that the company controlled about
20% of the retail grocery and consumables business. In 2005,
Wal-Mart had $312.4 billion in sales, more than 6,200 facilities
around the world-including 3,800 stores in the United States
and 2,800 elsewhere, employing more than 1.6 million
"associates" worldwide.
C. Global Marketing Channels
Global Retailing Categories
Fewer Categories
A
C
Own-Label Focus
Manufacturer
Brands Focus
B
D
Many Categories
Global Retailing Market Entry Strategy Framework
Culturally Close
D
Organic
A
Chain
Acquisition
Difficult to Enter
Easy to Enter
C
Franchise
B
Joint Venture
Culturally Distant
Strategy Framework in Wal-Mart America
 Wal-Mart expanse to many country in America Continent such as Canada, Mexico,
Argentina, Brazil, and Puerto Rico. This is Table about Wal-Mart Retail Operations in
America, 2003 :
Discount Stores
Argentina
Brazil
Canada
Mexico
Puerto Rico*
Total
0
0
213
472**
9
694
Supercenters
11
12
0
75
1
99
Sam’s
Clubs
0
8
0
50
9
67
Neighborhood
Markets
0
2*
0
0
33
35
 Wal-Mart has different market entry strategy to go into one market in one country. In
Mexico, Wal-Mart established a 50-50 joint venture with Cifra SA, Mexico’s largest
retailers. In Canada (1994), Wal-Mart entered by acquisitions the 122 store Woolco
Chain. In Brazil, Wal-Mart teamed up with Lojas Americanas SA (open five store). But in
Argentina, Wal-Mart opened four stores without a partner.
Strategy Framework in Wal-Mart Europe
 Wal-Mart expanse to two country in Europe such as Germany and United Kingdom.
This is Table about Wal-Mart Retail Operations in Europe, 2003 :
Discount
Stores
Neighborhood
Supercenters Sam’s Clubs
Markets
Germany
0
94
0
0
United
Kingdom
248
10
0
0
Total
248
104
0
0
 In Europe, both Germany and UK, Wal-Mart use acquisitions as a strategy to enter
new markets. Wal-Mart purchase of 21 hypermarkets from Wertkauf GmbH and
acquired 74 additional hypermarkets from Spar Handels AG in Germany. And then, WalMart offering more than $ 10 billion for Britain’s third largest supermarket chain, Asda
Group PLC.
Strategy Framework in Wal-Mart Asia
 Wal-Mart is also targeting Asia. With China now a member of World Trade
Organization, Wal-Mart executive intend to capitalize on the coming economic
expansion. This is Table about Wal-Mart Retail Operations in Asia, 2003 :
Discount
Stores
Supercenters
Sam’s Clubs
Neighborhoo
d Markets
China
0
20
4
2
Korea
0
15
0
0
Total
0
35
4
2
 Wal-Mart earliest foray into China, a joint venture launched in 1996 with Thailand’s
Charoen Pokphand Group. Wal-Mart executives have made a point of building
relationships with government officials.
Development of Wal-Mart Distributions Channels
 Wal-Mart's international operations currently comprise 2,980 stores in 14
countries outside the United States (Argentina, Brazil, Canada, Puerto and the
UK)
With 1.8 million employees worldwide, the company is the largest private
employer in the US and Mexico, and one of the largest in Canada. Wal-Mart has
operated in Canada since its acquisition of the Woolco division of Woolworth.
 In December 2006, the conversion of Wal-Mart in December 2006.
 Sales in 2006 for Wal-Mart's UK subsidiary, ASDA, accounted for 42.7% of sales
of Wal-Mart's international division.
 In contrast to Wal-Mart's US operations, ASDA was originally and still remains
primarily a grocery chain, but with a stronger focus on non-food items than
most UK supermarket chains other than Tesco.
 At the end of 2007, ASDA had 340 stores, some of which are branded ASDA
Wal-Mart Supercentres, as well as ASDA Supermarkets, ASDA Living, George
High Street and ASDA Essentials stores.
In addition to its wholly-owned international operations, Wal-Mart has joint
ventures in China and several majority-owned subsidiaries. Wal-Mart's majorityowned subsidiary in Mexico is Walmex. In Japan, Wal-Mart owns about 53% of
Seiyu.
 Additionally, Wal-Mart owns 51% of the Central American Retail Holding
Company (CARHCO), consisting of more than 360 supermarkets and other
stores in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica.
 Wal-Mart bought the 116 stores in the Bompreço supermarket chain in
northeastern Brazil.
 As of August 2006, Wal-Mart operates 71 Bompreço stores, 27 HiperBompreço stores, 15 Balaio stores, and three Hiper Magazines (all originally
parts of Bompreço).
 It also runs 19 Wal-Mart Supercenters, 13 Sam's Club stores, and two Todo Dia
stores. With the acquisition of Bompreço and Sonae, Wal-Mart is currently the
third largest supermarket chain in Brazil, behind Carrefour and Pao de Acucar
 In November 2006, Wal-Mart announced a joint venture with Bharti
Enterprises to open retail stores in India. As foreign corporations are not
allowed to directly enter the retail sector in India, Wal-Mart will operate
through franchises and handle the wholesale end. The partnership will involve
two joint ventures; Bharti will manage the front end involving opening of retail
outlets, while Wal-Mart will take care of the back end, such as cold chains and
logistics.
D. Physical Distribution in Wal-Mart
SUBSIDIARIES
Wal-Mart Stores Division U.S.
1.

Wal-Mart Discount Stores
Wal-Mart Discount Stores carry general merchandise and a selection of
food. Many of these stores also have a garden center, a pharmancy, Tire &
Lube Express, optical center, one-hour photo processing lab, portrait studio,
and a fast food outlet. Some also have gasoline stations.
2.

Wal-Mart Supercenter
The first Supercenter opened in 1988 in Washington, Missouri. A similar
concept, Hypermart USA, opened in Garland, Texas a year earlier. All of the
Hypermart USA stores were later closed or converted into Supercenters.
3.

Wal-Mart Neighborhood Market
They offer a variety of products, which include full lines of groceries,
pharmaceuticals, health and beauty aids, photo developing services, and a
limited selection of general merchandise.
4.

Sam's Club
Sam's Club is a chain of warehouse clubs which sell groceries and general
merchandise, often in large quantities. Sam's Club stores are "membership"
stores and most customers buy annual memberships.
Supply Chains
Wal-Mart not only use business-to-consumer marketing (b-to-c or B2C) but
also business-to-business marketing (b-to-b or B2B).
In B2C marketing, Wal-Mart use The Alternative Distribution Channels of
Consumer Goods, like this :
Producer
Wholesaler
Retailer
Consumer
In B2B marketing, Wal-Mart use The Alternative Distribution Channels of
Business Goods, like this :
Producer
Wholesaler
Consumer
A vertical marketing system (VMS) is a distribution channel
structure Wal-Mart. Type of VMS in Wal-Mart is Corporate
VMS and Administered VMS.
Wal-Mart Innovations Supply Chains
During the past 20 years, Wal-Mart has grown to immense proportions. The
entire conglomeration of Wal-Mart stores consists of retail stores, both
national and international, websites, and other acquisitions and
partnerships which have contributed to its global success story.
Transportation (Remixing the Inbound Channel)
 Remix is Wal-Mart’s name for a vendor transportation consolidation program
on a colossal scale, the sort of scale that only the world’s largest single retailer
can create with a strategy that will echo across the country’s logistics
pipelines.
………THanKS……..