Transcript Document 7579350

Team Project
By
Sally Juhasz
Paul Delumpa
Henry Tran
Wal-Mart – E-tailing in the World of Superstores
Wal-Mart at a Glance
First opened in 1962 by Sam Walton in Bentonville,
Arkansas.
Wal-Mart stores have become the largest retailer in
the world, with more than 4,750 stores worldwide.
It operates about
– 1,477 Wal-Mart discount stores
– 538 Sam's Clubs
– 1,471 Wal-Mart Super-centers (combines supermarkets and
discount stores) in the United States
Wal-Mart at a Glance
Wal-Mart employs 1,400,000 employees.
People who put $1000 into Wal-Mart stock
when it went public in 1970 saw that
investment grow to nearly $2 million by 1993.
In 2002, Wal-Mart operated the largest private
truck fleet in the United States, consisting of
7,767 tractors and 26,117 trailers.
Wal-Mart at a Glance
Features 150,000 different items in its biggest
superstores.
Made up of four retail divisions:
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–
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Wal-Mart
Wal-Mart Super-centers (Wal-Mart with grocery)
Sam's Club (membership warehouse clubs)
International Division
Operates more than 1,300 stores internationally.
Wal-Mart International
United Kingdom
Brazil
Wal-Mart International
Mexico
China
Wal-Mart International
Germany
South Korea
Wal-Mart Philosophies called Culture
Stories
The Sundown Rule
– Strives to answer requests by sundown on the day it receives them.
The Ten-Foot Attitude
– Promises that if a employee comes within ten feet of a customer the
employee must look the customer in the eye and ask if the person
would like to be helped.
Every Day Low Prices
– Believes that by lowering markup, they will earn more because of
increased volume, thereby bringing consumers added value for the
dollar everyday.
Exceeding Customer Expectations
– Customers have been known to send letters to individual associates for
giving exceptional service.
Subsidiary of Wal-Mart Stores
Wal-Mart.com
– Founded in January 2000.
– Headquarters are in the San Francisco Bay Area.
– Combines the best of two great worlds, technology
and world-class retailing.
– Objectives are:
Guaranteed satisfaction
Friendly service
Convenient hours (24 hours, 7 days a week)
Great online shopping experience
Subsidiary of Wal-Mart Stores
Wal-Mart.com main objectives are:
– Providing the customers what they want
– When they want it
– All at a value
– Treating each other as we would hope to be
treated
– Acknowledging Wal-Mart’s total dependency on
their associate-partners to sustain their success
Financial Statements
Financial Statements
Accounting Policies
Inventories
– Uses the retail last-in, first-out (LIFO) inventory
accounting method for the Wal-Mart Stores segment.
– Cost LIFO for the SAM’S CLUB segment and other
cost methods, including retail first-in, first-out (FIFO)
and average cost methods, for the international
segments.
– Not recorded in excess of market value.
– Future changes in circumstances, such as changes in
customer merchandise preference or unseasonable
weather patterns, could cause inventory to be exposed
to obsolescence or be slow moving.
Communication Systems
Based on a satellite communication system that links all stores
with the headquarters in Bentonville, Arkansas.
Used to track the company's delivery trucks.
Has an online system with its suppliers.
Use point-to-point inventory system (RFID – Radio Frequency
Identification)
– RFID devices help keep up to the minute track of inventory, deliveries,
and backup merchandise in stock.
– Wal-Mart has gained a competitive advantage using its satellite
communication system.
Distribution Centers
 Located in 120 communities
 Keeps Wal-Mart stores and SAM’S Clubs’ shelves
well stocked
New Regulations
Trucks drivers hours regulations
– Requires drivers to work 8 hour shifts and rest 8
hours.
Affects the company’s distribution system.
Home Land Security
– Slows operations down due to Customs
Inspections.
Employment Standards
Compensation
Hours of Labor
Forced/Prison Labor
Child Labor
Discrimination/Right
Workplace Environment
Standards for Suppliers
Address these general rules:
Part of a factory certification process before buying
merchandise from a supplier’s factory.
Will not buy goods produced by factories that have
been denied certification
Examines its suppliers by participating in on-site
visits, reviewing personnel, and conducting interview
with workers.
Compliance with applicable laws in their jurisdiction.
Standards for Suppliers
Suppliers must comply with the factory
certification process.
Wal-Mart’s standards is reviewed against a
four-level assessment.
– Green
– Yellow
– Red
– Failed
Standards for Suppliers
Green
– Factories have no or low risk violations.
Yellow
– Factories have medium risk violations.
– Required to submit a Corrective Action Plan (CAP)
– Factory/Supplier must be re-audited within 120
days.
– 3 Yellow assessments factories will be disapproved
Standards for Suppliers
Red
– Assessed as high-risk violations.
– Must submit a Corrective Action Plan (CAP)
If the factory fails to do so, it will be disapproved
– Re-audit must be performed in 60 days from initial audit date or
the factory will be disapproved.
– If factory receives 2 red assessments, it will disapproved.
Standards for Suppliers
Failed
– Violations related to child labor, forced and prison labor,
trans-shipment, discrimination, human rights abuses and/or
unsafe working conditions.
– Factories that are disapproved cannot receive new business
assessed as failing.
Factory Certification Process
Three Objectives:
– To educate factories regarding local legal
requirements
– To verify management practices
– To encourage implementation of necessary
changes that will ultimately result in an improved
quality of life for the workers who supply the stores
with the merchandise that the customers demand
Customers & Competition Projections
Keys to Success
 Quality Service
 Customer Loyalty
 New Inventive Ideas
 Expansion
 Competitive Pricing
 Fresh Image
Wal-Mart's Competition Battle
How to Handle Competition
 Wal-Mart must set themselves
apart from the competition, with
new creative ideas and goals.
 Keep Customer Service and
Quality a top priority.
 Always meet the customer’s wants
– Have what the customer desires
every time they come to shop.
 Use new themes and images to
give keep the company with a
fresh look. “Rolling Back Prices”
Wal-Mart Customers
 Customer’s tend to keep coming back
to Wal-Mart because of the great
pricing, customer service, quality,
availability, and convenience.
 Store layout is another style Wal-Mart
draws customers. They conveniently
place certain items around the store
that are in majority of demand.
Wal-Mart serves more than 1.2 Million
customers weekly in the U.S. and
330,000 Internationally which include
Puerto Rico, Canada, China, Mexico,
Brazil, Germany, United Kingdom,
Argentina and South Korea.
 To gain potential new customers, Wal-
Mart must pursue in the expansions of
retail; Fulfill needs of customers that
they already haven’t. They may also
see a profit in producing there own line
of products as in grocery foods and
home accessories.
Rewards For Being Great
In 2003, Wal-Mart was named by FORTUNE magazine as the most
admired company in the United States.
In 2002, Wal-Mart was presented with the Ron Brown Award for Corporate
Leadership, a presidential award that recognizes companies for outstanding
achievement in employee and community relations.
Forbes magazine recognized Wal-Mart in 2002 as being one of the most
philanthropic companies in America.
Wal-Mart ranked among the top five corporate foundations by giving in 1999
and 2000, according to the Foundation Center.
Giving Back – To Be Successful
Wal-Mart Stores, Inc. contributed $150 million to support communities and
local non-profit organizations.
More than 60,000 grants were awarded through the matching grant
program in 2002.
More than $265 million in 15 years for Children's Miracle Network (CMN).
$80 million in scholarships since 1979
$1.7 million in Environmental Grants
$3.1 million in Volunteerism Always Pays grants