By: Megan Dow, Kristin Belanger, and Angle Bourgoin

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• By Megan Dow, Kristin Belanger, and Angèle
  Bourgoin

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Overview of WAL-MART Presentation

• Overview of WAL-Mart
• History
• Stocks
• Stock Information
• The Divisions
• BCG
• Their Mission and Vision Statement
• New Mission and Vision Statement
• External Opportunities and Threats
• CPM
• EFE
• Internal Strengths and Weaknesses
• IFE

• Analysis
• SWOT Matrix
• SPACE
• IE Matrix
• Grand Strategy Matrix
• Key Ratios
• Different Strategies
• QSPM
• Decisions
• EPS/EBIT Analysis
• Implementation
• Evaluation
• Update!
• References
• Questions?

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Overview of Wal-Mart

• There are 4 different segments
• Wal-Mart Stores- sales amounted to 64.3
• Discount Stores- 1,568 U.S
• Supercenters- 1,258 U.S
• Neighborhood Markets- 49 stores U.S
• Sams Club- sales amounted to 13.0
• 525 stores U.S
• Is a member only, cash and carry operations
• International- sales amounted to 16.7
• Discount stores- 942 Sams Clubs- 71
• Supercenters- 238 Neighborhood
  Market- 37
• Other- amounted to 6.1
• McLane is the nations largest distributor of
  food and merchandise to convenience stores

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History of Wal-Mart

• In 1945 Sam Walton opened the first Ben Franklin
  franchise in Newport Arkansas and operated them
  with his wife, Helen and brother, Bud.
• These were small chains that were very
  successful.
• In November of 1962 Wal-Mart was opened.
• Wasnt until mid 1970s that Wal-Mart began to
  grow.

• 1st IPO in 1970.
• Then 100 shares were worth 1,650 dollars and now
  the same 100 shares are worth more than 6
  million dollars.
• In 1999 named 1 stock on the Dow.

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History

• 1987
• 2 new concept implemented
• Hypermarkets, which sell everything including
  food
• Supercenters which are scaled down supermarkets
• Also David Glass named new CEO of Wal-Mart

• In 1992 Sam Walton Died and in 1996 Bud Walton
  died.
• In 1995 Wal-Marts Annual Report was dedicated to
  Bud.
• New president and CEO H. Lee Scott states that
  While our history is rich with success, theres
  no question that our best years are yet to come.
  

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WAL-MART
Years since started
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Important People

• Co-founders, Sam and James Bud Walton started
  1st Wal-Mart in Rogers, Arkansas, 1962
• David Glass was named president 1984, in 1988 he
  became chief executive officer
• S. Robson Walton named chairman of the board in
  1992
• President and CEO in 2000- H.Lee Scott
• Vice President- Laura Philips

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Important Facts

• In 2004, we conducted more than 15,000 factory
  inspections - that's an average of more than 40 a
  day.
• We serve more than 138 million customers per
  week.
• Wal-Mart employs 1.6 million associates worldwide
  in more than 3,700 stores in the US and more than
  1,500 throughout the rest of the world.

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WMT

• Traded on NYSE
• Symbol WMT
• Index Membership
• Dow Jones Composite
• Dow Industrials
• SP 100
• SP 500
• SP 1500 Super Comp
• Sector Services
• Industry Discount Variety Stores

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WMT vs Dow Jones SP 500
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WMT vs Industry
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WMT 5 years
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WMT 30 years
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Stock Splits
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Stocks
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Their Mission Statement

• They dont have a formal mission statement
• They are most interested in the customers needs
• The culture consists of
• Respect for the individual
• Service to our customers
• Strive for excellence
• If they did have a formal mission statement it
  would be,
• To provide quality products at an everyday
  low price
• and with extended Customer servicealways.

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Mission Statement
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Their Vision Statement

• "The secret of successful retailing is to give
  your customers what they want. And really, if you
  think about it from your point of view as a
  customer, you want everything a wide assortment
  of good-quality merchandise the lowest possible
  prices guaranteed satisfaction with what you
  buy friendly, knowledgeable service convenient
  hours free parking a pleasant shopping
  experience."
• - Sam Walton (1918-1992)

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New Mission Statement

• Our mission is to provide goods and services for
  our customers at everyday low prices. With our
  innovative technology we strive to have
  merchandise ranging from food, clothes, music,
  etc. on hand 24 hours a day 7 days a week. We are
  committed to the growth of Wal-Mart and challenge
  ourselves to be better. We strive to have the
  best, be the best, and provide quality and
  assurance to our customers. Our employees are a
  huge asset to our company, and we would not be
  the company we are today without them. They have
  a huge impact on what our company was, what it
  is, and what it will be. We also feel it is
  important to give generously to those who are
  less fortunate than others, which is why Wal-Mart
  donates thousands of dollars a year to different
  organizations.

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New Vision Statement

• Our vision is to provide good quality and
  services to our customers while remaining the
  market leader and striving daily to be the most
  admired company.

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Divisions of WAL-MART

• McLanes
• Neighborhood Markets
• International
• Sams Club
• Supercenters
• Distribution Centers

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McLanes

• Nations largest distributor of food and
  merchandise to convenience stores.
• In 2003 was sold to Berkshire Hathaway, Inc. so
  Wal-Mart could focus on core retail business.

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Neighborhood Markets

• Began in 1998
• Located in market with Wal-Mart Supercenters
• Offers customer groceries, pharmaceuticals
  general merchandise.
• Provides 28,000 items to customers.

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International

• Wal-Mart expanded so that customers everywhere
  would associate its name with low cost, best
  value, greatest selection of quality merchandise
  and highest standards of customer service.
• Wal-Mart focused on Global Positioning.

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Sams Club

• Membership-only, cash-and-carry operations.
• Financial service credit card program (Discover
  Card) available at all clubs.
• Annual membership fee is 35 the Elite
  Membership is 100.
• Elite membership has additional benefits like
  automotive service contracts, roadside
  assistance, home improvement, auto brokering and
  pharmacy discounts.
• Bulk displays and name brand merchandise.

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Worldly Stores
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Stores in US and World
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BCG
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External Factors
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Key External Factors

• Opportunities
• Agreement with Berkshire Hathaway, Inc. acquired
  McLane Company, Inc.
• Fortunes number one Most Admired Company and
  largest company in nation
• Worlds largest private satellite communication
  systems
• Ron Brown Corporate Leadership Award
• Threats
• Buy American policy
• Target
• A solution to the monopoly that Wal-Mart has
  created

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EFE
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Internal Factors
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Key Internal Factors

• Strengths
• Stores in all 50 states
• New concepts
• Hypermarkets, supermarkets
• Wide variety of merchandise
• Nationally advertised merchandise
• Limited lines of merchandise made in USA
• Point-of-sale bar code scanning
• Great employee benefits
• Weaknesses
• No formal mission statement
• Management resisted putting women on board of
  directors
• Hiring illegal minorities to clean
• Growth for employees only in division

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IFE
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SWOT
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CPM
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SPACE
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IE Matrix
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Grand Strategy Matrix
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Key Ratios
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Different Strategies

• Add more hypermarkets and supermarkets to
  establish more growth
• Buy products from other countries to have more of
  a variety of merchandise and better quality
  merchandise for customers

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QSPM
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Decisions

• We decided to add more hypermarkets based on the
  QSPM even though the numbers were close for both
  strategies

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EPS/EBIT Analysis

• Amount needed 1 Billion
• Stock Price 45.54
• EBIT Range 435,950 - 635,950
• Tax Rate 26
• Interest rate 5
• Shares Outstanding 4,453,000

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EPS/EBIT
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Implementation

• Begin adding more hypermarkets to towns with
  populations large enough to support them.
• Increase the amount of hypermarkets by one in
  every state (50 stores)
• Increase revenue by Debt Financing per EPS/EBIT
  analysis

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Evaluation

• Quarterly Reports
• Yearly Reports
• Store growth report
• Annual Sales report
• Key Ratios
• Stock prices in comparison to competitors

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In the News

• In 2003 managed to get action lawsuit against
  Wal-Mart based on so few women being among its
  managers given that a majority of its workforce
  is female and also for equal pay. Ended up
  settling case because didnt want to lose a case
  for discrimination because would hurt Wal-Marts
  bottom line. But as the judge rightly ruled,
  companies that do business on as large a scale as
  Wal-Mart have to be prepared to answer for their
  actions on an equally large scale. Case settled
  in June 2004 and began in September of 2003.

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In the News

• In June 2005 Oklahoma grocer Super H filed
  lawsuit against Wal-Mart Stores for using a
  scanner to collect barcode data from the products
  on the Super Hs Shelves. Wal-Mart allegedly
  sent workers into Super H to check prices close
  to the time a Supercenter was opening in August.
  Super H wants the scanner back, not because of
  the price information but to make sure that there
  is not inventory and wholesale prices in the
  scanner. The real question in this case was not
  the price scanning but can the scanner capture
  other information from the scanning tag then just
  the price. The suit was dismissed per news
  reports.

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In the News

• In April 2006 a suit was filed against a Wal-Mart
  in Maryland to ensure that larger employers pay
  up to a percentage toward health care for
  employees. ERISA is there to establish a uniform
  national framework for sponsoring, administering,
  protecting, and regulating employee benefit
  plans, including pension plans, and health and
  welfare plans. ERISA has a broad clause that
  pre-empts states and municipalities from enacting
  laws that relate to employee benefits plans. In
  this case it is not sure if the Maryland law or
  bills in other states violates the ERISA
  previsions. In February Wal-Mart announced plans
  to upgrade its health care benefits. This was
  decided in the middle of the uproar in this
  Maryland case.
• Here are a few cases about Wal-Mart. There were
  52 pages of cases if you would like to see more
  go to Business Company Resource Center,
  News/Magazines.

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In the News

• Military Families Outreach ProjectPartnership
  with Sesame Workshop to support children of
  military families.
• Children's Miracle NetworkBuy a balloon, save a
  child's life.

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Update!

• International Division
• 2005 was a busy year for Wal-Mart International.
  In December alone, the company acquired 545 new
  stores and gained more than 50,000 new associates
  in Japan and South America, capping a year of
  robust growth.
• Now have 13 divisions within the company

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References

• http//www.walmart.com
• http//finance.yahoo.com
• Strategic Management Concepts and Cases
• http//galenet.galegroup.com.prxy6.ursus.maine.edu
  /servlet/BCRC?locIDmaine_fortkent
• Tony Gauvins presentation on Krogers
• http//www.target.com

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Questions?

• Thank you for shopping at WAL-MART