Team Project

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Team Project
BySally JuhaszPaul DelumpaHenry Tran
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Wal-Mart E-tailing in the World of Superstores
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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

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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.

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Wal-Mart at a Glance

• Features 150,000 different items in its biggest
  superstores.
• Made up of four retail divisions
• 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.

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Wal-Mart International
United Kingdom
Brazil
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Wal-Mart International
Mexico
China
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Wal-Mart International
Germany
South Korea
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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.

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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

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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-Marts total dependency on
  their associate-partners to sustain their success

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Financial Statements
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Financial Statements
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Accounting Policies

• Inventories
• Uses the retail last-in, first-out (LIFO)
  inventory accounting method for the Wal-Mart
  Stores segment.
• Cost LIFO for the SAMS 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.

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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.

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Distribution Centers

• Located in 120 communities
• Keeps Wal-Mart stores and SAMS Clubs shelves
  well stocked

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New Regulations

• Trucks drivers hours regulations
• Requires drivers to work 8 hour shifts and rest
  8 hours.
• Affects the companys distribution system.

• Home Land Security
• Slows operations down due to Customs Inspections.

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Employment Standards

• Compensation
• Hours of Labor
• Forced/Prison Labor
• Child Labor
• Discrimination/Right
• Workplace Environment

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Standards for Suppliers

• Address these general rules
• Part of a factory certification process before
  buying merchandise from a suppliers 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.

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Standards for Suppliers

• Suppliers must comply with the factory
  certification process.
• Wal-Marts standards is reviewed against a
  four-level assessment.
• Green
• Yellow
• Red
• Failed

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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

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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.

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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.

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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

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Customers Competition Projections

• Keys to Success
• Quality Service
• Customer Loyalty
• New Inventive Ideas
• Expansion
• Competitive Pricing
• Fresh Image

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Wal-Mart's Competition Battle
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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 customers 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

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Wal-Mart Customers

• Customers 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.
• To gain potential new customers, Wal-Mart must
  pursue in the expansions of retail Fulfill needs
  of customers that they already havent. They may
  also see a profit in producing there own line of
  products as in grocery foods and home
  accessories.

• 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.

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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.

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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