Team Project BySally JuhaszPaul DelumpaHenry Tran
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: • 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
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.
Information Systems • Based on a information 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.
Information Systems • Wal-Mart’s accelerated growth couldn’t have been achieved without the state-of-the-art computer information systems. • One of the finest Information Systems Division(ISD) in the world, at the Home Office Bentonville Arkansas. • Primary competitive edge is the ability to provide speed of delivery while maintaining minimal expenses.
Logistics • Operates more than 60 distributions centers. • Orders directly from the manufacturers, in larger quantities at lower prices and passes the savings on to the customers.
Private Fleet • Largest of its kind in America • More than 5,600 tractor trailers in 48 states and employ more than 6,900 Driver Associates • Provides on-time, dedicated service to Wal-Mart Stores and SAM’S Clubs across the U.S. • Provide safe, reliable, responsive and efficient transportation solutions to the stores, clubs and customers on a daily basis
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
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 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. • 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. • 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