Wal-Mart Stores’ Discount Operations

Wal-Mart Stores’ Discount Operations Nidhi Kumar Pallavi Mishra Pranati Goswami Ruchir Jain Shweta Aggarwal Utkarsh Pandey

Wal-Mart vs. Industry Parameter

WalMart

!ndustry

Building Rentals

1.8% o Sales

!1.8% o Sales

In"ound #ogistics

$% o Sales

% o Sales

#icense &ees

'.$% o Sales

'.(% o Sales

Inventory )urns

(.*+

,(.*+

Srinage

1./% o Sales

$% o Sales

Sot0ard goods

&ocus on ard goods

&ocus on sot goods

 )23W4

Advantages

"isadvantages

?ig volu7e and Inventory turnover

#o6er Margins

Stocing top selling ite7s

?uge Setup
#ocated in areas o ( to *# population

#o6 Barriers to 3ntry

 )arget Aroup: #o6 Ris Broader ational resence as co7pared to co7petitors

Weaer distri"ution n06 DiCcult to acieve econo7ies o scale

S Parameter

"iscount Stores

Warehouse #lu$s

Inventory )urns

(.*

1$

Aross Margin

1'% to 1*% lo6er tan traditional dept. stores

$'% "elo6 discounters price

#ocation EpopulationF

Sun"elt E*2-$*2 populationF

(# G *# population

u7"er o S2Hs

''''

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Stores

8*J E1J8*F

$/ E1J8*F

Sales

( "n

(.( "n

Sales0Stores

(. 7n

1J1 7n

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W#-MR) -
<allenges aced as te co7pany gro6s •

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 )oo 7any players ad gotten into discounting Increasing siNe o Wal7art stores 6ic reuires uge invest7ents e6 state o te art distri"ution centers reuired &ull conversion o stores 6it H< scanning 6ic costs @*'''''
Way ead •

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 )e local econo7ies o scale is te co7petitive advantage o Wal-Mart and it sould not co7pro7ise upon it ust in drive to e+pand "eyond local 7arets  )e co7pany sould learn ro7 its co7petitors 6o lost in teir 7ove to e+pand "eyond teir geograpies

&'ANK ()U