Wal-Mart

Wal-Mart

Shaheed Rogers

Centenary College

GBA 690, Seminar: Business Strategy and Policy

Professor Norman Stafford

March 3, 2010

Case Analysis: Wal-Mart

Introduction

Wal-Mart is the largest retail company in the world. The company operates retail stores in various formats worldwide.Wal-Mart offers a wide assortment of merchandise at every day low prices (EDLP) in its retail stores. In addition, the company offers its products through various e-commerce websites including walmart.com and samsclub.com. Wal-Mart operates three business segments:Walmart US, Sam's Club, and the international segment. The company also generates revenues from a fourth, non-operating segment named “others” which includes a variety of income categories such as Sam's Club membership fee revenues, tenant income and financial services income. Wal-Mart US operates three different retail formats in the US—discount stores, supercenters and neighborhood markets. The segment has retail operation in all the 50 states in the US.Wal-Mart operates 891 discount stores, each with an average store size of 108,000 square feet, in 47 states. Wal-Mart operates 2,612 supercenters (average size of 260,000 square feet) in 48 US states and 153 neighborhood markets (average sixe of 62,000 square feet) in 16 US states (www.lexisnexis.com.centhsally.centenarycollege.edu).

In addition, the segment also markets its products through its e-commerce website walmart.com. The stores operates by Wal-Mart US offer branded and private label merchandise in various product categories including grocery, entertainment, electronics, apparel, health and wellness, and home furnishing and housewear. These stores also offer financial services such as money order sales, wire transfers, check cashing and bill payment. To support the retail operations of the Walmart US segment, Wal-Mart operates 121 distribution facilities across the US, of which the company owns 106; the remaining are owned and operated by third parties. A few of these distribution centers also service Wal-Mart's Sam's Club for certain items. During FY2009, these distribution centers shipped approximately 81% of the merchandize sold by Wal-Mart US. The remaining merchandise was shipped directly by the suppliers to the company's stores. Sam's Club operates Wal-Mart's warehouse membership clubs in the US; it also operates the website, www.samsclub.com.Wal-Mart operates 602 Sam's Club (average store size of 132,000 square feet) in 48 US states. Sam's Club serves both individuals and businesses (www.nytimes.com/2006).

The international segment comprises wholly owned subsidiaries operating in Argentina, Brazil, Canada, Japan, Puerto Rico and the UK.Wal-Mart's majority-owned subsidiaries operate in five countries—Central America, Chile and Mexico; the company's joint venture operation in India and China; and other controlled subsidiaries in China.The operating formats vary from country to country, and include discount stores (Canada and Puerto Rico), supercenters (Argentina, Brazil, China, Japan, Mexico, Puerto Rico and the UK) and Sam's Clubs (Brazil, Canada, China, Mexico and Puerto Rico). To support the international segment's retail operations, Wal-Mart utilizes a total of 146 distribution facilities located in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the UK and two export consolidation facilities in the US. Wal-Mart owns and operates 34 of these facilities and the remaining facilities are owned and operated by third party ...