MGMT 495
Summer 2011:
Kelly Bossolt
Marta Kovorotna
Sarah Smith
Executive Summary
 Financial Analysis
 External Analysis
 Internal Analysis
 Technology
 Human Capital
 Competitive Advantages
 Recommendations
Financial Analysis
 As of 2004 compared to top competitors
Company:
Revenue:
Home Depot
$65 Billion
Target
$50 Billion
Walmart
$250 Billion
Harvard Business School, Wal-Mart, 2005, David B. Yoffie
Financial Analysis
 As of 2011 compared to top competitors
Company:
Revenue:
EBITDA:
Home Depot (HD) $67 Billion
7.66B
Target (TGT)
$67 Billion
7.35B
Sears (SHLD)
$43 Billion
1.22B
Walmart (WMT)
$421 Billion
33.46B
http://finance.yahoo.com/
Financial Analysis
 Walmart’s net sales over the years (In Billions):
Net Sales
500
400
300
200
100
0
FY07
FY08
FY09
http://walmartstores.com/sites/annualreport/2011/sams_club.aspx
FY10
FY11
Financial Analysis
Sales By Segment (In Billions)
50
109
260
http://walmartstores.com/sites/annualreport/2011/sams_club.aspx
Walmart US
International
Sam's Club
External Analysis
 Wal-Mart – greedy for control
 Sophisticated ecosystem
 The growth feeds the
ecosystem, the ecosystem
powers the growth
 Market capitalism
 More than 30% of the entire
market
 Customers vote Wal-Mart
with wallets
 Suppliers vote with their
products
External Analysis
 Consumers
 One stop shoppers
 90% Americans live within 15
miles
 93% US households
shopped in Wal-Mart
 Save up to $900 a year
 Conflicted customer
 Suppliers
 Huge part of ecosystem
 Weak bargaining power
 Failure to comply
 Vlasic example
 Procter & Gamble and
Gillette 16% of their business
External Analysis
 Competition
 Target, Home Depot, Costco
 Best Buy, Radio Shack
 Sears and Kmart merger
 Environment
 Destroying more jobs than
creating
 Sustainability
 Eliminate 20 million metric
tons of greenhouse gas
(GHG) emissions from WalMart's global supply chain by
the end of 2015.
 Zero Waste
 More sustainable products, at
more affordable prices
Internal Analysis: Technology
 Bar Coding
 Share info with in and across stores and to suppliers
 Electric Data Interchange (EDI)
 Forecasting, planning, replenishment, shipping
 Retail Link
 Required by suppliers – point of sale technology
Internal Analysis: Technology
 Radio Frequency Identification (RFID)
 Reduced shrinkage, inventory tracking, time saver
 Online
 Pushed boundaries
 New products – music store, internet access
Internal Analysis: Human Capital
 Criticisms
 Low pay, heavy part time reliance
 No unions
 Bad evaluation procedures
 Promote
 Good working conditions
Competitive Advantage
 Technology
 Name
 Fortune’s most admired company in 2003
 Philanthropic efforts
 International mergers and acquisitions
 Smart at entering potential markets
 Captures the culture and adapts (mostly)
Recommendations
 Keep investing in Technology
 Employee incentives
 Don’t force culture too fast internationally