How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
SESSION #1
Michael Bergdahl
International Speaker, Author &
Turnaround Specialist
Quito, Ecuador
1962
Sam Walton
The Critic
Sam Walton’s Secret:
US$100 Billion
His goal for Walmart was to be the best - not biggest!
“Bird-Dawg”
Walmart Headquarters
Bentonville, Arkansas
X
Sam Walton
hunting with his
“bird dogs”
My Background
25 Year Human Resources Professional – “SPHR”
Worked at PepsiCo’s Frito-Lay Division
Director of People at Walmart – Worked with Sam Walton
Turnaround Experience at 2 companies
Author of 5 books
International Speaker
Live on a small farm in Pennsylvania
Wife & 2 Children & Dog
Walmart Big Facts
• Annual sales exceed US$444 billion
• Profits – US$13.2 billion
• 200 million customers per week
Walmart Big Facts
- 2.3 million+ employees
- 10,200 stores
- 53 different banners in 27 countries
- 70% of goods in Walmart are from China
- 40% of Walmart’s products are private label
Walmart Big Facts
- 89% of the USA public shop its stores annually
- 90% of Americans live within 15 miles
- Walmart’s Stock has split 11 times
- Failed in South Korea & Germany
Walmart Sales in US$ Billions
• USA
• International
• Sam’s Club
2010
260
109
49
2011
264
126
54
%
+1.5
+15.2
+8.8
• TOTAL
418
444
+5.9
Sam Walton never wanted
Walmart to be the biggest . . .
Wal-Mart’s Global Strategy
“Wal-Mart’s priorities are to
dominate North America
first, then South America,
then Asia, & then Europe.”
Walmart Executive
“Anyone that sells
anything that we do
is a competitor”
Walmart Executive
Big Question #!
Have you
shopped at
Walmart?
Big Question #2
Walmart in
Ecuador?
Walmart Banking
How Walmart
created so much
interest in
South America.
How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
PRICE &
OPERATIONS
Copyrighted Material 2012
“Walmart / Sam Walton’s Strategies & Tactics for Business
Success in Tough Economic Times©”
Session 1
 What Businesses can learn from “The Walmart &
Sam Walton Way”
 The Seven Strategies of Walmart
 Explanation of P.O.C.K.E.T.S. Niche Strategy
 Best Practices to Compete / Survive, and Thrive
“How To Compete and Thrive
in a Walmart World”
“Picking Wal-Mart’s POCKETS”
Price
Operations
Culture
Key Item Promotion/Product
Expenses
Talent
Service
P.O.C.K.E.T.S.
Strategies of the
Worlds Largest
Company
Price
Operations
How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
PRICE
Price Strategy Question:
“How did Walmart turn its
Every Day Low Price
Strategy into such a
powerful competitive
advantage?”
Answer:
“While others focused on how much
they could charge for their products,
Sam Walton focused on how little he
could charge.”
Sam Walton’s Discounting Principle
Buy an item for 80¢
Price it at $1.00
Sold 3 times as much as he could at $1.20
He made ½ the profit per item
But he sold 3 times as much
Generating greater profits overall
Walmart’s Pricing Strategies
1. Every Day Low Prices
2. Roll-Back
3. Special Buy Merchandise
“Walmart’s merchandise is on sale every day”
Walmart’s Guaranteed
Lowest Price
Accomplished via
Shopping Cart Comparisons
The Walmart Effect
Walmart’s low grocery
prices save USA
consumers $3100 /yr
Result: 31 Regional Grocers driven out of business
The Power of Low Prices
Walmart
Interview
on 20/20
Walmart’s Pursuit of
Low Prices
Buying at lowest prices
Controlling their own expenses
Get suppliers to lower expenses
Pass savings along to customers
Price competition with Walmart
“Differentiate your products, provide great
service and don’t even think about trying to
compete with Walmart on price”
Leverage your strengths
You’re not a discounter . . .
So don’t try to act like a
discounter!
Create Competitive
Pricing Advantage
Walmart cuts out the
middleman . . .
Buys from the source!
Pricing Ideas For You
 Are you leveraging location, convenience & service?
 How does your pricing structure compare to others?
 Do you offer Value equal to or better than your prices?
How to Compete & Thrive in
a Walmart World
A.K.A. - Picking Walmart’s P.O.C.K.E.T.S
OPERATIONS
Michael Bergdahl
International Speaker, Author &
Turnaround Specialist
Copyrighted Material 2012
Operations Strategy Question:
“What makes Walmart’s Store
Operations so unique?”
Answer:
“Walmart is a Logistics,
Distribution,Transportation, and Technology
Driven Company that also has Retail Stores!”
“Commoditization”
• “Walmart is a technology &
logistics driven company
not a merchandise driven
company”
2nd largest IT systems
in the world
Cross Docking
No Warehouses
7000 truck fleet Spoke &
Hub Distribution System
Automated Replenishment
“Just in Time Inventory”
“Walmart’s inventory turnover goal for
suppliers is 100% every 60 days”
Like a Bank – Walmart makes money on money!
Hurricane
Katrina
“Walmart’s trucks
arrived in New
Orleans days before
the United States
Federal Government!”
Fact: College Students worldwide study Walmart’s Renowned Logistics
Benchmarking Best Practices
Vendor Partners
GE
P&G
Disney
FedEx
Pillars of Total Quality
Continuous Improvement
Productivity
Customer Service
Empowering People
Cost Control
Picking Walmart’s POCKETS
Self Assessment Inventory
Operations Ideas For You
 High
expectations / Hold People Accountable.
 Save your way to prosperity
 Simplify everything you do.
HOW TO COMPETE &
THRIVE IN A
WALMART WORLD
Lions or
Gazelles?
Questions
?????????
Walmart’s Best Practices LinkedIn Group
www.michaelbergdahl.net
How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
SESSION #1
Michael Bergdahl
International Speaker, Author &
Turnaround Specialist