Presentation on theme: "How to Compete & Thrive in a Walmart World Michael Bergdahl International Speaker, Author & Turnaround Specialist Quito, Ecuador “Picking Walmart’s P.O.C.K.E.T.S”"— Presentation transcript:
How to Compete & Thrive in a Walmart World Michael Bergdahl International Speaker, Author & Turnaround Specialist Quito, Ecuador “Picking Walmart’s P.O.C.K.E.T.S” SESSION #1
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 Annual sales exceed US$444 billion Profits – US$13.2 billion Profits – US$13.2 billion 200 million customers per week 200 million customers per week
Walmart Big Facts - 2.3 million+ employees - 10,200 stores - 53 different banners in 27 countries - 70% of goods in Walmart are from China - 40% of Walmart’s products are private label
Walmart Big Facts - 89% of the USA public shop its stores annually - 90% of Americans live within 15 miles - Walmart’s Stock has split 11 times - Failed in South Korea & Germany
Walmart Sales in US$ Billions 20102011 % USA260264+1.5 USA260264+1.5 International109126+15.2 International109126+15.2 Sam’s Club 49 54+8.8 Sam’s Club 49 54+8.8 TOTAL418444+5.9 TOTAL418444+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
How to Compete & Thrive in a Walmart World “Picking Walmart’s P.O.C.K.E.T.S” PRICE
“How did Walmart turn its Every Day Low Price Strategy into such a powerful competitive advantage?” Price Strategy Question:
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
“Differentiate your products, provide great service and don’t even think about trying to compete with Walmart on price” Price competition with Walmart
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 Michael Bergdahl International Speaker, Author & Turnaround Specialist A.K.A. - Picking Walmart’s P.O.C.K.E.T.S Copyrighted Material 2012 OPERATIONS
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” “Walmart is a technology & logistics driven company not a merchandise driven company” Cross Docking No Warehouses 2 nd largest IT systems in the world 7000 truck fleet Spoke & Hub Distribution System
Automated Replenishment “Just in Time Inventory” 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