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Presentation by Pratibha Dhir Roll No PGDFM 06
Presentation by Pratibha Dhir Roll No PGDFM 06
Pratibha Dhir
Roll no PGDFM 06
INTRODUCTION
Walmart store inc. the largest retailer and
the largest company in terms of revenue.
Sam Walton ,the founder of Wal-Mart,
opened the first Wal-Mart store in Rogers,
Arkansas in 1962. The company is publicly
traded at the New York Stock
Exchange under the symbol WMT and has its
headquarters in Bentonville, Arkansas.
Outline
• History Overview
- Vision, Mission and Goals
•Internationalization
-Driving Forces
-Entry decisions
-Examples of success and failure
•Suggestions
History Overview
• 1962: Walten Brothers opened fist Walmart in
Arkansas
• 1970: Walmart became public
• 1990: 1st National retailer
• 1991: International Expansion
• 1993: Creation of “Great Value”
• 2003: Largest corporation in the world
• 2012: 50th Anniversary
Mission Statement, Vision, Goals, & Purpose
Mission Statement:
To help people save money so they can
live better
Goal:
Becoming in an international brand
Vision:
“If we work together, we’ll lower the Advertising slogans:
cost of living for everyone…we’ll give
Save Money. Live better
the world an opportunity to see what
it’s like to save and have a better life.
Customer Target
• “Wal-Mart's targeted demographic:
– Modest incomes
– Shoppers interested in prices
• But the customer base is changing
Internal & External
Analysis
Firms’ Value Chain
General administration
Procurement
Human resources:
- Based on Interaction practices between company and employees
-Low pay but other benefits (health care plans, retirement plans, or promotion opportunities)
-2.2 million associates globally.
-Every time we open a supercenter, we provide roughly 300 jobs
-Women57% of our U.S. workforce, 27% of corporate officers, and 20% of our Board of directors.
Techonology development: It is the key factor of the company. It constitutes a competitive advantage
against competitors.
- Computer-based technology
POS (Point of sales)
system Satellite System
Procurement:
-Wal-Mart deals directly with manufacturers, by passing all intermediaries.
- EDI : Electronic data interchange
Difficult Difficult
Competency Valuable Rare to to Conclusion
imitate substitut
e
Integrated technology of supply chain Yes Yes Yes Yes Sustainable Compt. adv
STRENGTHS WEAKNESSES
INTERNAL FACTORS
Low
Europe:
•Mature Markets
•High Rivalry
•Lack of strong
costumer relationship
What markets to enter?
Asia:
•Most distant
geographically
• Large population
•Emerging Markets
Walmart International
What Strategy to follow
Trans
Global
National
Inter Multi
national domestic
Low High
Local Responsiveness
Mode of entry of International Expansion
Mode of entry of International Expansion
Year Country Mode of Entry
1991 Mexico 50% Joint Venture Cifra
1994 Brazil 60% Joint Venture Lojas Americana
1994 Canada Acquisition Woolco (weak player)
1995 Argentina Wholly owned Susbidiary
1996 China New opening, JV, Acquisition
1998 South Korea Adquisition
1999 U.K. Acquisition of ASDA
2002 Japan Acquisition Seiyu
2002 Germany Acquisition of Wertkauf and Spar
2007 India Joint Venture With Bharti Enterprise
2011 Southern African Countries Acquisition of Massmart Holding Limited
Examples of International Success
• Mexico:
– Largest Walmart’s foreign presence (68%)
– 38% Retail Market Share in Mexico
• Canada
– One of the most successful international expansion
– Acquired Woolco Stores and changed structure
• South Korea
– Very demanding customers
– Did not customized to market
– Big companies also fail in South Korea
Key Success Factors
• A supply chain with integrated technology
• Decentralized operations
• Worldwide learning:
– Advantages of interconnected economies.
• Adaptation:
– To locally customize processes and services
We Save People Money So They Can Live Better
Make every day easier Change how Deliver results and Be the most
for busy families we work operate with discipline trusted retailer
44
Flipkart Group Investment Fits within Walmart’s International Strategy
45
Flipkart Group Transforms Our eCommerce Opportunity in a Critical Growth Market
Attractive Market & Growth Opportunity One of the world’s largest and fastest growing markets
Market
The Local Leader $7.5 billion1 annual GMV and 54 million active customers
Experienced & Committed Management Team Management with strong in-country expertise
Flipkart
Strong Partnerships Strong shareholder partners with successful track records of investments in Asia
Creating Value for all Stakeholders Long-term value for shareholders, associates, Indian economy & communities
1. Gross Merchandise Value or GMV as defined by Flipkart represents the total dollar value of orders processed on its marketplaces in the period without reduction for returns.
46
India Is a Compelling Growth Market with Long-term Potential
79% 58%
Mobile percentage of internet Estimated smartphone
traffic, vs. global average of penetration by 2020 vs.
50%4 30% in 20175
1. Source: CAGR calculated from WorldBank reported historical GDP data 2006 to 2016 (last reported) 4. Source: Statcounter 2017 data in PlanetRetail RNG “Ecommerce & Digital Ecosystem Management”
2. Source: Goldman Sachs “India` Consumer Close-up” which cites Euromonitor; UN population estimates 5. Source: Deloitte “Digital Media: Rise of On-Demand Content”
3.Source: Internet Live Stats 2016 data in PlanetRetail RNG “Ecommerce & Digital Ecosystem Management;” India market size defined
by number of users
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India eCommerce Projected to Grow 4x Faster Than Total Retail over Next Five Years
6%
5%
4%
eCommerce Penetration
2.1%
3%
1.8% 1.8%
2%
1.0%
1% 0.4%
0.2% 0.3%
0% //
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY23E
Sources: Bain & Company estimates based on primary and secondary sources, and shall not be construed as definitive predictions or forecasts
1. Excludes services
48
Flipkart Group Is the Local Leader in India eCommerce
Flipkart
Leading India’s Technology that digital
consumers trust
eCommerce transformation
49
Flipkart Group Is Positioned for Significant Growth
$7.5B
$7.5B1
Annual GMV
54M
54M
Active customers
261M
Units sold in FY18
FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18
Note: Exchange rate $ / INR 65; Fiscal year ends 31-Mar; FY2015 has 8 months of Myntra & FY2016 has 8 months of Jabong. FY 2018 does not include eBay
1. Gross Merchandise Value or GMV as defined by Flipkart represents the total dollar value of orders processed on its marketplaces in the period without reduction for returns.
2. Active customers are customers transacting at least once in the last 12 months. Total does not exclude customer overlap between enti ties
50
Flipkart Group Maintains Leading Position in Fast Growth Categories with
Significant Upside
Flipkart Group
Category Rank by
GMV Share
#1 #1 #2 #1
Source: Wall Street analysts and Bain & Company estimates based on primary and secondary sources
and shall not be construed as definitive predictions or forecasts
51
Experienced and Committed Management Team with Strong Market and
eCommerce Expertise
2017 CEO of FlipkartGroup 2017 CEO of Flipkart 2015-2017 CEO of Myntra 2014-2017 Founder and CEO of
2016 CEO of Flipkart 2016 key positions with Flipkart 2000-2015 Director, Managing Partner, PhonePe
2007-2016 COO of Flipkart 2006-2016 key positions with Tiger McKinsey Chicago, Shanghai, Taipei, 2011-2014 VP and SVP at Flipkart
India
B. Tech in Comp. Engineering from IIT- Global Management and 2009-2012 Founded Mime360 as digital
Delhi eBay Asia-Pacific MS from University of Michigan distribution platform
MBA from AIM, Philippines MBA from Wharton BusinessSchool
52
Walmart Is Working with Strong Shareholder Partners
53
Walmart and Flipkart Group Create Value for Everyone
• Quality, affordable goods • Better opportunities • Job creation • Attractive growth market
• Easier and quicker ways • Stronger business • Support farmers and • Strengthens global
to shop develop supply chains portfolio
• Broad product assortment • Supports women • Generates long-term
entrepreneurs value
• Executes on committed
international strategy
54
Transaction
Details and
Guidance
55
Transaction Overview and Financial Highlights
• Walmart’s approximately $16 billion investment includes $2 billion of new equity funding, which will help Flipkart achieve
its growth potential.
• Walmart initial ownership stake of approximately 77%.
• Remainder of ownership held by Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent
Transaction Holdings Limited, Tiger Global Management LLC, and Microsoft Corp.
Structure • While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition
to transition into a publicly-listed, majority-owned subsidiary in the future.
• Closing expected later in FY19, subject to regulatory approval.
• Finance the investment with a combination of newly issued debt and cash on hand.
• Flipkart’s financials will be reported as part of Walmart’s International businesssegment.
• Assuming the transaction closes at the end of the second quarter of this fiscal year, Walmart expects a negative impact
to FY19 EPS of approximately $0.25 to $0.30, which includes incremental interest expense related to the investment.
• In FY20, as we look to accelerate growth in this important market, Walmart anticipates an EPS headwind in total of
around $0.60 per share, comprised of:
Financing and
o Operating losses of approximately $0.40 to $0.45 per share, assuming minimal tax benefit for the losses in the near to
EPS Impact mid term. This amount includes about $0.05 per share related to amortization of intangible assets and depreciation of
short lived assets resulting from purchase accounting, which will only last for a few years post-closing.
o Interest expense of approximately $0.15 per share.
• In the mid to long term, as the business scales and efficiencies are realized, we expect losses to decline and returns to
improve.
• Given Walmart’s financial strength, we anticipate the continuation of our current share buyback program, while
maintaining our strong credit profile.
56
Creates Significant Long-Term Value for Shareholders
57