1. presentation on

2. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Agenda Introduction of Wal*Mart Ivy Cost advantage & drivers Cora & Shirley Sustainability of competitive advantage Kelvin & Michelle Recommendations & conclusion Stephanie & Louise  Agenda  Business Idea

3. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Business Concept Established in 1969 by Sam Walton Successful retail chain 33% ROE 35% sales growth Different retail formats Discount store Sam’s Club Supercenter Principles Cost advantage Low price Serving customers  Agenda  Business Concept

4. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000 Drivers of Cost Advantage Economies of scale Economies of learning Production techniques Product design Capacity utilization Input costs Managerial efficiency  Economies of Scale  Economies of Learning  Production Techniques  Product Design  Capacity Utilization  Input Costs  Managerial efficiency  Introduction  Cost Advantage  Sustainability  Recommendations

5. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Economies of Scale  Economies of Learning  Production Techniques  Product Design  Capacity Utilization  Input Costs  Managerial Efficiency Economies of Scale In Wal*Mart … Buying in bulk Building own warehouse Economies of Learning Repetition to gain experience In Wal*Mart … Experience on handling systems Internal & external communication  coordination & performance

6. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Economies of Scale  Economies of Learning  Production Techniques  Product Design  Capacity Utilization  Input Costs  Managerial Efficiency Production Techniques Production method & business process  efficiency &  defects In Wal*Mart … Cross docking Different IT systems Product Design Designing products & services to economize costs & materials In Wal*Mart … Cross docking Pricing system

7. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Economies of Scale  Economies of Learning  Production Techniques  Product Design  Capacity Utilization  Input Costs  Managerial Efficiency Capacity Utilization In Wal*Mart … Cross docking Input Costs In Wal*Mart … Located in rural areas & small towns Non-union labor & 30% part-time labor High bargaining power Supplier relationship with network linkage Managerial Efficiency In Wal*Mart … Profit sharing “Store within Store” “Shrink Incentive Plan”

8. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Obscuration  Undermining Incentives  Causal Ambiguity  Resource Immobility Obscuration Availability of financial information Difficulty in withholding profitability Undermining Incentives Deterrence: large scale as threatening signal Preemption: locating next to discount stores Casual Ambiguity Multiple sources of competitive advantage Difficulty in identifying KSFs

9. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Obscuration  Undermining Incentives  Casual Ambiguity  Resource Immobility Resource Immobility Intangible resources Staff Motivation Shrinkage Incentive Plan Profit sharing plan Communication Information sharing No superstar “Yes We Can Sam” Autonomy Setting price individually “Store within Store”

10. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations  Obscuration  Undermining Incentives  Casual Ambiguity  Resource Immobility Resource Immobility Tangible resources  Intangible resources Tangible: EDI Forecasting, planning, replenishing Electronic invoicing Intangible: development of partnership 300 vendors 90% of sales value

11. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations US Growth Emphasize on Supercenter Growing sector Focus on customer service Large target group One-stop shopping  US Growth  Global Growth  Virtual Growth  Conclusion

12. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Global Growth  US Growth  Global Growth  Virtual Growth  Conclusion

13. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Global Growth  US Growth  Global Growth  Virtual Growth  Conclusion

14. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Virtual Growth Web store Available in US and Canada first Reasons IT systems and logistics Reputation Increasing store traffic Flexible, simple, convenient shopping  US Growth  Global Growth  Virtual Growth  Conclusion

15. By Cora, Ivy, Kelvin, Louise, Michelle, Shirley, Stephanie 2000  Introduction  Cost Advantage  Sustainability  Recommendations Conclusion  US Growth  Global Growth  Virtual Growth  Conclusion Sustainable competitive advantages Wal*Mart: number 1 in retailing Focus on Supercenter Enter China market Go online

16. presentation on