Executive Summery 3
Introduction 4
Company Description 6
Services 7
Finance & Funding 8
Managerial Functions\ HR & Operation 10
Promotional Strategies\ Marketing 12
Taxation & Legal 13
SWOT Analysis 14
Conclusion 17
Reference List 18
Executive Summary
In what would well be
termed as a significant turning point in organized retailing and another step
towards global retail franchising in Bangladesh, Wal-Mart the world largest
retailer, has opted to enter in Bangladesh through a tie up with the Reliance
Int. Company via the master franchise route. Wal-Mart, of late, had also
acquired the Bangladesh government's approval to set up two offices in the
country. The company has received all necessary approvals, including one from
Bangladesh Bank. These two offices will be located at Dhaka to analyze business
opportunities in Bangladeshi retail sector. The retail industry provides of
people with hope and opportunity. For some, retail is a first job and chance to
gain skills to succeed in the workplace. For others, it’s part-time work –
students stretching their financial aid, a teacher working over the summer. And
for many, it is a chance to build a meaningful, long-term career. Wal-Mart is
really pulling out all the stops and going back to its core customers and
trying to invigorate its base. The opportunity to buy an asset at a low price
then immediately selling it on a different market for a higher price.
Walmart stores, Inc. operate retail
stores in various formats under 69 banners around the world and are committed
to saving people money so they can live better. We are the trust of our
customer’s everyday by providing a broad assortment of quality merchandise and
services at everyday low price (“EDLP”), while fostering a culture that rewards
and embraces mutual respect integrity and diversity.
Wal-Mart headquartered in Bentonville,
Arkansas, the company was founded by Sam Walton in 1962 and incorporated on
October 31, 1969. It has over 11,000 stores in 27 countries, under a total 55
different names. The company operates under the Walmart name in the US and
Puerto Rico. It operates in Mexico as Walmart de México y Centroamérica, in the
United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has
wholly owned operations in Argentina, Brazil, and Canada.
The company was publicly
traded on the New York Stock Exchange in 1972. In the late 1980s and early
1990s, the company rose from a regional to national giant. By 1988, Wal-Mart
was the most profitable retailer in the US and by October 1989 it had become
the largest in terms of revenue.
Walmart committed to
provide the best services to the customers. Walmart associates do a great job
of delivery value to customers through exciting merchandise, price leadership
and best-in-class shopping experience. In one hand Walmart can give the
customers daily needs. They give always low prices archives. It doesn’t mean
that they reduce the quality; they always maintain the original quality of each
and every product. We would present a case study of franchising Wal-Mart in
Bangladesh. Wal-Mart has adopted the cost leadership strategy to compete with
its competitors. We would be able to present the SWOT model and
identify
the strength, weakness, opportunity and threat for Wal-Mart. Walmart U.S
attracted nearly 140 million weekly shoppers to our stores and delivered net
sales of more than $279 billion. A group of Walmart veterans opened the first
Sam’s club in an effort to help small businesses thrive by providing access to
the large-scale efficiencies that made Walmart successful. Everything we do is
guided by our desire to help Members make smart decisions and to simplify their
lives. Walmart connect with Members by showing how a Sam’s Club membership can
meet and exceed their shopping needs and preferences. In Bangladesh, Walmart
will also have a first mover advantage, though it does not consider this as a
major benefit since it sees Bangladesh as a vast potential with enough room for
more chains of retailers. Global retailers do not want to lose the opportunity
and would like to consider an alternative Bangladesh entry. Though it may see a
back-door entry, but franchising is certainly the route they perceive, which
experts believe, might be a better strategy considering the diversity and the
political system in the country. As an important territory for expansion for
most international retailers, Bangladesh holds opportunity for not just the
country but also the region and an important sourcing country.
Company Description
In
our country we see a numerous types of business and also numerous brand name.
AS a developing country we can hardly consume the most updated product from
branded companies. One of the principal tactics in doing business in today’s
current environment is franchising. Wal-Mart the world largest retailer, has
opted to enter in Bangladesh through a tie up with the Reliance Int. Company
via the master franchise route. Reliance Int. Company started at 2010. The
consumer protection Act 2009 substantially impacts the development of
franchising in Bangladesh. Profile of promoters:
Name
|
Designation
|
No.
of shares
|
Cash
investment
|
Date
|
Salary
(yearly)
|
Muntasir
Ahmed
|
CEO/President
|
2,00,000
|
1300000$
|
1/2/2014
|
24,00,000
|
MD.Ashiqur
Rahman
|
CFO
|
1,
50, 000
|
1200000$
|
3/2/2014
|
21,60,000
|
Omar
Faruq
|
Vice
President Manufacturing
|
1,
00, 000
|
1000000$
|
7/2/2014
|
18,00,000
|
Mahmudul
Hasan
|
Vice
President Sales and Marketing
|
1,
00, 000
|
1000000$
|
10/2/2014
|
18,00,000
|
Senior management group
of high level executives that actively participate in the daily supervision,
planning and administrative processes required by a business to help meet its
objectives. The senior management of a company is often appointed by the
corporation’s board of directors and approved by stock holders. Our company
also take around off 200 employees including staff, sales manager, company
employees, and guards etc. We already opened our office in Dhanmmondi and
select Bashundhara Block-D for build up our Walmart store center. Business franchising is one of the safest
and most risk-free ways to start up and run a successful business. We arrange
our money from bank and other sources. Alternative borrowing or loan are available.
In, Bangladesh the franchisors need the legal certificates for their company.
The Companies Act, 1994 said every company must be registered by Bangladesh
Gov. Company Advisors (CA’s) play the most important role in the success of
the
Business Challenge program. Our company advisor is Mr. Iqbal who works at
transcom group company senior advisor.
Services
Walmart
is ready to provide all kinds of services. It Try to make our everyday life is
short to be small by providing all kinds of services to the needs. The company
does business in nine different retail format: super markets, food and drugs,
general merchandise store, small market, cash and carry store, discount stores.
Because of the first opening in Bangladesh we start in 3 format:
1. Discount stores: Give the
customer the opportunity to buy products at prices lower than those asked by
traditional retail outlets.
2. Super stores:
The store may sell general dry
goods in which case it is a department store, or may be limited to a particular
specialty or may also sell groceries, in which case some countries use the term
hypermarket.
3. Walmart market: We start with
the Walmart store customer can buy their daily essential product with discount
and low price from this store.Walmart
maintains that it is not selling at a loss or providing as an act of charity
instead, they are using the same mechanics of, mass destruction that it uses to
bring lower prices to other products.
We
start Walmart’s discount market store as a full service super market, including
meat and poultry, backed goods, delicatessen, frozen food, dairy produce and
fresh sea food, garden center, pharmacy, tire and cube express, optical center.
Wal-Mart Stores, Inc.
(Wal-Mart), operates retail stores in various formats globally. The Company
operates in three segments: the Wal-Mart U.S., the Wal-Mart International and
the Sam’s Club. Every Franchise company will require an initial fee. The
Reliance Int. venture will initially invest $20 million. Financial Requirements
for premises, Machinery, Office equipment, Training, etc.
Premises
|
2million$
|
Machinery
|
3million$
|
Office equipment
|
5million$
|
Training
|
1million$
|
Other
|
2million$
|
Total=
|
13 million$
|
Ø We
collect money from bank as a loan as 18% of our financing and from friends and
family for all other sources. We also use our personal credit cards.
Ø We
also add a partner who has a fund to invest may benefit our business. Investors
may also have business experience.
Ø We
also need some individual’s investors who invest in early stage. This
capitalist typically back companies in high technology industries such as
biotechnology. This capitalist required a combination of extremely rare
qualities, like innovative technology, potential for rapid growth, a
well-developed business model and an impressive management team.
Ø We
also finding wealthy private investors for start-ups in need of capital.
Ø If we fall into financial crisis Insurance
company also available for our grant aid.
Ø We
use our assets to franchise Walmart in Bangladesh.
Source
|
Percentage
|
Self-financing
|
82%
|
Loans from
family and friends
|
22%
|
Bank
loans
|
18%
|
Line of credit
|
18%
|
Venture
capital
|
8%
|
SBA or other
government funds
|
4%
|
We
collect money from bank as a loan as 18% of our financing. We already negotiate
with them. Our negotiable bank is HSBC Bank. There are many bank in our country
but HSBC bank ready to give us loan to bring Walmart in Bangladesh. We will
submit our demonstrable evidence which the franchiser we chosen is financial
secure. The bank will also take into account how well established the franchisor
is, and how we are been in business for. Loan repayments are made in the form
of equal yearly instalments (EYI).
Profit
Loss forecast:
Performance
cash flow statement
New
Year, projected
Projected income $1,
00,000
Taxes -$20,000
Utilities -$10,000
Cash flow $65,000
Wal-Mart is one of the leading multinational retail
store. Diversity is one of the characteristics of Wal-Mart. Wal-Mart founder
Sam Walton’s goal was to help people live better by saving money.
For any organization management is an essential tool
for the success. External and Internal factors are affected all the function of
management. There are several factor which affects all management functions.
Managers
must to learn how to plan, organize, lead and control to secure the
organization. These are all external factors.
Planning: Management uses diversity in planning.
Effective planning helps a business focus its visions, avoid costly mistakes,
and size opportunities .Wal-Mart always start it’s every mission with a proper
planning. It should be flexible and responsive to changes in the business
environment. Lack of supplies affects the planning because without proper
supplies it makes it difficult for staff to prepare for an event.
Organizing: Once plans have been developed, the next step
in management process typically is organizing. Diversity and ethics are seen in
organizing function. In Wal-Mart ethics plays an important role at the time of
organizing function.
Staffing:
Wal-Mart first determined what type of people it should hire. Thru the ethical
code followed, Wal-Mart hires (Include, recruiting, training employees,
selecting, developing, set performance stand, compensating counseling, and
evaluating and performance appraisal), retains and promotes the right people
leadership roles.
Leading:
Leading might include training, setting up schedules, delegating certain tasks
and monitoring progress. Wal-Mart is a widely admired worldwide leader in the
retail industry and the employer.
Controlling: Wal-Mart use this controlling function to
evaluate their organizations performance against its objectives. Wal-Mart
follow the four basic steps in controlling. These are,
# establishing performance standards,
# monitoring actual performance
# comparing actual performance with established
standards
# making corrections if necessary
Along with these four functions of management. There
are also internal factors that can make or break the company. These are
marketing, finance, accounting, production, operations, and research,
development and computer information systems of the business.
Compensation-
Employees receive compensation from company in return for work performed.
Though we are bringing franchise of Wal-Mart, we follow Wal-Marts Ethics of
Wage and hour. We are serious about to comply with all applicable laws and
regulations dealing with wage and hour issues, where is including off-the-clock
work, meal and rest
breaks
,overtime pay, termination pay, minimum- wage requirements, wages and hours of
minors and other subjects related to wage-and-hour practices
Company
organogram:
|
Chief
Executive Officer/president
|
|
Vice President & chief Financial
Officer
|
|
Vice
president Sales & Marketing
|
|
Vice
president Manufacturing
|
|
National
Sales Manager
|
|
Ad.&Marketing
Research Director
|
|
Employees
|
|
Employees
|
|
Quality
Control
Supervisor
|
|
Employees
|
|
Production
Supervisor
|
|
Employees
|
|
Employees
|
|
Assistant
VP- Finance
|
|
Accounting Supervisor
|
|
Employees
|
Walmart
may be the world’s biggest retailer, but has lost a bit of its swagger is
recent years. The chain has been cutting costs so much that it’s struggling to
keep some shelves stocked and scrambling to keep up in the instant-delivery age
of Amazon. Dollar stores are eating into its low-end customer base; its
higher-end urban stores have been slow to emerge; and its international
expansion has had some high-profile setbacks. In Walmart's thinking, there are
three types of shopping trips: There's the stock-up mission, which brings
families to Walmart's 3,200 nationwide Supercenters. There's the basic grocery
run, when shoppers want to go someplace nearby and more navigable, such as one
of Walmart's 300 "neighborhood markets." And there's the
"immediate access" stop, when shoppers head for the traditional
convenience store. That convenience stop is the segment Walmart hasn't really
touched, except for a handful of "express" stores in Arkansas.
Ø Walmart
is not particularly known for their impeccable customer service. Even further,
Wal-Mart lacks in cleanliness and breadth of product lines.
Ø Walmart’s
online marketing campaign covers all facets of strategy, but through all the
apparent strategies, it is their aggressiveness that has highlighted and
broadened their need to succeed and remain at the top of the industry in
retail.
Ø
Walmart’s
marketing consists of flooding the market with their presence. This is alarming
for individuals who find Wal-Mart’s business practices alarming.
Ø Walmart
offer many types of products, with a relatively comfortable list of options. As
well, Sam’s Club offers an alternative for those who prefer bulk. And with such
a strong base of customers, they are able to set the prices for what they pay
for.
Ø Walmart’s
online marketing is simply an extension of their physical stories, allowing
individuals to purchase directly through the site.
Ø Walmart’s
marketing has focused on quantity, and delivering variety in one location.
Ø Walmart
can offer a company a prime opportunity to get their product to the masses-
even if they lose money doing so.
Ø Walmart,
have focused a lot of resources on social media campaigns this is because it is
one of the best types of marketing due to its consistent results.
Taxation & Legal
A franchise agreement is a legal, binding contract between a franchisor
and franchisee. According to law of franchise business in Bangladesh we have to
pay approximately $30000 as royalty. Franchise agreement is a legal, binding contract between a franchisor
and
franchisee. We give our all taxes according
to the rule of Income-tax Ordinance,
1984 - Laws of Bangladesh says that Every publicly Trade company 27.5% and traded company (excluding Mobile Operator
Company) declares more than 20% dividend, 10% rebate on total tax allowed.
SWOT Analysis
An analysis of
Wal-Mart’s strengths, weaknesses, opportunities, and threats, also known as a
SWOT Analysis, is imperative in order to understand Wal-Mart’s strategy.
“Wal-Mart Stores operated retail stores in various formats across the world.
Strengths:
ü A market
leader with unprecedented scale gives a competitive advantage: Largest
retailer in the world. By January 2010, More than $400 billion in revenue, $24
billion in operating income, 8,500 stores, and nearly 1 billion square feet of
space. There is no competitor of comparable size.
ü
Wal-Mart
is a powerful retail brand. It has a reputation for value for money,
convenience and a wide range of products all in one store.
ü Low
cost leadership enabling Walmart to offer products at low price
points: The Company offers its grocery products at prices about 12% lower than
the market. Wal-Mart constantly flexes its bargaining muscle to lower prices. This
strategy ensures a steady, recurring stream of customers for its goods, making
Wal-Mart synonymous with inexpensive and this keeps constant pressure on
competitors.
ü Recognize as the industries leader in technology.
Opportunities:
ü New
locations and store types offer Wal-Mart opportunities to exploit market
development. They diversified from large super centers, to local and mall-based
sites.
ü Opportunities
exist for Wal-Mart to continue with its current strategy of large, super
centers.
ü Timely
feedback from changes in Distribution and supply problems are caught early.
ü Would
make organization and inventory more efficient
ü In-depth
marketing research would allow them to their consumers need.
Threats:
ü Small
business that could not afford to use the chip technology could got out if
business.
ü
Increasing
competition from brick and mortar and online competitors. As like Walmart do,
some Company like Target, Costco, Amazon and Tesco (in UK) are putting huge
efforts to eliminate price differences Except the lower prices,
ü Increasing
resistance from local communities. Walmart superstores have a negative impact.
One is on local retailers and another is on local communities.
ü Rising
commodity product prices. Rising commodity prices not only squeeze Walmart’s
profit margins but also erode its competitive advantage.
Weakness:
ü
Despite I many benefits, there’s a commitment to maintaining the
infrastructure. This would cost a lot of money and taka a lot of people to
maintain upkeep.
ü
Metal and water can interrupt the frequency of the chips making them
defective on some product.
ü
The company is global, but has a presence in relatively few countries
Worldwide.
ü
Wal-Mart is the World’s largest grocery retailer and control of its
empire, despite its IT advantages, could leave it weak in some areas due to the
huge span of control.
All in all, by
implementing these important strategies successfully, walmart has become from a
single store the biggest retailer in the US and to the biggest company in the
world. The cost management strategy of walmart will create an operational model
with the lowest cost which will increase the margin of profit and financial
statements. A strong local partner would work to the advantage to evolving a
Bangladesh-specific business model and also build Bangladesh’s understanding in
the master franchise operations. As an important territory for expansion for
most international retailers, Bangladesh holds opportunity for not just the
country but also the region and an important sourcing country. Wal-Mart would
be more global and e-commerce expansion. In addition, on-line shopping is
another market that Wal-Mart should focus on. Nowadays, more people are getting
used to shop on line due to the changing of our lifestyle. Because franchising
typically does not involve investing in equities, the Bangladeshi Government
used to put less focus on such business. But the government came to find that
franchises are a good business model for Bangladesh to help solve its job
problems and its scattered private capital. Franchising makes up for the
commercial inexperience of the Bangladesh franchisers by linking their
investments to completed training within a well-tested operating system.
Websites:
v Wikipedia.
v Walmart Official Website
v Bloomberg Business Week
v Franchising rules in Bangladesh
v Franchise cost
Book
v Louis E. Boone and David L. Kurtz
CONTEMPORY BUSINESS (
International Student Version 14th Edition )
v Walmart annual report
v Walmart (2013). Walmart Corporate. Available at:
http://corporate.walmart.com/?povid=P1171-C1093.2766-L4
