STOCKHOLDERS DEBRIEF

Walmart

Overview of Walmart
Walmart Stores, Inc. operates retail stores in various formats around the world and is committed to saving people money so they can live better. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (EDLP), while fostering a culture that rewards and embraces mutual respect, integrity and diversity. EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activities. Our focus for Sams Club is to provide exceptional value on brand name and private label merchandise at members only prices for both business and personal use. Internationally, we operate with similar philosophies.

Mendelows Matrix
To what extent the stakeholder has power to impose it wants? Low Power High C D Level of interest Low High Stockholder s B How interested the stakeholder is to impress the expectations on the organisations choice of strategies?

Due to Walmarts stockholders having low power and high interest, it is imperative for management to convince them of the strategies Walmart is implementing, and that their plans are justified

Major strategies that Walmart has undertaken

Aggressive growth strategies in the international market
o In fiscal year 2012, Walmart opened a record 612 new stores through organic growth, in which expansion was due to increased customer base and increased purchases per customer. o Further using horizontal integration, Walmart acquired 1,094 stores and 42.2 million square feet around the world. o Walmart International will add between 30 and 33 million square feet of retail space in financial year 2013. o Average growth rate of 8% excluding acquisitions.

Major strategies that Walmart has undertaken

Strategies focused on global e-commerce
o Strengthened global e-commerce business by investing in new talent and technology. o Combined online, social and mobile innovations with physical stores to give customers an anytime, anywhere shopping experience. o Walmart continues to expand in the fastest-growing markets today, where millions of shoppers are purchasing online. In China, for example, Walmarts pending majority stake in Yihaodian, a leading online retailer, will open products and brands to consumers. o Successful online businesses in the U.S., the U.K. and Brazil, where Walmart delivers the convenience of multichannel shopping.

Major strategies that Walmart has undertaken

Strategies focused on sustainability
o Increased truck fleet efficiency by 65 percent over three years and plan to double it within ten years (which would save over $300 million per year). o Designed and open a new store prototype within four years that improves energy efficiency 22 percent of Walmarts electricity needs globally are supplied by renewable sources and all of this power generates no greenhouse gas emissions andis delivered in a cost effective manner saving costs for Walmart.

o Working together with suppliers to reduce packaging, increase recycled content, and expand recycling of packaging. Eliminating unnecessary packaging was another great way Walmart reduced cost.
o Last year, Walmart U.S. crossed a significant threshold by preventing more than 80 percent of its waste from going to landfills. Walmarts zero-waste-to-landfill program returned more than $231 million to the business last year through a combination of increased recycling revenue and decreased expenses.

Major strategies that Walmart has undertaken

Leveraging the productivity loop
o Introduced the virtual recruiting program and only flying the finalists of interviews for the final round of hiring. This helped Walmart to achieve cost savings of almost $3 million in 2012 and a reduction in carbon footprint of an estimated 628 kg of CO2 per Interview. Walmart (Mexico and India) trained more than 2,440 farmers and farm workers in Best Agricultural Practices. By selling directly to Walmart and eliminating the middleman, farmers earn a better price for their products, increase their incomes and reduced cost for Walmart Reformulated flavoured foods such as cereals, ready to eat foods and reduced sodium or added sugars in more than 500 foods, across canned vegetables, canned pastas, condiments and fresh beef which saved customers nearly $1.1 billion in 2012 Increased the amount of locally grown produce sold by 97 percent, and it now accounts for more than 10 percent of all produce sold in our U.S. stores and aim to increase the amount of locally grown produce we sell in the U.S. by the end of 2015. Walmart also built international procurement headquarters that provides sourcing information of local retailers and centralizes sourcing practices and then directly distributes goods to each distribution center. Localizing their sourcing in Asia enable Wal-Mart to meet needs of local customers and reduce lead-time and delivery cost.

Walmarts Financial Position

Walmarts Financial Position

In 2012, Walmart delivered a strong financial position.

Net sales increased by 5.9% from $418.9 billion in FY 2011 to $443.9 billion in FY 2012. The increase in net sales for fiscal 2012 was attributable to a combination of an increase in comparable sales, growth in retail square feet and currency translation benefits. This is shown by Walmarts aggressive international growth strategy (including recent acquisitions in the UK and South Africa)

Walmarts Financial Position

Walmart has a positive shareholder equity showing that total assets are greater than total liabilities.

Shareholders dividends

Dividends are a form of profit distribution to the shareholder. Walmart has a growing dividend per share showing that Walmart can continue to deliver strong returns to shareholders through dividends and the company's management believes that the growth can be sustained.

Walmarts Financial Position

Operating expenses
In 2012, operating expenses increased 4.8% compared to FY2011. Operating expenses grew at a slower rate than net sales of 5.9% due to investment in ecommerce platforms, improved labour productivity and organisational changes designed to strengthen and streamline Walmarts operations. However, these investments will significantly lower operating expenses in the future

Operating income
o As a result of the above factors and investment in price for products sold in Walmarts retail operations, which reduced gross margin, operating income increased 4% in the FY 2012.

Walmarts Financial Position

Return on Investments

Walmarts Financial Position

ROI is a meaningful metric that helps investors assess how effectively Walmart is deploying its assets. ROI was 18.6% in FY2012 compared to 19.2% in FY 2011. The decrease in ROI was primarily due to additional investments in property, plan, equipment, global e-commerce, higher inventories as well as price investment. Walmart is confident of the productivity improvements that could come with price investments.

Walmarts Financial Position

Liquidity
o Cash flow's provided by operating activities have supplied Walmart with a significant source of liquidity. Liquidity is the ability to pay short term obligations. o Walmart uses these cash flows, supplemented with long term debt and short term borrowings to fund Walmarts operations and global expansion activities. o All of the remaining free cash flows fund all part of the dividends on Walmarts common stock and share repurchases.

Conclusion
Walmart delivered a strong financial position in 2012, which was illustrated by its ability to grow.
Walmart international is delivering strong sales and remains one of the three largest retailers in the world. Walmart followed five three strategies to build on their success and deliver value to customers and shareholders in 2012. The five three strategies included international strategies, developing people, driving productivity loop, winning in global ecommerce and leading in environmental issues.

The financial report of 2012 gives a clear understanding on how Walmart delivers on its mission and is a sustainable organisation in the long run.