Walmart CEO Mike Duke Outlines Strategies for Building the 'Next Generation Walmart'

PRNewswire -- Wal-Mart Stores, Inc. President and CEO Mike Duke laid out four strategies for building the Next Generation Walmart at the company's annual shareholders meeting today. He said Walmart is poised to deliver on Sam Walton's vision of giving "the world an opportunity to see what it's like to save and have a better life." The strategies are:

1. Become a truly global company;
2. Understand the business challenges that retailers will face and solve
them;
3. Play an even bigger leadership role on social issues that matter to our
customers;
4. Keep our culture strong everywhere.



"Our results demonstrate the underlying strength of our business and our strategies of growth, leverage and returns," said Duke. "But as proud as we are of our recent performance, future success is never guaranteed. I want all of you to be able to say that at this moment Walmart committed to being a truly global company and began building the Next Generation Walmart."

In order to be a more global company, Duke discussed the need to serve customers as a local store, share best practices and leverage Walmart's global supply chain. He also stressed the importance of talent: "Just over the next five years, we'll create 500,000 jobs around the world. We need to recruit the best talent and identify the best talent in our ranks. Then we need to develop leaders and help them become global citizens."

Duke highlighted the global challenges that retail will face over the next 20 years, including the impact of technology on shopping habits and, in particular, on pricing. "Retail will soon enter an era of price transparency. And what kind of retailer wins in a time of price transparency? You got it, the price leader," Duke said. "We need to really churn the productivity loop and deliver on our Every Day Low Price business model everywhere. Walmart must widen the gap here. We will win on price leadership, and we will win big."

Duke also committed the company to continued leadership on social issues, saying, "Over the last few years, we've built a model for making a big difference on big issues. We are well into this journey now. No one can doubt our sincerity. No one can question our credibility. But as Sam Walton knew, leadership leads to higher expectations. And you know what? That's fine by me. So we must raise the bar. We must continue to meet the social obligations and expectations ahead. Walmart will never look back."

With the company's plans for future growth, Duke sees Walmart's culture as a competitive advantage and one that needs to stay strong globally. "Our culture is who we are. It isn't just words written on a wall at the Home Office or stapled to the bulletin board in the back room of a store. It makes us special. It sets us apart from the competition. And it appeals to people everywhere. So wherever we go and whatever changes we may make, we must keep our culture strong," said Duke. "I truly believe the retailer that respects individuals, that puts customers first, that strives for excellence, that is trusted will win the future."

Earlier today, the company announced that its Board of Directors approved a new repurchase program that authorizes the company to repurchase $15 billion of its shares. This program replaces the previous $15 billion program, which was announced June 5, 2009, and had approximately $4.7 billion of remaining authorization. Under the program, repurchased shares are constructively retired and returned to unissued status.

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UPS Launches Global Initiative to Improve Disaster Response

(BUSINESS WIRE)--UPS (NYSE:UPS) today announced a multi-year, multi-million-dollar initiative to improve the capabilities of relief organizations to respond to global emergencies.

The effort, which will involve both UPS and The UPS Foundation, begins with a commitment of up to $9 million over the next two years in the form of substantial financial grants, in-kind services and the deployment of logistics expertise. The commitment will support some of the world’s most respected relief organizations, including the American Red Cross, UNICEF, the World Food Programme, CARE and the Aidmatrix Foundation.

“This broad strategy for global disaster preparedness and response extends well beyond traditional financial support,” said Ken Sternad, president of The UPS Foundation. “We are combining our supply chain expertise, our assets and linking our key partners to enable more effective response to global emergencies.”

Hundreds of millions of lives are affected daily by natural disasters and humanitarian emergencies. According to UNICEF, in the last decade an estimated 20 million children have been forced to flee their homes and more than 1 million have been orphaned or separated from their families as a result of these tragedies. “If UPS can impact even a small percentage of these disasters that are happening daily somewhere around the world, this initiative will have been a success,” added Sternad.

UPS and The UPS Foundation announced the multi-faceted strategy at the Clinton Global Initiative’s (CGI) 2009 Annual Meeting today, where the company was recognized for its CGI “Commitment to Action.”

In launching the initiative, UPS and The UPS Foundation announced major donations to organizations committed to disaster preparedness and relief. They include:

* A $500,000 cash and in-kind donation to the American Red Cross to provide logistics, shipping and warehouse support, enabling the Red Cross to strategically preposition supplies to more effectively respond to the needs of those affected by disasters.
* A two-year, $1 million commitment to the U.S. Fund for UNICEF, including a grant to strengthen UNICEF’s emergency response capacity for its disaster preparedness program in the Asia-Pacific region. That program is particularly designed to protect the 580 million children who live there. Separately, the U.S. Fund for UNICEF recently announced that Dan Brutto, president of UPS International, had joined its Board of Directors.
* Collaboration support for CARE and Aidmatrix to establish integrated and standardized supply chain management systems. The UPS Foundation is supporting CARE with a $250,000 cash grant for the use of Aidmatrix technology that will enhance CARE’s ability to track relief supplies and the hiring of a logistics professional to manage CARE’s global supply chain. Also, UPS logistics experts are on the ground to help implement these improvements.
* Expansion of the UPS commitment to the Logistics Emergency Teams (LETs) initiative that provides logistics experts to the World Food Programme. LETs operate in support of the United Nations Logistics cluster following natural disasters and consist of logistics experts who deploy within 48-to-72 hours for three-to-six weeks in the aftermath of major natural disasters. Twenty UPS employees will be trained and available globally as LETs responders.
* A $250,000 grant to Aidmatrix to help fund the international expansion of the organization’s transportation aid relief program. UPS is matching this grant with $250,000 in donated transportation.
* A $50,000 grant to Safe America for its program encouraging American families to conduct “communication drills” and other activities as part of an annual rehearsal for a natural disaster or emergency.

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Survey: Marketers Cut Traditional Spending, Focus On New Opportunities

In these difficult economic times, top marketing officers are turning to new and often unproven strategies that focus on the Internet, partnerships, new markets, new products and services to help their companies.

These are some of the results of The CMO Survey, a poll of 581 U.S. marketing executives conducted in February 2009. The survey was conducted by professor Christine Moorman of Duke University’s Fuqua School of Business in conjunction with the American Marketing Association.

Overall, the survey indicates that 59 percent of marketers are less optimistic about the economy than they were one quarter ago, a reduction from the 77 percent of respondents who reported a decrease in optimism during the August 2008 CMO survey.

“While marketers in general remain unexcited about the economic situation, it is encouraging to at least see that pessimism is not increasing among the marketing community,” Moorman said. “This could either indicate that marketers think the worst times are behind us, or they have simply adjusted to operating in an adverse environment.”

Survey participants reported their firms failed to reach their goals for marketing return on investment and overall profit during the past year (falling short by 0.6 percent and 3 percent, respectively), but they expect increases in both categories during the next 12 months.

“Even though firms are experiencing some disappointment right now, their predictions for future ROI, profits and building knowledge are good signs that they continue to strive for growth,” Moorman said.

MARKETING SPENDING AND PRIORITIES

Marketing spending is expected to grow by only 0.5 percent over the next 12 months, with a 7 percent decrease in traditional advertising and 10 percent increases in both Internet marketing and new product introductions. Business-to-consumer marketers will make the most significant shifts to the Internet, for both product and service advertising.

“The observed shift is part of a broader movement to the Web and social media as key ways to reach customers. However, it also reflects marketers’ hopes for improving return on marketing investment with a cheaper and more effective set of tools,” Moorman said.

“Companies are also responding to customers’ desires for innovation by putting significant investments into new products and new services,” she added. “This requirement is coupled with ongoing demands for low price. Companies must stretch to reach this value sweet spot that has emerged for customers.”

Marketers continue to respond to consumer interest in social responsibility and report planned increases in marketing efforts that highlight their company’s benefit to society and minimal environmental impact. Moorman points to this strong trend as a “key to customers’ trust in the firm and not just ‘nice to do’ as in the past. Customers expect firms to do this now.”

Survey respondents predict a 4.5 percent decrease in spending on marketing consulting services over the next 12 months. They also report that hiring will remain flat in the near term.

Despite these trends, respondents point to the critical role of managing knowledge in their marketing strategies. Marketers rated a strong emphasis on customer insights (4.3 out of 5, where 5 is excellent performance), on sharing marketing knowledge (4.1 out of 5), and on the integration of existing marketing knowledge (5 percent increase in spending).

Moorman finds this choice logical. “In an economic downturn, firms try to get an advantage by building new insights and also try to do more with the resources, including knowledge that they already have.”

The survey asked respondents to identify firms across all business sectors that excelled at marketing. Top vote-getters for the “CMO Survey Award for Marketing Excellence” were Apple, Procter & Gamble and Coca-Cola. “All firms should investigate what these great marketing companies are doing and consider what might be learned or transferred to their context,” Moorman said. “It may be business process or it may be growth approaches. There is always something to learn.”

Other key findings of The CMO Survey include:

-- Thirty percent of marketers believe low price will be their customers’ top priority over the next 12 months. Another 20 percent selected trusting relationships and 19 percent chose superior product quality as their customers’ priorities. The focus on trust increased dramatically since the August 2008 survey.

-- Firms are increasingly turning to new product and service developments (24 percent of firms) and market development (18 percent of firms) to drive growth. Firms appear to be taking on reasonable risk to pursue growth during these tough times.

-- Most marketers (71 percent) expect to achieve this growth from within their firms. However, they are increasingly turning to acquisitions (9 percent), partnerships (13 percent) and licensing (7 percent) as alternative approaches.

-- Marketers’ orientations toward channel partnerships (firms, such as retailers and distributers, that move products from manufacturers to customers) have changed significantly, with only 26 percent of respondents more optimistic than last quarter and 41 percent less optimistic, about prospects for revenue growth resulting from channel partners.

-- Marketers indicate they do not expect growth in revenue from end customers (customers in households), with 59 percent less optimistic and only 25 percent more optimistic about these prospects compared to last August.

-- Marketers predict no increases in rivalry among competitors, but instead stronger cooperation on non-price strategies. This trend may reflect a greater emphasis on open innovation among firms.

“Results indicate marketers are looking for ways to help their firms not only survive but thrive during these tough times,” Moorman said. “Close proximity to customers, partners and competitors gives these executives special insight into spending and growth that may help buoy their firms and the overall economy. This knowledge improves cash flows and reduces the risk firms face in strategic activities.”

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