Wal-Mart vs Ahold

1. 1 Wal-Mart vs Ahold Mirjana Uzelac Neda Kovacevic M�nica P�rez Corporate Intelligence United Business Institute December 2003

2. History Ahold 1887 Albert Heijn takes over his father�s small Zaandam grocery store 1911 First Albert Heijn brand name products sold 1948 Ahold on Amsterdam stock exchange 1973 Founding Ahold N.V. for international growth 1977 In U.S. for the first time 1987 Queen Beatrix awards Ahold �ROYAL� 1990 Goes to Czechoslovakia 1992 Portugal 1995 New distribution system: store delivery in 18h 1996 Singapore, Thailand, China, Spain, Poland 2000 Acquired U.S. Foodservice 2003 Big financial scandal Wal-Mart 1962 Company founded with opening of first Wal-Mart store in Rogers, Ark. 1972 Listed on New York Stock Exchange 1979 Wal-Mart reaches $1 billion in sales 1983 First SAM'S CLUB opened 1987 Wal-Mart Satellite Network completed 1988 First Supercenter opened 1990 Wal-Mart becomes nation's No. 1 retailer 1991 International market entered: Mexico 1995 Argentina and Brazil 1996 China in a joint-venture 1997 Wal-Mart No. 1 employer in the U. S. 1998 Germany, Korea in a joint venture 1999 Largest private employer in the world 1999 United Kingdom

3. Getting Ahold of Things The fraud was simplicity itself. Food manufacturers frequently pay a fee to supermarket operators to encourage them to buy in bulk and then to promote the products to the ultimate consumers. These promotional allowances typically are a function of the volume purchased. The company then aggressively accounted for these promotional allowances, but did not have the volume to justify their recognition. Prematurely and incorrectly recognizing these promotional allowances of course increased their profits for some 500 million euros.

4. Competitive Fact Sheet

5. Wal-Mart vs Ahold Moni With net sales of USD244.5 billion, US colossus Wal-Mart continues to reign supreme amongst the world's leading grocery retailers. Last year sales grew by 12%, enabling it to maintain its unassailable lead where it stands 3.5 times as big as the second largest retailer, which this year came in as Carrefour. In their inexorable march across the world, the grocery retailers are increasingly capturing a larger proportion of the grocery market. Last year, the Top 30 grocers accounted for 33% of global sales, compared with 29% in 1999. However, the exception to this group is international retailer Ahold which has seen its net sales shrink 1%. This reflects currency fluctuations and the restatement of its accounts which have been adjusted to incorporate sales from joint ventures on an equity basis.Moni With net sales of USD244.5 billion, US colossus Wal-Mart continues to reign supreme amongst the world's leading grocery retailers. Last year sales grew by 12%, enabling it to maintain its unassailable lead where it stands 3.5 times as big as the second largest retailer, which this year came in as Carrefour. In their inexorable march across the world, the grocery retailers are increasingly capturing a larger proportion of the grocery market. Last year, the Top 30 grocers accounted for 33% of global sales, compared with 29% in 1999. However, the exception to this group is international retailer Ahold which has seen its net sales shrink 1%. This reflects currency fluctuations and the restatement of its accounts which have been adjusted to incorporate sales from joint ventures on an equity basis.

6. Wal-Mart presence in Europe

7. Wal-Mart Subsidiaries in EU

8. Ahold Presence in Europe

9. Ahold Subsidiaries in EU

10. Sector Trends for next 5 years Diversification Globalization Strong Retailers Technology MoniMoni

11. Sector Trend: Diversification The maturity of the food market has led supermarkets to look for new opportunities: non-food1 discount format1 e-commerce2 expansion abroad2 Most food retailers have had little success with e-commerce, but it�s expected that food retailers will continue to offer B2C e-commerce, considering it to be a necessary part of the services they provide to their customers, regardless of its profitability.Most food retailers have had little success with e-commerce, but it�s expected that food retailers will continue to offer B2C e-commerce, considering it to be a necessary part of the services they provide to their customers, regardless of its profitability.

12. But almost all have ignored the rise of wholesale food and drink trade However, it is the most interesing retail sector : percentage of consumption of food and drink in places other than homes has risen compared to the total consumption: demographic change: increase in the proportion of older, wealthier people in the population higher wholesale margins Wholesale demand from the food service segment increases by 4% to 5% a year across Europe, compared with growth in retail demand of 1% to 2%. Sector Trend: Diversification2 Retail sales of food and drink in Europe�s largest markets are at a standstill, leaving European grocery retailers hungry for opportunities to grow. Most leading retailers have already tried e-commerce, with limited success, and expansion abroad, often with more. But almost all have ignored the big, profitable opportunity in their own backyard: the wholesale food and drink trade, which appears to be just the kind of market retailers need. Average overall margins are higher in wholesale than in retail; wholesale demand from the food service sector is growing quickly as more Europeans eat out more often; and changes in the competitive dynamics of this fragmented industry are at last making it feasible for wholesalers to consolidate. Overall, Europe�s wholesale market for food and drink is growing at the same sluggish pace as the retail market, but the aggregate figures mask two opposing trends. The first and more important is the consumer�s growing preference for eating out: consumption of food and drink in places other than homes has risen from about 32 percent of total consumption in 1995 to 35 percent in 2000 and is expected to approach 38 percent by 2005 (Exhibit 1). This development is boosting wholesale demand from the food service segment by 4 to 5 percent a year across Europe, compared with growth in retail demand of 1 to 2 percent. Moreover, demographic change�particularly the increase in the proportion of older, wealthier people in the population�will probably sustain this pattern. Retail sales of food and drink in Europe�s largest markets are at a standstill, leaving European grocery retailers hungry for opportunities to grow. Most leading retailers have already tried e-commerce, with limited success, and expansion abroad, often with more. But almost all have ignored the big, profitable opportunity in their own backyard: the wholesale food and drink trade, which appears to be just the kind of market retailers need. Average overall margins are higher in wholesale than in retail; wholesale demand from the food service sector is growing quickly as more Europeans eat out more often; and changes in the competitive dynamics of this fragmented industry are at last making it feasible for wholesalers to consolidate. Overall, Europe�s wholesale market for food and drink is growing at the same sluggish pace as the retail market, but the aggregate figures mask two opposing trends. The first and more important is the consumer�s growing preference for eating out: consumption of food and drink in places other than homes has risen from about 32 percent of total consumption in 1995 to 35 percent in 2000 and is expected to approach 38 percent by 2005 (Exhibit 1). This development is boosting wholesale demand from the food service segment by 4 to 5 percent a year across Europe, compared with growth in retail demand of 1 to 2 percent. Moreover, demographic change�particularly the increase in the proportion of older, wealthier people in the population�will probably sustain this pattern.

13. Sector Trend: Diversification The Dutch retailer Ahold operates a delivery wholesaler, Deli XL, that offers all food and many nonfood categories to food service operators everywhere in the Netherlands and is currently planning to expand its model into other European countries. Carrefour, Ahold and Wal-Mart are all investigating the discount format, with Carrefour's Dia and Ed formats; Ahold's RIMI, Netto, Balaio and Pal� formats and Wal-Mart's Bodega and Todo D�a stores.The Dutch retailer Ahold operates a delivery wholesaler, Deli XL, that offers all food and many nonfood categories to food service operators everywhere in the Netherlands and is currently planning to expand its model into other European countries. Carrefour, Ahold and Wal-Mart are all investigating the discount format, with Carrefour's Dia and Ed formats; Ahold's RIMI, Netto, Balaio and Pal� formats and Wal-Mart's Bodega and Todo D�a stores.

14. Sector Trend: globalization3 The consolidation and internationalisation of the food retail can be expected to continue. 4 or 5 large retail organizations will operate on a worldwide scale, a number of dominant regional and national retailers will exist, the traditional small supermarket is approaching the end of its lifecycle.

15. IGD Global Retail Index1 Despite being the world�s largest retailer by turnover, Wal-Mart trails its nearest global rivals in terms of international presence. However, the American giant is now rapidly catching up and over the next year could overtake Ahold and move into second place in the index. Despite being the world�s largest retailer by turnover, Wal-Mart is a relative newcomer to global retailing and only began to expand out of its home market in 1991, compared to Carrefour (1973) and Ahold (1976). Since then its progress has been rapid with foreign store numbers increasing from 10 in 1993 to over 1,100 today. Ahold�s strengths lie in global sharing through its "Ahold Networking" Intranet, domestic market share, number of countries of operation and the level of international sales as a percentage of total group sales. However, following difficulties in South America a number of concerns have emerged regarding the widespread nature of its global strategy. This is an area where Wal-Mart is now excelling, as shown by its recent move into Japan and its continued strong growth in key non-domestic markets such as the UK, Canada and Mexico. As a result it is climbing the table and given the relatively immature nature of its international programme, its position can only improve. The IGD �Global Retail Index� is an attempt to give a more accurate ranking of the world�s top 30 global retailers featured in the previous table. The index includes a combination of �hard� and �soft� factors, which in IGD�s view determine whether a retailer can be considered as global or not. The factors have been given a different weighting depending on their relative importance to being a global retailer. The hard factors include: �������� Turnover �������� Number of countries of operation �������� Presence in key regions (globalisation is about establishing a presence in key markets rather than �putting flags on maps�) �������� Home market dominance �������� Percentage of foreign sales (as an indicator of the importance and maturity of a retailer�s international operations) The soft factors aim to give a reflection of a retailer�s international management skills and include: �������� Clarity of global strategy �������� Global culture �������� Level of global sharing and learning within the organisation IGD realises that the soft factors are subjective and it is therefore envisaged that they will evolve over time as retail globalisation intensifies. Despite being the world�s largest retailer by turnover, Wal-Mart trails its nearest global rivals in terms of international presence. However, the American giant is now rapidly catching up and over the next year could overtake Ahold and move into second place in the index. Despite being the world�s largest retailer by turnover, Wal-Mart is a relative newcomer to global retailing and only began to expand out of its home market in 1991, compared to Carrefour (1973) and Ahold (1976). Since then its progress has been rapid with foreign store numbers increasing from 10 in 1993 to over 1,100 today. Ahold�s strengths lie in global sharing through its "Ahold Networking" Intranet, domestic market share, number of countries of operation and the level of international sales as a percentage of total group sales. However, following difficulties in South America a number of concerns have emerged regarding the widespread nature of its global strategy. This is an area where Wal-Mart is now excelling, as shown by its recent move into Japan and its continued strong growth in key non-domestic markets such as the UK, Canada and Mexico. As a result it is climbing the table and given the relatively immature nature of its international programme, its position can only improve. The IGD �Global Retail Index� is an attempt to give a more accurate ranking of the world�s top 30 global retailers featured in the previous table. The index includes a combination of �hard� and �soft� factors, which in IGD�s view determine whether a retailer can be considered as global or not. The factors have been given a different weighting depending on their relative importance to being a global retailer. The hard factors include: �������� Turnover �������� Number of countries of operation �������� Presence in key regions (globalisation is about establishing a presence in key markets rather than �putting flags on maps�) �������� Home market dominance �������� Percentage of foreign sales (as an indicator of the importance and maturity of a retailer�s international operations) The soft factors aim to give a reflection of a retailer�s international management skills and include: �������� Clarity of global strategy �������� Global culture �������� Level of global sharing and learning within the organisation IGD realises that the soft factors are subjective and it is therefore envisaged that they will evolve over time as retail globalisation intensifies.

16. Competitive Positioning1 The index uses a combination of 'hard' and 'soft' factors, which in IGD's view determine whether a retailer can be considered a major European retailer or not. Hard factors include (amongst others) total European group tournover, number of European countries of operation and presence in the five key markets of Germany, UK, France, Italy and Spain. Soft factors include the clarity of European strategy and the development of a European culture. In 2003, only two retailers can claim to be pan-European, namely Carrefour and Metro. These retailers both have significant European turnover allied with a strategy for developing a coherent network of European operations. Eleven retailers are considered "Major European Retailers" and these eleven are at various stages of developing a pan-European presence. A further ten retailers are considered "Leading European Retailers" and in general have smaller turnovers spanning several European markets, as well as being larger local players only present in one market. Position 24-30 are taken by retailers who have limited operations in Europe, predominantly in one key market. The index uses a combination of 'hard' and 'soft' factors, which in IGD's view determine whether a retailer can be considered a major European retailer or not. Hard factors include (amongst others) total European group tournover, number of European countries of operation and presence in the five key markets of Germany, UK, France, Italy and Spain. Soft factors include the clarity of European strategy and the development of a European culture. In 2003, only two retailers can claim to be pan-European, namely Carrefour and Metro. These retailers both have significant European turnover allied with a strategy for developing a coherent network of European operations. Eleven retailers are considered "Major European Retailers" and these eleven are at various stages of developing a pan-European presence. A further ten retailers are considered "Leading European Retailers" and in general have smaller turnovers spanning several European markets, as well as being larger local players only present in one market. Position 24-30 are taken by retailers who have limited operations in Europe, predominantly in one key market.

17. Future Market Focus1 Global Retailing 2003 p. 391 p. 314 Last year saw Wal-Mart make its long awaited entry into Japan. It is in the process of gradually acquiring Seiyu, the country's sixth largest supermarket chain, which also has small operations in Singapore and Vietnam. In March, it bought a 6.1% stake in Seiyu, which increased to 34% by December. By 2007, Wal-Mart has the option to acquire 66.7% of the company. Wal-Mart lost no time asserting its influence over Seiyu. Over the last year, it has announced a store closure programme, established a joint working team to implement best practices into Seiyu, brought Seiyu into its global procurement network and appointed five senior managers to Seiyu's board. Two significant companies which are pulling back from their international operations are Ahold and Daiei. As has been well documented, Ahold is in the process of offloading under performing businesses in South America and Asia and there is the possibility that it could sell its networks in Central Europe (Czech Republic, Poland and Slovakia) and in Portugal (where it operates in a joint venture with Jeronimo Martins Retail) next year, enabling it to focus on more lucrative operations in the US, Netherlands, Northern Europe and the Baltics and Central America. High levels of activity are likely to continue this year with the sale of Ahold's assets in Latin America and Asia, Safeway and possibly Somerfield in the UK, and a number of deals in the US such as A&P disposals. These are more reflective of defensive strategies as retailers seek to offload poorly performing businesses, rather than aggressive growth. It will continue to invest in companies that can achieve a sustainable number one or two position in their markets within three to five years, while also meeting defined profitability and return criteria over time. This goes for joint ventures as well. Companies not capable of meeting these objectives will be divested. Ahold is committed to generating at least Euro 2.5 billion in proceeds from disposals by 2005. The following factors have been chosen in assessing the level of attractiveness for each market. ����Current market size - this measure provides an indication of the size of opportunity within each market. IGD�s own estimates of current grocery market sizes have been used in calculating the scores. Consumer spend per capita - this measure provides an indication of the relative wealth of individual consumers. Clearly it is important for retailers to have access to a consumer base that can afford its offer. Economic/political rating - this measure assesses the level of risk associated with each market, both economically and politically. Retailers will ideally want as stable an economy and political regime as possible since highly volatile markets may be too high a risk for investments. Infrastructure rating - this reflects the level and state of infrastructure within a market, both geographically (e.g. roads and railways) as well as socially (e.g. televisions and telephones). Degree of competition - this measures reflects how fierce the level of competition within a market is and therefore how tough the market conditions are. Number of global retailers present - global retailers will need to avoid over-crowding in new markets and this factor therefore reflects the level of global retailers present within markets. Imperative rating - due to various reasons certain markets may have a more urgent need to establish a presence, for example due to the availability of short term opportunities; the likelihood of regulations making it more difficult to enter at a later date; or because other retailers are establishing a presence, therefore limiting the level of opportunity. Long term growth prospects - this is a reflection of the level of expected market growth over the long term, which is itself dependent on a number of factors, such as future population, economic and market developments. Strategic importance - this indicates the likely long-term status of that market, either globally or on a regional basis. The importance may be due either to the geographic location of the market; economic potential; or to operational issues. Of the 75 markets assessed in this unique piece of research, China, Russia and Italy are the most attractive development opportunities. China and Russia are large markets with strong potential growth levels and are of long-term strategic importance, something already recognised by Auchan and Metro who are present in both markets. In Italy the number of stores operated by global retailers is currently limited and it has a relatively benign competitive environment and large market size. Japan is next on the list, a position bolstered by Wal-Mart�s recent entry, and then comes Hungary, a market that has already attracted numerous global players including Tesco. India�s position as joint fifth in the table may seem surprising, particularly as it is higher than the UK, France and Germany. So far the country has only attracted one leading global retailer (Metro) but it has no organised grocery retail structure, a large population and an increasing number of middle class households that could attract others in the medium term. Amongst the ten priority 2 markets are the world�s largest economies � USA, Japan and Germany. The market size, consumer wealth and strategic location of these countries all work in their favour but all have become increasingly difficult to enter for differing reasons. In the USA the need for scale is a barrier to entry, whereas Japan�s complicated market structure and Germany�s strict planning regulations and fierce competitive environment are a problem for ambitious global retailers. Global Retailing 2003 p. 391 p. 314 Last year saw Wal-Mart make its long awaited entry into Japan. It is in the process of gradually acquiring Seiyu, the country's sixth largest supermarket chain, which also has small operations in Singapore and Vietnam. In March, it bought a 6.1% stake in Seiyu, which increased to 34% by December. By 2007, Wal-Mart has the option to acquire 66.7% of the company. Wal-Mart lost no time asserting its influence over Seiyu. Over the last year, it has announced a store closure programme, established a joint working team to implement best practices into Seiyu, brought Seiyu into its global procurement network and appointed five senior managers to Seiyu's board. Two significant companies which are pulling back from their international operations are Ahold and Daiei. As has been well documented, Ahold is in the process of offloading under performing businesses in South America and Asia and there is the possibility that it could sell its networks in Central Europe (Czech Republic, Poland and Slovakia) and in Portugal (where it operates in a joint venture with Jeronimo Martins Retail) next year, enabling it to focus on more lucrative operations in the US, Netherlands, Northern Europe and the Baltics and Central America. High levels of activity are likely to continue this year with the sale of Ahold's assets in Latin America and Asia, Safeway and possibly Somerfield in the UK, and a number of deals in the US such as A&P disposals. These are more reflective of defensive strategies as retailers seek to offload poorly performing businesses, rather than aggressive growth. It will continue to invest in companies that can achieve a sustainable number one or two position in their markets within three to five years, while also meeting defined profitability and return criteria over time. This goes for joint ventures as well. Companies not capable of meeting these objectives will be divested. Ahold is committed to generating at least Euro 2.5 billion in proceeds from disposals by 2005. The following factors have been chosen in assessing the level of attractiveness for each market. ����Current market size - this measure provides an indication of the size of opportunity within each market. IGD�s own estimates of current grocery market sizes have been used in calculating the scores. Consumer spend per capita - this measure provides an indication of the relative wealth of individual consumers. Clearly it is important for retailers to have access to a consumer base that can afford its offer. Economic/political rating - this measure assesses the level of risk associated with each market, both economically and politically. Retailers will ideally want as stable an economy and political regime as possible since highly volatile markets may be too high a risk for investments. Infrastructure rating - this reflects the level and state of infrastructure within a market, both geographically (e.g. roads and railways) as well as socially (e.g. televisions and telephones). Degree of competition - this measures reflects how fierce the level of competition within a market is and therefore how tough the market conditions are. Number of global retailers present - global retailers will need to avoid over-crowding in new markets and this factor therefore reflects the level of global retailers present within markets. Imperative rating - due to various reasons certain markets may have a more urgent need to establish a presence, for example due to the availability of short term opportunities; the likelihood of regulations making it more difficult to enter at a later date; or because other retailers are establishing a presence, therefore limiting the level of opportunity. Long term growth prospects - this is a reflection of the level of expected market growth over the long term, which is itself dependent on a number of factors, such as future population, economic and market developments. Strategic importance - this indicates the likely long-term status of that market, either globally or on a regional basis. The importance may be due either to the geographic location of the market; economic potential; or to operational issues. Of the 75 markets assessed in this unique piece of research, China, Russia and Italy are the most attractive development opportunities. China and Russia are large markets with strong potential growth levels and are of long-term strategic importance, something already recognised by Auchan and Metro who are present in both markets. In Italy the number of stores operated by global retailers is currently limited and it has a relatively benign competitive environment and large market size. Japan is next on the list, a position bolstered by Wal-Mart�s recent entry, and then comes Hungary, a market that has already attracted numerous global players including Tesco. India�s position as joint fifth in the table may seem surprising, particularly as it is higher than the UK, France and Germany. So far the country has only attracted one leading global retailer (Metro) but it has no organised grocery retail structure, a large population and an increasing number of middle class households that could attract others in the medium term. Amongst the ten priority 2 markets are the world�s largest economies � USA, Japan and Germany. The market size, consumer wealth and strategic location of these countries all work in their favour but all have become increasingly difficult to enter for differing reasons. In the USA the need for scale is a barrier to entry, whereas Japan�s complicated market structure and Germany�s strict planning regulations and fierce competitive environment are a problem for ambitious global retailers.

18. Sector Trend: Strong Retailers The power of the retail sector will grow: retailers are expected to rule the food chain in the coming five years.3 Retailers are trying to present themselves as a strong brand, but only a few will succeed.3 Retailers� greatest strength will occur in fresh and chilled categories, where stores can present themselves as a brand. It will be less apparent in sectors such as soft drinks, cosmetics, personal care and tobacco, where A-brands will remain dominant. They will buy � and control � the total process, from ingredients through production, ensuring that the finished product will meet the needs of consumers. Those retailers that become increasingly involved in the production process will measure preferred suppliers by certain key criteria. First and foremost, quality and safety will be essential. Other factors will include profitability for the retailer; differentiating power for the retailer; the ability to positively impact customer loyalty; and the creation of an image of innovation for the store. However, increased negative reactions to the growing globalization can be expected from certain consumer groups. Already, some big brands have begun to make adjustments to their uniform global strategy, by emphasizing local values and local assortments. (Source: Cap Gemini Ernst & Young, �The Changing Face of the Worldwide Food Industry�)Retailers� greatest strength will occur in fresh and chilled categories, where stores can present themselves as a brand. It will be less apparent in sectors such as soft drinks, cosmetics, personal care and tobacco, where A-brands will remain dominant. They will buy � and control � the total process, from ingredients through production, ensuring that the finished product will meet the needs of consumers. Those retailers that become increasingly involved in the production process will measure preferred suppliers by certain key criteria. First and foremost, quality and safety will be essential. Other factors will include profitability for the retailer; differentiating power for the retailer; the ability to positively impact customer loyalty; and the creation of an image of innovation for the store. However, increased negative reactions to the growing globalization can be expected from certain consumer groups. Already, some big brands have begun to make adjustments to their uniform global strategy, by emphasizing local values and local assortments. (Source: Cap Gemini Ernst & Young, �The Changing Face of the Worldwide Food Industry�)

19. 2003 Global Most Admired To compile the lists on these pages, the Hay Group surveyed more than 10,000 directors, executives, and managers at 345 companies around the world. Each respondent was asked to rank the other companies in his or her industry To compile the lists on these pages, the Hay Group surveyed more than 10,000 directors, executives, and managers at 345 companies around the world. Each respondent was asked to rank the other companies in his or her industry

20. Wal-Mart Subsidiaries

21. Ahold Subsidiaries

22. Sector Trend: Technology Cooperation will become increasingly important1: between manufacturers and retailers to improve the quality, velocity and dynamics within the chain, between stores to share best practices. Technology strength will be a critical success factor for retailers and manufacturers3 Technology is being used actively as the most important instrument in order multiply the concept in a rapid and healthy manner, reduce costs and create a value added for the costumer. Large chain retailers can boost their near-term revenues by 5 to 8 percent with a new, more refined approach to sharing best practices. Such a retailer arranges its stores into peer groups based on factors including location, size, and customer demographics. The remaining performance differences are related mainly to store-level management, so the chain develops detailed metrics to compare each store with its peers. Last, it identifies the top-performing stores� best practices and disseminates them throughout the peer group. Thanks to this approach, stores adopt proven performance tactics, and retailers set realistic, bottom-up performance targets for individual stores while encouraging the best managers to share their knowledge. (Source: The McKinsey Quarterly) Technology is being used actively as the most important instrument in order multiply the concept in a rapid and healthy manner, reduce costs and create a value added for the costumer. Large chain retailers can boost their near-term revenues by 5 to 8 percent with a new, more refined approach to sharing best practices. Such a retailer arranges its stores into peer groups based on factors including location, size, and customer demographics. The remaining performance differences are related mainly to store-level management, so the chain develops detailed metrics to compare each store with its peers. Last, it identifies the top-performing stores� best practices and disseminates them throughout the peer group. Thanks to this approach, stores adopt proven performance tactics, and retailers set realistic, bottom-up performance targets for individual stores while encouraging the best managers to share their knowledge. (Source: The McKinsey Quarterly)

23. Technology Based Intelligence Wal-Mart Wal-Mart Satellite Network (largest private satellite communication system in the U.S.) radio-frequency-identification (RFID) tags�chips Ahold Sales Information System RS/6000 � SP� servers Ahold Sales Information System to track each product, customer, delivery and transaction at the corporate level and provide full transparency to the branches Wal-Mart recently announced that it wants its top 100 suppliers, by 2005, to begin fitting their cases and pallets with radio-frequency-identification (RFID) tags�chips that can automatically transmit to a special scanner all of the information about a container�s contents or about individual products. Retailers and consumer products manufacturers, aware of Wal-Mart�s interest in RFID, have also begun eyeing it as the next supply chain technology to invest in. (Source: The McKinsey Quarterly) Ahold is rapidly acquiring new grocery chains and distribution companies. Its technology division, Ahold Information Services, is charged with the challenge of standardizing applications across all operating companies with the ultimate goal of reducing support and development costs we have accomplished a number of computer system conversions, substantial system conversion projects, including the complete implementation of the SIS vendor allowance tracking system, remain Ahold Sales Information System to track each product, customer, delivery and transaction at the corporate level and provide full transparency to the branches Wal-Mart recently announced that it wants its top 100 suppliers, by 2005, to begin fitting their cases and pallets with radio-frequency-identification (RFID) tags�chips that can automatically transmit to a special scanner all of the information about a container�s contents or about individual products. Retailers and consumer products manufacturers, aware of Wal-Mart�s interest in RFID, have also begun eyeing it as the next supply chain technology to invest in. (Source: The McKinsey Quarterly) Ahold is rapidly acquiring new grocery chains and distribution companies. Its technology division, Ahold Information Services, is charged with the challenge of standardizing applications across all operating companies with the ultimate goal of reducing support and development costs we have accomplished a number of computer system conversions, substantial system conversion projects, including the complete implementation of the SIS vendor allowance tracking system, remain

24. Wal-Mart: SWOT Analysis Position to buy any retailer and can enter any marketPosition to buy any retailer and can enter any market

25. Ahold: SWOT Analysis

27. Sources 1) IGD Research, www.igd.com 2) The McKinsey Quarterly 3) Cap Gemini Ernst & Young, �The Changing Face of the Worldwide Food Industry� 4) Tansas, �Presentation of Food Retail Sector�, www.tansas.com 5) www.hoovers.com