This paper will be discussing a selected group of case questions related to Wal-Mart.Wal-Mart is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores. The company is the world’s third largest public corporation, according to the Fortune Global 500 list in the world. Wal-Mart remains a family-owned business, as the company is controlled by the Walton family who won a 48% stake in Wal-Mart.
It is also one of the world’s most valuable companies (Wikimedia Foundation, Inc.). The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Wal-Mart is also the largest grocery retailer in the United States.
In 2009, it generated 51% of its US $258 billion sales in the U.S. from grocery business. It also owns and operates the Sam’s Club retail warehouse in North America. Wal-Mart has 8,500 stores in 15 countries, under 55 different names. The company operates under the Wal-Mart name in the United States, including the 50 states and Puerto Rico. Every company has their own strengths, weakness, opportunities and threats. Wal-Mart’s strengths are their powerful retail brand. It has a reputation for value for money, convenience and wide range of products all in one store.
They have grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA). The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart’s efficient procurement. Another strength they have is the focused strategy in place for human resource management and development. People are key to Wal-Mart’s business and it invests time and money in training people, and retaining a development them.
Some of Wal-Mart’s weaknesses are the world’s largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some area due to the huge span of control. Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors. And last the company is global, but has a presence in relatively few countries worldwide.
The opportunities for Wal-Mart are to take over, merge with, or form strategic alliances with other global retailers, focusing on specific markers such as Europe or the Greater China Region. The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer market, such as China and India. They have 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. And opportunities exist for Wal-Mart to continue with its current strategy of large, super centers.
The threats that have come among Wal-Mart are being number one means that you are the target of competition, locally and globally. Being a global retailer means that you are exposed to political problems in the countries that you operate in. And the cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low cost regions of the world. This has led to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.
Sam Walton’s built management philosophies of excellence in the workplace, customer services, and always having the lowest price. And his secret to success was to commit to your business by believing in it more than anybody else. Share your profits with all your associates by treating them as partners and motivating them. Communicate everything you possibly can to your partners because the more they know, the more they will understand. Show appreciation to everything your associates do for the business, outside of getting their paycheck, everyone likes to be told their appreciated.
According to Wikipedia in the 1990’s Wal-Mart saw an era of furious growth on an unprecedented scale and the incorporation of several new ideas and technology into their business. The company had moved into more than seven different state markets. Wal-Mart had also entered the international market in the 1990’s, with the opening of their first store in Mexico City.
By 1995, Wal-Mart had 1,995 discount stores, 239 super centers, 433 SAM’s Clubs and 376 international stores with sales at $93.6 billion (including US sales of $78 billion) and 675,000 associates. Also in 1998, Wal-Mart launched its Wal-Mart television Network, a vast, in store advertising network showing commercials for products sold in the stores.
Seeing how the company grew and expanded during the years that Sam Walton’s was living, I would suggest they continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind,, while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment.
The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and ethical responsibilities.
Reference The Millionaire Insider (2008). Retrieved 2012, from http://www.themillionairesecrets.net/sam-waltons-wal-mart-philosophy/
Marketing Teacher (2000) Retrieved 2012, from http://www.marketingteacher.com/swot/walmart-swot.html#
Walmart (2012) Retrieved 2012, from http://corporate.walmart.com/our-story/heritage/sam-walton
Wikipedia (2012) Retrieved 2012, from http://en.wikipedia.org/wiki/History_of_Walmart