In 1962 Sam Walton open his first Wal-Mart in Rogers, Arkansas. His low price approach to retail soon became a model that all Wal-Mart stores would follow. “Sell brand merchandise at low prices.”
By the 1980’s Wal-Mart had over 300 stores and had accumulated over 1 billion dollars in sales.
USP OF WalMart Stores
Wide variety, Low pricesOther featuresEfficient supply chain networkCentral buying & PromotionDistribution WarehouseCooperative employees
“BUY IT LOW, STACK IT HIGH, SELL IT CHEAP”
To operate and expand in the international market-acquired ASDA in the UK.
Customer delightLeveraging technologyRespect for individual employeesBetter services
Sam Walton preached that “extraordinary results can come from empowering ordinary people” and hence displayed a Participative leadership style as per the case. Walton spent much time in stores with his associates freely exchanging ideas.
Potential competitors: Sears, Roebuck & Co., Kmart. E.J.Korvette, W.T.Grant, Atlantic Mills, Arlans, Federals, Zayre, Heck’s, Ames, Home Depot, Local Merchants, Regional Discount Stores.
Rivalry:Several formerly successful firms like, E.J.Korvette, W.T.Grant, Atlantic Mills, Arlans, Federals, Zayre, Heck’s and Ames, reorganized. Superstores of drug and foodchains rapidly discounted. Several new retail formats had emerged in the marketplace to challenge the discount department store format. Outlets known as “Malls without walls” opened up.
Suppliers: Grocery & General Merchandise- Pepsico, Kimberly Clark, Rickett Benkiser, Kraft, Danone, Mattel etc.
1980s & early 1990s- eras of economic uncertainty for retailers, many retailers negatively affected. Increased competitive pressures, sluggish consumer spending, slower than anticipated economic growth At the beginning of the year 2000, the US had experienced one of the longest periods of economic expansion in its history Walmart responded to changes in the marketplace by selling goods at price levels below regular retail prices. Walmart even though was considered as the industry leader carried much of the same merchandise, offered prices that were pennies apart and operated stores that look almost exactly alike.
To keep with the pace of technology revolution, Walmart had an inventory control system that was recognized as the most sophisticated as retailing. They incorporated a high speed computer system that linked almost all stores to the headquarters and the company’s distribution centre. Most important for management, it helped detect sales trends quickly and speeded up market reaction time substantially. At the beginning of 2000, Walmart set up a separate company with website with plans to go public.
Walmart had launched several programs to highlight popular social causes-“Buy American”,1985. The theme was “bring it home to USA” and its purpose was to communicate Wal-Mart’s support for American manufacturing. In the program, the firm’s exerted substantial influence to encourage to manufacturers to produce goods in the United States rather than import them from other countries.
Vendors were encouraged to initiate the process by contacting the company directly with proposals to sell goods that were made in the United States. Also, Walmart was one of the first retailers to embrace the concept of “green marketing”. The program offered shoppers the option of purchasing products that were better for the environment in three respects: manufacturing, use, disposal.