I have chosen Wal-Mart Stores Inc for my final paper topic selection they are also known as WMT on the New York Stock Exchange (NYSE) . I am intrigued with their success but also scared about how dependant I have become with my shopping at their stores. This store is not only a retail giant it is also retail bully that forces other stores to go out of business. Wal-Mart not only specializes in retail items such as clothing, jewelry, lawn, and garden they also have super stores that specialize in pharmacy, groceries, auto repair, and check cashing in addition to the services mentioned above.
The only other store that has similar retail items and services is Super K Mart which has seriously declined in retail status over the past 10 years. Wal-Mart offers many services and has found a way not only to be competitive but to be dominate when it comes to cost savings. Their product lines are name brand in most cases and are offered at below retail prices on a regular basis which most stores in their competition range can't compete with. These stores are easily accessible in rural and urban city settings, Wal-Mart has 8,970 stores across the world.
This global giant is currently the biggest private employer across the world employing over 2 million people world wide and still growing. This store has a great impact on the US economy it helps boost US consumer spending habits and helps the employment rate. I can’t think of another privately owned company that has this big of an impact on the economy. There are a lot complaints about the low pay rates the company offers to its employees but Wal-Mart is offering jobs when other industries and companies are laying off and putting hiring freezes on new positions.
These job opportunities may not pay well but it’s most definitely an alternative to being unemployed with no income. Overall Wal-Mart is a solid company that has a broad business portfolio in investments, social responsibility, and ethics which for the most part Wal-Mart has been true to it’s company mission purpose Sam Walton said it best, “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” # History
Wal-Mart founder Sam Walton was born March 29, 1918 in Kingfisher, Okla. just before the Great Depression. In 1940 Mr. Walton graduated from the University of Missouri with a business degree. Mr. Walton started out working for the retail department store JC Penney in Des Moines, Iowa, as a $75 a month trainee.
From 1942 to 1945 Mr. Walton served in the Army, supervising security at aircraft plants and POW camps. On September 1, 1945 Mr. Walton borrowed $20,000 from his father-in-law at the age of 27 Mr. Walton purchased his first franchise, a Ben Franklin variety store in Newport, Arkansas. In four years he turned this negative profiting store into the number one Ben Franklin franchise in the state. Walton kept a competitive advantage by surveying rival stores to assess their pricing and display strategies.
He also began negotiating directly with manufacturers for goods, rather than following the existing pricing structures set by Butler Brothers the parent company of Ben Franklin. In 1949, Walton lost the lease on his store in Newport, Arkansas. He wanted to buy a department store in St. Louis, but his wife Helen insisted that she wanted to live in a small town, a decision that would later have an impact on Wal-Mart's growth strategy targeting small town communities that were an untapped market for discount retailers. In 1951 Walton ran the Walton 5 and 10 as a Ben Franklin franchise.
Two years later he opened a second store in nearby Fayetteville, Arkansas by 1962, he was the largest Ben Franklin franchise owner in the U.S., with 16 stores in Arkansas, Kansas, and Missouri. Walton's experience with the Ben Franklin stores made him realize that there was an opportunity for discount stores that promise consistently low prices in small and rural communities. After parting ways with Ben Franklins stores due to business strategy differences Sam Walton and his younger brother, Bud, opened their first discount store, Wal-Mart Discount City in Rogers, Arkansas. This store was twice as big as the original Walton 5 and 10 in Bentonville and sales were $975,000 in the store's first year.
In 1962 three other future retail giants opened their doors: the first Kmart opened in Garden City, Michigan, Woolworth's department store opened its Woolco discount chain, and Dayton Hudson opened the first Target store. Within the first five years Wal-Mart had 18 stores with sales of $9 million while Kmart had 250 stores with sales of more than $800 million.# Wal-Mart was 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 now the largest grocery retailer in the United States.
Fast forwarding to present times in the year of 2009 Wal-Mart generated 51% of its $258 billion sales in the U.S. from grocery sales. It also owns and operates Sam's Club retail warehouses. Sam Waltons' overall business strategy was to achieve higher sales volumes by keeping sales prices lower than his competitors by reducing his profit margin. The same strategy is still used today and has not changed in forty nine years. Ethics
The vision of Wal-Mart’s Ethical Standards Program (ESP) is growing through a social responsible program. The program exists to strengthen the implementation of positive labor and environmental practices in factories, to bring opportunities for a better life in the countries where merchandise for sale by Wal-Mart is sourced. and to verify factory compliance with our Standards for Suppliers. Wal-Mart states they are committed to working with their suppliers and other stakeholders to accomplish these objectives and to address challenges with sustainable solutions. Wal-Mart has consistently strived to improve its reputation and their efforts have been increasingly recognized.
For example, in the most recent quarterly Covalence ethical reputation index Wal-Mart was ranked third out of 35 retailers. Covalence is a private research institution that tracks the ethical reputation of multinational corporations by using 45 criteria to examine public information about the companies' efforts in the areas of labor standards, waste management, product social utility and human rights policy, among others.# Marketing
Wal-Mart offers many different products to suit every possible need of their customers. From automobile repair services to groceries to a variety of products in between, it is a one-stop shopping excursion for most of their customers. They also produce private label goods, such as Great Value, Sam's Choice, and Equate. Wal-Mart's private label brands goes directly from the assembly line to their store shelves.
Eliminating the middle man helps them to offer inexpensive generic Wal-Mart store brand products. Wal-Marts marketing is done mostly by word of mouth from having low prices and having happy loyal customers giving them referrals. They also advertise on TV "Everyday low prices" is their current slogan along with using the "Rollback" smiley face cutting all of the prices down. I also have visited Wal-Mart’s online website which has every featured item readily available at the click of a mouse.
This website offers store items that local stores do not regularly stock. These warehouse items have to be ordered online and be shipped to the store or shipped directly to your home address. This shopping feature actually encourages you to use the online ordering feature instead of actually having to physically come to the store. The Wal-Mart online website also offers a variety of services that help you save time and money. These services include online printable coupons, online pharmacy, gift registry, gift cards, and online advertisements for weekly featured specials in your local stores.
Financial Wal-Mart Stores, Inc., (NYSE: WMT) serves customers and members more than 200 million times per week at more than 9,700 retail units under 69 different banners in 28 countries. With fiscal year 2011 sales of $419 billion, Wal-Mart employs more than two million associates worldwide. Wal-Mart continues to be a leader in sustainability, corporate philanthropy and employment opportunity.# Wal-Mart increased net sales by 3.4 percent to $419 billion and operating income by 6.4 percent to more than $25 billion.
Wal-Mart’s diluted earnings per share from continuing operations increased by 12 percent to $4.18 per share. They continued to deliver a stable return on investments of over 19 percent. In 2011 fiscal year Wal-Mart closed out the year with almost $11 billion in free cash flow and returned a record $19.2 billion to shareholders through dividends and share repurchases. Human Resources
Wal-Mart states that they work to help every associate feel fulfilled, motivated and empowered in their careers, from every store associate to their distribution center to the home office this is their objective.# Wal-Mart tries to hire HR associates who can lead and motivate others, and who understand the vital role that career opportunities play in improving lives. As a company with 2.1 million associates, their employment needs are diverse, challenging, and constantly changing. Final Conclusion
Wal-Mart has grown since it was first started by owner Sam Walton and is constantly growing financially and socially. This retail giant not only is a revenue generating machine but plays a major role in the U.S. economy. As stated before I do not know of any other privately owned corporation that has this type of an affect on the economy. Wal-Mart offers employment, social responsibility, and consumer friendly consistent low retail prices boosting the U.S. economy spending and employment rates.
Despite negative press about low employee wage rates and merchandise from distributors that may have less than standard labor practices Wal-Mart has tried to address and correct past mistakes through screening and monitoring business associates. Overall as an outsider looking in I can not find any critical flaws in Wal-Mart business or social responsibility practices they really do try to give back to each community it serves. Bibliography
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Walmartstores.com: Global Ethics Office. (n.d.). Walmartstores.com. Retrieved October 28, 2011, from http://walmartstores.com/AboutUs/280.aspx
Walmartstores.com: People/Human Resources. (n.d.). Walmartstores.com. Retrieved October 28, 2011, from http://walmartstores.com/Careers/7684.aspx?p=7683
Transforming - The Rise Of Wal-Mart | Is Wal-Mart Good For America? | FRONTLINE | PBS. (2004, November 16). PBS: Public Broadcasting Service. Retrieved November 18, 2011, from http://www.pbs.org/wgbh/pages/frontline/shows/walmart/transform/cron.html