Wal-Mart is a general merchandise discount retailer, which was incorporated in 1962. Wal-Mart’s history is based on one man, Sam Walton, who changed the course of retailing forever. Sam Walton first entered retailing when he was a management trainee at J.C. Penny Co. in 1940 in Des Moines, Iowa. After serving in the Army in World War II, Walton acquired a Ben Franklin variety store franchise with his brother James Walton in Newport Arkansas, until they lost the lease to the store in 1950. By 1962, when the first Wal-Mart Discount City was opened in Rogers Arkansas, both Walton’s were operating fifteen stores under the “Walton 5 & 10” name, and were the largest Ben Franklin franchisee in the country. Limited pricing, low gross margins, and high inventory turnover characterized these stores. Walton phased out the stores in 1976 in order to focus on the emerging Wal-Mart stores. In 1978, the first distribution center was built, followed by the first Wal-Mart Supercenter in 1983 and a Sam’s Club in 1988.Important to Walton, and ultimately Wal-Mart, are certain philosophies that were amounted over time. Walton held these values tightly, and engrained them in the Wal-Mart cultures. From his experience at J.C. Penny Co. he was impressed with the philosophies they used (e.g. “The Penny Idea”) and used them to mold Wal-Mart. This included referring to employees as “associates”, serving the public to their complete satisfaction, and receiving a fair profit from services rendered. Walton’s theory on what Wal-Mart should be is “a conveniently located one-stop shopping unit where customers could buy a wide variety of quality merchandise at discount prices.” And as Wal-Mart grew, management sought a firm that was a “discount department store chain offering a wide variety of general merchandise to the customer.” It was on these values and philosophies that Wal-Mart expanded. Wal-Mart has grown above and beyond the Arkansas store that opened thirty-nine years ago. It serves more than 100 million customers weekly in all of the 50 states, plus Puerto Rico, Canada, China, Mexico, Brazil, Germany, United Kingdom, Argentina, and South Korea. Wal-Mart’s current operating numbers., Wal-Mart should implement more entrances and exits into different departments, such as the Garden department and the Grocery department, with signage that easily identifies what part of the store the entrances are leading too.Moving from the retail level to business relationships, Wal-Mart has extensive opportunities to expand on its distinctive competency of its distribution system. The company has strategically placed distribution centers all over the US close to its stores. This not only makes for an excellent venue to supply Wal-Marts, but other companies’ stores as well. Wal-Mart Inc. can be a competitive distributor that would service companies not in direct competition with Wal-Mart. A study should be conducted to find out which industry should be targeted for this type of venture. This is a low risk high return venture because Wal-Mart would be using facilities that the company already owns, and expansion of these facilities is already in the making. In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.). Only the U.S. government maintains a bigger database.” Sam Walton was eventually considered “the most influential retailer of the century, and with good reason, for nearly every great retailer of the coming years would follow his business examples.” Industrial Revolution: When the Industrial Revolution took place in the United States, factories were now able to out produce consumer demand. For the first time, these new goods needed new ways to be sold, new ways to get to the public. “In New York, Philadelphia, and Chicago, the first department stores opened their doors. Railroads and telegraph wires snaked across the country, giving storekeepers a new way to order goods and get them on the shelves faster than ever before. A whole new industry sprang up to persuade people through advertisements with enticing pictures and clever slogans, to buy things they’d never known they needed, to turn America, in the phrase department store pioneer John Wanamaker, into the Land of Desire.This included referring to employees as “associates”, serving the public to their complete satisfaction, and receiving a fair profit from services rendered. Walton’s theory on what Wal-Mart should be is “a conveniently located one-stop shopping unit where customers could buy a wide variety of quality merchandise at discount prices.” And as Wal-Mart grew, management sought a firm that was a “discount department store chain offering a wide variety of general merchandise to the customer.” It was on these values and philosophies that Wal-Mart expanded. Wal-Mart has grown above and beyond the Arkansas store that opened thirty-nine years ago. It serves more than 100 million customers weekly in all of the 50 states, plus Puerto Rico, Canada, China, Mexico, Brazil, Germany, United Kingdom, Argentina, and South Korea. Wal-Mart’s current operating numbers are: Wal-Mart Stores 1,736 SuperCenters 888 SAM’s Clubs 475 Wal-Mart Neighbo… … middle of paper … …mount of inconvenience, Wal-Mart should implement more entrances and exits into different departments, such as the Garden department and the Grocery department, with signage that easily identifies what part of the store the entrances are leading too.In 1950, former J.C. Penny employee, Sam Walton opened Walton’s Five and Dime in Bentonville, Arkansas. By 1965, in the same small town Walton would open the first Walmart store unknowing that his investment would become the world’s largest retailer. By keeping sales prices low Walton was able to get ahead of the competition and successfully opened an additional store within the same year. Walton’s success continued and by 1967 his chain of stores had grown to 24 locations, and was bringing in about $12.6 million dollars in sales annually. Wal-Mart is an American national wholesale business that runs chains of huge discount branch stores and warehouses.1 on the Fortune 500 List and in 2003 and 2004 Walmart was named ′Most Admired Company in America′ by Fortune Magazine. Walmart grew from quiet beginnings in Sam M. Walton′s Ben Franklin variety store in Newport, Arkansas in 1945 and brother James L. Walton′s similar store in Versailles, Missouri in 1946. In 1962, Sam Walton started Walmart′s first discount store, but faced stiff competition from Kmart and Target, opening only another 14 stores by the close of the decade. Expansion became rapid in the 70s, however, to 276 stores in 11 states, when a public offering provided the necessary capital infusion. By the 80s Walmart was one of the most successful retailers in America.The growth of this company is sky rocketing and leaving any room for competition to keep up. Based on the current sales Walmart is ranked as one of the top retail if not best retail store in the world. It roughly brings in 256,329,000 net sales a year and its net profit is around 10,803,000 a year. With the turn around rates, an accurate calculation of current employees is not attainable, however there is a documentation of 1.3 million current associates worldwide. This includes stores, clubs and 10 international countries. Wal-Mart went to public in 1970, and it became the first company to reach 1 billion within 9 years. Up to 2004 Wal-Mart has 4,906 store world-wild, and 9 billion in profit. Despite some of controversial issues about its operation approaches, Wal-Mart’s dramatic rapidly growth is phenomenal in business community, and its successful business model has been eulogized world-wild. There are several key competitive edges that keep Wal-Mart successfully maintaining its leading position in the industry. First of all, Wal-Mart’ multiple store formats allows Wal-Mart to extend their customer base. First, let’s take a look back at how the company got started. Sam Walton opened up the very first Walmart on July 2, 1962 in Rogers, Arkansas. By 1967 the Walton family owned 24 stores ringing . WalMart Stores, Inc. (Walmart) is the largest retailer in the world. In 1962, Walmart was founded by Sam Walton in Rogers, Ark. In 1962, the first Walmart Discount Store in Rogers, Arkansas opened by Sam Walton. It is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. To achieve higher sales volumes Sam Walton made the decision by keeping lower sales prices than his competitors by reducing his profit margin. About Walmart Starting off as a small discount store, Walmart is now the largest retailer in the world that has been around for 50 years and counting. Walmart was founded by the Waltons, co-founder Sam M. Walmart has 11,695 stores all across the world being visited by over 260 million customers weekly. Walmart’s main focus is their prices, “selling more for less”. Walmart stores are formatted in different ways like; the Walmart Supercenter, Walmart Discount Store, Walmart Neighborhood Market, and an online store. With having such a large assortment of products, it makes it more convenient for a customer to come in the store buying everything they need at one time. Three of the strengths that were recognized in the company include its powerful retail brand, being a retail industry leader in the terms of growth and experience and its core competence in the use of information technology. Wal-Mart is well known all over the United States putting the nation under one name which is the Wal-Mart stores. It is a global company that has a powerful retail brand meaning it is highly recognized and is already a household name. It has established a reputation making it a promising business to support by other companies. It has been one of the pioneers in the business so it has the edge over other small time players in terms of growth and years of experience in the business sector. Lastly, its advanced information technology has helped Wal-Mart to manage all its stores around the world that enables the management to supervise and take quick cost effective decisions. Weaknesses to Overcome Among the weaknesses found in the company involved huge p of control, lack of specialization or focused in selling products and the company’s global operations has presence in relatively few countries. Having huge p of control in the US alone means huge responsibility. Aside form that the business is highly diversified in both the strategies and personnel. The administrator down to the smallest level of the organization should have proper coordination so as to ensure the companies smooth operation. The company lacks focused in the services and products it provide since it covers much items from food, clothing or apparels, grocery items, toys etc. which will not allow them to specialize like other stores that is known for their particular products. Unlike other global companies which have covered almost all countries in the globe, Wal-Mart seems to be left behind with other companies in the global market. External environment Opportunities to Exploit There are opportunities foreseen in the company that must be taken into consideration like the capacity for mergers and strategic alliances, opportunities for future business expansion and having a diversified store types. Mergers and business alliances have become popular nowadays as global competition continues to grow. It is possible for the business to merge with other companies with specialization like in healthcare or technology to upgrade its infrastructure. The company should study this possibility because it can help the business in the long run. Business expansion is not impossible within the company as it has the financial capability and the expertise to expand more. There are other countries haven’t reach by Wal-Mart and where it can serve as potential market. Lastly it has been a diversified store so it can continue to offer more services and products and serve the consumers even more with diversified services. Threats to Overcome The expected company threat for the operations includes the factors like being the biggest target for high competition, exposure to political problems and intense price competition. Wal-Mart is look upon by those in the same business and they may not let Wal-Mart to monopolize the industry. Competition is always present and there is a possibility that competitors like Costco and other businesses will look for ways to reach the top. As a leading organization in the country they can be influence by political problems and issues as the public patronized them.They will be involved in political issues since their highly influential. The price of consumer goods offered by Wal-Mart had decrease greatly due to outsourcing. Many companies have started to outsource that had lead to high price competition between companies in this industry. Price competition will be one of the biggest threats since companies will look for ways to make their prices lower and affordable Sam Walton grew up in a family of merchants. He learned the retail business from his parents who owned a department store. He wanted to do something different by creating a discount department store to sell relatively cheaper prices than other retail competitors (Robert, 2010). Sam Walton eventually decided to give up his business with family and started to open his own Wal-Mart store instead. He bought a former Kmart store and managed to build it into an international retail giant through discipline, innovation, and the hard work of its employees (John, 2012). Sam Walton was known as one of the greatest leaders in American history because he led the company to great successes. To develop Wal-Mart’s manufacturing processes, he made sure that safety standards are set high enough for its employees. He also worked hard on improving warehouse efficiency by using automation (Bob, 2010).Walmart’s main focus is their prices, “selling more for less” (Wang, Jiaqi & Guest, 2006). Walmart stores are formatted in different ways like; the Walmart Supercenter, Walmart Discount Store, Walmart Neighborhood Market, and an online store. With having such a large assortment of products, it makes it more convenient for a customer to come in the store buying everything they need at one time (Wang, Jiaqi & Guest, 2006). Three of the strengths that were recognized in the company include its powerful retail brand, being a retail industry leader in terms of growth and experience. Another strength is that the company’s IT systems are advance that enables the management to take quick decisions (Buck, 2002). The weaknesses include its gigantic control, lack of specialization and its global presence. The large amount of control leads to enormous pressure and responsibility. Aside from that, the business is highly diversified unlike other businesses which has specialized in one type or service. Lastly, there is a little presence of Wal-Mart stores in some countries around the world making it less competitive to other global companies which have presence in almost all countries (Wang, Jiaqi & Guest, 2006). The opportunities seen by Wal-Mart include mergers and strategic alliances, future business expansion through different store types and having a neighborhood market.
