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History Of Walmart Essay

The History of Walmart Essays

2030 Words9 Pages

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. The business is the world's second largest company, according to the Fortune Global 500…show more content…

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. The business is the world's second largest company, according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Wal-Mart is a family-owned company, and is controlled by the Walton family, who possess 50 percent of Wal-Mart. It’s also the largest grocery seller in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America. Wal-Mart helps people around the world save money in retail stores, online and through their mobile devices. More than 245 million customers and members visit their 11,000 stores each week under 69 banners in 27 countries and e-commerce websites in 10 countries. With 2013

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Wal Mart History and Strategy

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Introduction
Sam Walton Founder of Wal-Mart graduated from the University of Missouri in 1940 with the aspiration of all college graduates to go work for a good company and make good money doing so. After being drafted into the war he came back ready and eager to go into business for himself. He was a quick learner and with great instincts learned from other retailers' successes and was adept at garnering ideas for improvements from employees and promptly took those ideas and created his own low price retail store called Wal-Mart. The company grew and Sam proved to be an effective visionary leader. His folksy demeanor and talent for motivating people, combined with very hands-on management style and obvious talent for discount retailing, produced a culture and set of values and beliefs that kept Wal-Mart on a path of continuous innovation and rapid expansion. Wal-Mart emerged as the premier discount retailer in the U.S in the 1980s every one came to know Sam Walton. He was a community spirited man who was concerned for his employees but also a devoted family man who epitomized the American dream and demonstrated the virtues of hard work. Sam Walton's vision before his death in 1992 was to become a 125 billion dollar company by 2000 but his predecessor David. D. Glass not only beat that target by two years but also pushed revenues from 20.6 billion to 165 billion. When David Glass retired in 2000 H. Lee Scott took over his reign and has continued the dominance and growth of Wal-Mart with sales of 100 billion matching its growth for the first 35 years.
S.W.O.T Analysis
The greatest strength for Wal-Mart from its start in 1969 to this day has been the vision and dedication of the top level management CEO's David Glass and current CEO H. Lee Scott and no one can deny Sam Walton the founder for his great vision that he made become crystal clear. From the founding to this day Wal-Mart's top level management has been striving to come up with greater ways to bring Wal-Mart at level it is today and keep it at tops of all retailers and companies world wide. Wal-Mart's greatest strength after its management is its size which management has helped it to grow with increasing sales and net income since 1993. The way they have implemented there strategic strengths in the industry is first by coming up with multiple store fronts to reach all markets and segments of people.

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They have created a careful strategic planning on where and when to open new stores. There geographic expansion strategy which focused on opening outward in to new geographical areas. Wal-Mart expands into adjoining geographic areas, saturating each area with stores before moving into new territories. This type of strategy created synergy by doing this by clustering new stores in a relatively small area, Wal-Mart could spread advertising expenses for breaking into new markets across all area stores, and a tactic the company used it used to keeps its advertising cost at 1% of sales compared to 2-3% for competitors. Wal-Mart although not the first but the best at everyday low prices having 8-27% below those of such leading supermarkets this in turn has been Wal-Mart's winning strategy against competitors in find all ways to cut cost and create synergy through the cost cutting there for keeping prices way lower than that of its competitors therefore being the most popular amongst consumers when it comes to low price retailing. Wal-Mart cut cost on many different levels but its most effective strategy it has found it with its suppliers. Its relationships with its suppliers is its main competitive advantage by having procurement management spend a lot of time with vendors and understanding there cost structure. Thus they made the negotiation process transparent, doing all it could to cut down cost and quote Wal-Mart an attractively low price. Some 200 vendors have established offices in Bentonville to work closely with Wal-Mart on a continuing basis where they are encouraged to voice any problems in their relationship with Wal-Mart and to become involved in Wal-Mart's future plans. Most vendors view Wal-Mart's single bottom line price and its expectation of close coordination as a win-win proposition not only because of benefits of cutting out "funny-money" costs but because they learn collaborative efforts and mutual data-sharing which often had tremendous benefits in the rest of there operations. In executing Sam Walton's strategic vision of become the largest low price discount retailer in the world they also increased shareholder's wealth every year almost five times more now in earnings per share than in 1993 (see graph exhibit 3). Wal-Mart has been the leader in its industry and growth rate of more than 32 countries because it has had many strengths but with all strengths there are weaknesses and although I did not see much I did see that Sam's club was not at the top of its game as all there rest of the other store fronts. Costco the main competition to Sam's clubs is over performing Sam's club with fewer stores and is the nation's biggest retailer of the fine wines (600million). As for opportunities and threats there are many opportunities and threats for Wal-Mart one is to clean up it recent public image and try to fight or settle the 6000 lawsuits it is facing right now. The law suites range from anti-trust and consumer issues to tort claims. A couple of lawsuits have potentially serious consequences like the alleging the company discriminates against women, which has potential to turn into the largest sex-bias class action ever. Wal-Mart also has the threats of having management put out brushfires instead of trying to grow and operate the business. All the threats Wal-Mart can use as opportunities to show the public that it is not a sex-bias company and exuberate what Sam Walton had which was care for the community and all of his employees. Also Wal-Mart has great opportunity in the east in countries such as Japan where they have acquired a minority interest in the fifth largest supermarket chain Seiyu. Wal-Mart has been and can try to implement some of its strategies of cutting cost and keeping prices low for Seiyu and they can turn Seiyu from the fifth largest to the largest supermarket and creating synergy through the acquisition and since they have a option to buy out up to 67% by 2007 they could really help expand their global market. Although Wal-Mart has seen a recent decline in the net sales increase they are still continuing to grow and the opportunity they have is to find ways to try to turn the sales increase around back to they 20% rate it was the beginning of the new century and under David D. Glasses era but it is hard for H . Lee Scott because David D. Glass did not have the threats that Scott and his management team is faced with currently with all the lawsuits, and bad media that Wal-Mart has endured in the Scott era.

Conclusion and Recommendation
Wal-Mart like many of the other cases we have analysized this year has had the same winning combination of all the leading companies. First it starts from the top with the management and founders than it trickles its way down to the heart of all companies which are there employees. The new face of business and attitude has taken a shift from employees being worked hard till they quit and just hiring a new face to the most valuable asset a company can have and all of our cases and the companies who are at the top of there game have realized. Wal-Mart being some what of an exception to this trend and I believe it has started to catch up with them as recent turbulence they have been facing. Wal-Mart employees are not compensated as much as other retail companies and I think a little over looking and it is what the Founder Sam Walton stood for because he was a great believer in his employees and there worth. My recommendation would be for Wal-Mart to do a little soul searching go back to its routes of putting there employees at the top priorities and I believe many of there problems not all will heal and the plane can fly smooth again.