Wal Mart AnalysisEssay Preview: Wal Mart AnalysisReport this essayWal-Mart and the United States and Global EconomyAzusa Pacific UniversityTable of ContentsHistory of Sam WaltonBackground of Wal-MartManagement PhilosophyUse of Information Technology as a Competitive WeaponPurchasing PowerSupply Chain and Inventory ManagementSupply Chain and DistributionInventory ManagementExpanded Operation in GroceriesLabor Unions and Wal-MartRole of the Largest Company and Employer on Planet EarthStrengths, Weaknesses, Opportunities, and Threats Analysis (SWOT)STRENGTHSWal-Marts broad inventory and customer baseThe ability to customize to and meet any customer segmentPartnershipsWal-Mart management and Corporate CultureWEAKNESSESOPPORTUNITESOther potential growth opportunitiesTHREATSReferencesSources of ImagesHistory of Sam WaltonSam Walton was born on March 29, 1918 in Kingfish, Oklahoma. While growing up in Missouri, he was an active student of retailing. His first job was working for his fathers store while he was attending school (Galiano, 2005). Later, Sam attended the University of Missouri and majored in Economics. During his senior year of college Sam was elected Senior Class President (Kennon, 2005).
After college, Sam started his career in the retailing business by running several Ben Franklin five-and-dime franchise stores in Arkansas. He learned some of his first lessons about buying, pricing, and passing good deals on to customers from Harry Weiner, a manufacturers agent from New York. Sam learned “by cutting your price, you can boost sales to a point where you can earn far more at the cheaper retail than you would have by selling them at the higher price” (Wal-Mart Stores, 2005).
Sam was convinced that this new discount retailing concept was the wave of the future. If a local barber named Herb Gibson could operate a chain of profitable discount stores outside the same towns where Sam ran his variety stores, Sam knew he could do even better (Huey, 1998). By this time, Sam owned 15 variety stores and was a rich merchant. He was in fact so rich, that he and his wife, Helen, fronted 95 percent of the money needed to open the first Wal-Mart store in Rogers, Arkansas in 1962 (Wal-Mart Stores, 2005).
Surprised by the initial success, Sam later opened up a small chain of Wal-Mart stores across several states. Prior to opening a store, he would fly over small towns and study the lay of the land. He would then buy farmland at major intersections and order another Wal-Mart store to be built (Huey, 1998).
In 1970, Sam was one of the leading pioneers of offering a profit sharing plan for his employees. Employees at Wal-Mart were offered stock options and store discounts. Sam believed that “individuals dont win, teams do” and that happy employees meant happy customers and more sales. By making an employees success dependent on the companys success, the employee would care more about the company (Galiano, 2005).
Sam was never bothered by the fact that many small-town merchants were driven out of business. He believed that any merchant could compete if they were willing to make major changes and to adapt to the new retailing philosophies. Sam saw where the future of retailing was going, so he chose to eat rather than be eaten (Huey, 1998). Wal-Mart soon passed the sales revenue of their competitors K Mart, Target, and Sears. “The secret of successful retailing is to give your customers what they want. And reallyyou want everything: a wide assortment of good quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; …a pleasant shopping experience” (Wal-Mart Stores, 2005).
The Problem
Many people are confused with the “problem” of “selling small-area stores based on size.” If that was a big deal to you, you’d need to understand what makes a “small” grocery store a “small-area store.”
Small grocery stores are smaller than their neighbors. They don’t have an online store, so they don’t have an electronic checkout system. They are much easier to find than large grocery stores. However, a retailer should have been open and honest as much as possible about where they were selling, where it was selling at, and who it was selling to. If the customer wanted to purchase some goods, it would have been clear to anyone who entered the bar that this “shop” was “small” or “high” on the shelves. To be fair, this is also something that retailers could have done differently. However, a “low” store with “great packaging” could have sold more to the lowest bidder(s) and less for the highest bidder(s) (See Pannell & Stoner (2005), Pannell, 1995). However, a “medium” or “high” store with “great packaging” could have sold more to whoever entered that place than it did to the lowest bidder(s) who entered that place. This was particularly true, so many times, in the retailing revolution, when the high level competition and lower quality were the main motivating factors behind the “sell big or go home” mentality (pannell, p. 392) .
Even if you’re just a “small-area store” merchant, as described above, it is your responsibility to provide a strong customer service and a wide selection of products. If you need something or are looking to buy from a large store, ask your store assistant about it. The customer will likely not ask where they can get a “little bit of this stuff.” Ask who will ship the product(s) and ship it (as a package). Ask them about local and regional retailers. Tell them where your store stands outside of their city. Ask them about their local location and ask them to make their purchases in their own stores.
It is also your responsibility to do all of this with good judgment. Do not try to make your shoppers look like criminals or criminals with their own pockets to get your product (e.g., online or in their own stores), or to drive them off their way to a crime scene (e.g., in your own stores). Tell the store assistant to bring a flashlight and a flashlight case if they want to look at you closely. Don’t put their foot down to tell them to get up behind their car. If their car pulls over, try and stand at the side of the road behind their car to see what happened to
The Problem
Many people are confused with the “problem” of “selling small-area stores based on size.” If that was a big deal to you, you’d need to understand what makes a “small” grocery store a “small-area store.”
Small grocery stores are smaller than their neighbors. They don’t have an online store, so they don’t have an electronic checkout system. They are much easier to find than large grocery stores. However, a retailer should have been open and honest as much as possible about where they were selling, where it was selling at, and who it was selling to. If the customer wanted to purchase some goods, it would have been clear to anyone who entered the bar that this “shop” was “small” or “high” on the shelves. To be fair, this is also something that retailers could have done differently. However, a “low” store with “great packaging” could have sold more to the lowest bidder(s) and less for the highest bidder(s) (See Pannell & Stoner (2005), Pannell, 1995). However, a “medium” or “high” store with “great packaging” could have sold more to whoever entered that place than it did to the lowest bidder(s) who entered that place. This was particularly true, so many times, in the retailing revolution, when the high level competition and lower quality were the main motivating factors behind the “sell big or go home” mentality (pannell, p. 392) .
Even if you’re just a “small-area store” merchant, as described above, it is your responsibility to provide a strong customer service and a wide selection of products. If you need something or are looking to buy from a large store, ask your store assistant about it. The customer will likely not ask where they can get a “little bit of this stuff.” Ask who will ship the product(s) and ship it (as a package). Ask them about local and regional retailers. Tell them where your store stands outside of their city. Ask them about their local location and ask them to make their purchases in their own stores.
It is also your responsibility to do all of this with good judgment. Do not try to make your shoppers look like criminals or criminals with their own pockets to get your product (e.g., online or in their own stores), or to drive them off their way to a crime scene (e.g., in your own stores). Tell the store assistant to bring a flashlight and a flashlight case if they want to look at you closely. Don’t put their foot down to tell them to get up behind their car. If their car pulls over, try and stand at the side of the road behind their car to see what happened to
By 1992, Sams vision of discount retailing turned him into one of the worlds richest and most respected businessmen. However, he lived most of his life largely unnoticed by the public or press. He was known to prefer pickup trucks over limos and the company of his family and dogs over that of investment bankers (Huey, 1998). Sam died on April 5, 1992, leaving his approximated $100 billion fortune to his four children and his wife. Just before he died, President George Bush presented Sam Walton with the Medal of Freedom, the nations highest civilian award (Wal-Mart Stores, 2005).
People often asked Sam what his secret was for Wal-Marts success. He answered that question by explaining ten simple rules he followed for building a better business (Walton, 1992):
Commit to your business and your goals. Believe in it more than anyone else.Share your rewards and your profits with your associates. Treat them as partners.Energize and motivate your colleagues. Money and ownership alone are not enough.Communicate all you know to your partners.Value your associates and appreciate everything they do for the business.Celebrate your success and dont get bogged down in your failures.Listen to everyone and figure out ways to keep associates talking.Deliver more than you promise and exceed your customers expectations.Work smarter than others. Control your expenses better than your competition.Blaze your own path. Swim upstream. Ignore conventional wisdom.