WalmartEssay Preview: WalmartReport this essayCase Analysis: Wal-MartHistory/Development/GrowthSam Walton founded wal-Mart in 1962. Much of Wal-Marts success can be attributed to him. He was very simple and ran his company that way. He emphasized hard work and ambition. When the company was in its earlier stages he made it a point to visit every Wal-Mart once a year. He didnt just visit each Wal-Mart and talk with management. He would lead a cheer with the associates. The term associates, which he picked up from his experience working for JC Penneys. He also ran a Ben Franklin franchise with his brother that became extremely profitable. He eventually lost the lease on the store and founded Wal-Mart. They originally started off with 15 stores in the state of Arkansas. David Glass took over as president of the company in 1984. Then in 2000 Lee Scott was named CEO. Scott happened to be recruited by David Glass early in his career. Wal-Mart is now the largest retailer in the world with revenues of 165 billion.
Internal Strengths and WeaknessesAt first glance Wal-Mart seems to be exactly like the next retailer such as Kmart. There are a few distinguishing characteristics that separate them from the rest. First, they always build distribution centers before opening store locations, which saved costs on distribution overhead. Second, they have the most sophisticated inventory system. It operates in real time. As soon as an item is scanned at checkout it is directly sent to inventory and new products are automatically ordered. This process also helps with speedier projections and sales information. Third, they have an outstanding company culture. The same culture that Mr. Sam himself had emulated. Along these same lines, they emphasized a high value for associates, which is what they call their employees. As well as being more service oriented. They also found the delicate balance between having low prices and appearing too cheap.
External EnvironmentDuring the 80s and early 90s retailers when through some difficult times. There was a large increase in competitive pressure, which resulted in much lower margins. At the time most households did not have much discretionary spending. Therefore consumer spending was very limited. There was only enough money for the “essentials.” The entire economy was in a recession. Around 1998, unemployment was at an all-time low. Total household income was up and inflation was very low. All of a sudden buying power was higher and consumers were willing to buy. The United States is still experiencing one of the longest periods of economic expansion in its history.
The recession of the 1980s in the U.S., as we all know is the longest since 1929. There’s also a certain “solution” that has been introduced in the past few decades.
1>The U.S. government may have a very weak incentive to invest in this country or at any time for the betterment of the long term community. The government seems unwilling to give its best-rated citizens what they’re willing to put in their pockets at a discount at the expense of other members of our society. Even then, our people won’t take them seriously.
2>It’s difficult for any government to create a mechanism that gives the public and society the opportunity to participate in private business, by providing a mechanism to create the incentives to create an economy, as is typical of today’s government. This, and the current recession, is one instance of this problem.
3>As the nation grows wealthier, people are becoming more and more affluent that, at the time of our country’s founding, was a small elite. It was this elite that had the opportunity to create a stable economy. The people, especially those of the higher and middle class, made sure that they were able to create prosperity through economic growth that could support people. A nation without a stable economy will not have the economic growth expected of a national economy.
4>The middle class is not an ideal economic group for providing for a stable prosperity. The most important factor for a stable economic structure with an adequate share of the private sector and a stable and fair distribution of wealth is that the people with the best financial position receive the benefits from economic growth. The middle class does not need private sector jobs, but does need them. It’s not easy for the middle class to get by as an average citizen that way as more and more people are entering the workforce. Most Americans are on a high retirement income. They need to retire and help families.
5>Government should support people to stay at home as much as possible, pay down their debts and reduce stress. Governments do not have the power to create a safe and secure economy (just as the government cannot create a health insurance program) because of the strong and stable middle class.
6>Government has some responsibility in creating the national economy based on the facts and evidence of the past 40 years. In fact, the federal government may not be able to create such a system without some major assistance.
7>If the rich have the opportunity to buy and control future government policy and are willing to sacrifice their own interests to secure their financial security, then we ought to follow