Wal-Mart Stores, Inc.Save money, live better

Founded by Sam Walton, the first Wal-Mart store opened in Rogers, Arkansas, in 1962. Seventeen years later, annual sales topped $1 billion.

By the end of January 2002, Wal-Mart Stores, Inc. (Wal-Mart), was the world’s largest retailer, with $218 billion in sales.Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. And as for today, each week, about 200 million customers visit a Wal-Mart store somewhere in the world.

Wal-Mart maintains its slogan of "Everyday low prices", by keeping its merchandise's prices low

MissionWal-Mart’s mission statement states, we save people’s money so they can live better.

Wal-Mart’s Objectives

Providing the customers what they want, when they want it, all at a value

Treating each other as we would hope to be treated, acknowledging our total dependency on our associate-partners to sustain our success

Wal-Mart’s objective is to continuously expand into different, new markets

E.g. Wal-Mart’s proposed acquisition of a 51% stake in Massmart, a South African firm that owns265 wholesale and retail stores, and 25 more in 13 other African countries (the Economist, 2011).

Wal-Mart set up a few policies to achieve this,

Open door policy- managers doors are open to employees at all levels

Sundown Rule- answering employees, customers and suppliers questions on the same day

Grass Roots Process-capturing suggestions and ideas from the sales floor and front lines

3 Basic Beliefs and Values- respect for individuals, service to our customers, and striving for excellence

Cont…10-Foot Rule- making eye contact,

greeting and offering help to customers who come within 10 feet

Servant leadership- leaders are in service to their team

Wal-Mart Cheer- an actual structured chant that was created by founder Sam Walton to lift morale

Wal-Mart main strategiesBy Mike Duke, President and CEO. (2010)

Wal-Mart must become a truly global company

Keeping their culture strong. Wal-Mart had a unique culture which is the combination of a company culture and their business model.The philosophy Includes;

- Respect for every individual - Serving customers

- Probing for excellence

Wal-Mart main strategiesBy Mike Duke, President and CEO. (2010)

It must understand the business challenges and retailers. Therefore they must be able to solve and face those challenges i.e. technology.

They are playing bigger role on social issues that their customers are interested in. Assuring the social issues of the world would be critical in terms of environment and sustainability.And that is; - Achieving zero waste

- Use of renewal energy and - Sell products that sustain people

and environment.

SWOT Analysis

Wal-Mart Strengths• Customer oriented• Supercenters offer one stop shopping• Satisfaction guaranteed programs promoting customer goodwill • Leads industry in information technology• Strong community involvement

Wal-Mart Weakness• No formal mission statement  • Membership only for SAM’S Club• Keep poor performing employees on hand• Old fashioned store policies• Few women and minorities in top management

Wal-Mart Opportunities• Consumers want ease of shopping• Internet shopping growing• Similar shopping patterns worldwide• Retail sales expected to increase• Environment conscious consumers

Wal-Mart Threats• Regulation of Wal-Mart pharmacies• Small towns do not want entry of Wal-Mart• Bad media exposure for Kathie Lee Brand• Variety of competition nationally, regionally and locally• Substitute products more easily because of intense competition

Competitive advantage of Wal-Mart

Wal-Mart big competitors are K-Mart and Sears in U.S. So its competitive advantage lies in

Lower pricesSystems efficiencies (superior information

management)Supply Chain (this is the capability that has

enabled Wal-Mart to restrict inventory growth and are superior in distribution).

Wal-Mart is an organization that shows a strong culture. 

CEO of Wal-Mart and the Suppliers

Mike Duke.flv

Wal-Mart financial reportInternational SegmentInternational segment ; comprised of wholly-owned

operations in- Argentina, Canada, Germany, South Korea, Puerto Rico and

the United Kingdom;

- operations through joint ventures in China; and operations through majority-owned subsidiaries in Brazil and Mexico.

- International sales accounted for approximately - 16.3% of total Company sales in fiscal 2002 compared with - 16.8% in fiscal 2001 and- 13.8% in fiscal 2000.

Fiscal year from prior fiscal year income

(in billions) increase from prior year percentage of segment sales

2002 - $ 1,458 31.1% 2001 - $ 1,112 36.1%

2000 - $ 817

48.8%

Conclusion

Wal-Mart’s Future Growth Plans:The company expects to add 500,000 new jobs world wide during the next five years.Wal-Mart highest priority at the moment is to add 240-250 supercenters in the United States.About half of its 8,300 stores are now outside the United States.In addition to that, they will continue to add discount stores to the portfolio, about 40-45 of those.And then filling in markets where supercenters are already developed well, add neighborhood markets probably closer to 20-25 rather than the 25-30 that are there.

Recommendations/Solution

Wal-Mart should further strengthen its position of cost leader by increasing their steak in the warehouse club business through placing its warehouses in rural areas.

Wal-Mart should attempt to grow its Sam’s Club base as quickly as possible. The company will face many competitors, such as Price Club and Costco, who will pose a potential threat to its future.

The best way to prevent this threat is to obtain the first-mover advantage by building as many locations as possible in the shortest period of time.

Recommendations/Solution

Wal-Mart should obtain a strategic valuable asset, such as location if it follows the cost advantage strategy.

Wal-Mart should avoid large metropolitan locations. It should concentrate on locating clubs in markets whose population is between 100,000 and 200,000 people (example Cedar Rapids)