Wal-Mart Stores Inc.

A Case Study on Management Evolution

Arun Kumar Anala, Roll # 3, MPE-10

8/17/2012

This case study is an examination of how the Wal-Mart's management evolved.

ContentsCompany Background......................................................................................................................................3

Case background..............................................................................................................................................4

Executive Summary..........................................................................................................................................5

Introduction.....................................................................................................................................................6

Strategy Evolution............................................................................................................................................7

1. Market Penetration..................................................................................................................................7

2. Market Development...............................................................................................................................7

3. Product Development..............................................................................................................................7

Business Model..............................................................................................................................................10

How Walmart’s Business Model works?.....................................................................................................10

Validity of Walmart’s Business Model........................................................................................................11

The future of Walmart’s Business Model...................................................................................................12

Value Creation................................................................................................................................................15

Organization Structure...................................................................................................................................20

Miscellaneous.................................................................................................................................................22

Managerial work........................................................................................................................................22

History Timeline.........................................................................................................................................23

Conclusion......................................................................................................................................................29

Exhibits...........................................................................................................................................................30

Additional Reading and References................................................................................................................33

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Company Background

Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.

Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.

On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas when he noted the need for serving customer in small towns. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma. Retailers such as Kmart and Sears focused on big towns. This created an opportunity for Wal-Mart to fill people’s needs in rural areas. This small-town orientation is reflected in the company’s values, which emphasize maintaining good relationships with staff as well as suppliers. The focus on cost savings enables the company to offer “everyday low prices”, which has become the familiar company slogan.

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1970, and was soon listed on the New York Stock Exchange. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million Wal-Mart opened its first Texas store in Mount Pleasant on November 11, 1975.

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 Case background

Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth of goods last year. To get a sense of just how big Wal-Mart is today, consider these facts:

Wal-Mart employs 1.6 million people. To give us an idea of just how many people that is, Idaho, the 39th most populous state, is home to 1.4 million people.

Wal-Mart had sales of $312.43 billion in its most recent fiscal year, which ended January 31, 2006. By comparison, the second-largest retailer in the country, Home Depot, posted sales of $81.5 billion.

Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has 2,040.

Wal-Mart Stores Inc. branded as Wal-Mart since 2008 and Wal-Mart before then, is an American public Multinational Corporation that runs chains of large discount department stores and warehouse stores. The company was the world's largest public corporation in 2010 by revenue.

The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart, headquartered in Bentonville, Arkansas, is the largest majority private employer. Wal-Mart is also the largest grocery retailer in the United States. In 2009, it generated 51% 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 is reportedly the wealthiest company in the world, with approximately $288 billion dollars in annual sales. In 2004, Wal-Mart opened 242 new Supercenters around the country, and they plan to open over 1,000 Supercenters over the next 5 years—exploring the possibility of expanding their market into urban centers such as New York and Chicago.

According to Wal-Mart’s investor web site, As of September 30, 2005, the Company had 1,253 Wal-Mart stores, 1,876 Supercenters, 555 Sam’s Clubs and 95 Neighborhood Markets in the United States. Internationally, the Company operated units in Argentina (11), Brazil (151), Canada (261), China (49), Germany (88), South Korea (16), Mexico (730), Puerto Rico (54) and the United Kingdom (295).

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Executive Summary

Wal-Mart has grown into one of the largest discount retail stores in the world and has proven that the type of operation that they have is successful and effective. Although they are the industry leader, in the recent years their sales growth rate has not experienced such of an increase. The decrease of the slowing growth rate from their previous double-digit growth has begun to develop problems and serious concern for the company. They are now faced with the attempt to understand the symptoms and causes of the problem and how to regain their growth strength.

Internally analyzing with the VRIO system, Wal-Mart tends to still prove their strength. One of their largest strengths is the distribution system that they use. This decreases their cost and delivery time by remarkable numbers. Their use of the EDLP (Every Day Low Prices) executes the most success in being the lowest prices compared to their competitors. New systems have also now been implemented to decrease the cost of loss of inventory, shoplifting, or simply not having an item in stock. Although the company is so large they are able to stay well organized, one way in which they do so is by keeping all of the vice presidents of the stores in the headquarters to maintain use of internal strategies.

The analysis showed the Wal-Mart faces almost no threat of entry with because Wal-Mart’s economy of scale eliminates the immediate threat of new entrants into the market. With the products that Wal-Mart offers, there is a large chance for substitutes, but since the range is too large for smaller stores the only other substitutes are other large discount retailers. Threat of substitutes is not very apparent due to the fact that the number and size of Wal-Mart is much greater than any other supplier. Since it is difficult to measure name brand, the threat of buyers is apparent, although the biggest strength that Wal-Mart has is that the average consumer is price sensitive therefore they will continue to search for the low prices. These low prices are the main focus of the threat of rivalry. Wal-Mart still continues to remain very strong due to their wide variety and low prices.

Recently Wal-Mart approaches the maturing market leaving them in need of new market opportunities to retain or increase their sales and maintain competitive against their industry. Initially using the analysis conducted internally and externally once option would be to expand in select international markets. One struggle has been that some global markets are not becoming a strong profitable investment therefore if they would withdraw from these markets that are weaker and focus on the stronger global markets.

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Introduction

Wal-Mart serves customers more than 200 million times per week at 10,130 retail units in 27 countries. It employs more than 2 million associates globally, including approximately 1.4 million in the United States. Wal-Mart is one of the largest private employers in the U.S. and Canada.

For the fiscal year ended January 2012, Wal-Mart increased net sales by 5.9% to $443.9 billion and returned $11.3 billion to shareholders through dividends and share repurchases. Wal-Mart ranked first on the 2011 and third on the 2012 FORTUNE 500 list of the world’s largest companies by revenue.

Leadership

Wal-Mart’s board of directors is led by Chairman Rob Walton. In 2009, Mike Duke became the company’s fourth president and CEO.

U.S. Operations

Wal-Mart was founded by Sam Walton in 1962 with the opening of the first Wal-Mart store in Rogers, Ark. The company incorporated as Wal-Mart Stores, Inc. in 1969 and was first publicly traded on the New York Stock Exchange in 1972.

In 1983, we opened the first Sam’s Club membership warehouse and in 1988 opened the first Wal-Mart supercenter, which features a complete grocery department in addition to general merchandise.

Today in the U.S., Wal-Mart operates more than 4,400 retail facilities, including Wal-Mart stores and Sam’s Club warehouses. For fiscal year 2012, Wal-Mart U.S. net sales were more than $264 billion, and Sam’s Club net sales were more than $53 billion.

Wal-Mart.com is dedicated to supporting a seamless shopping experience whether customers are online, in stores or on their mobile devices. Customers can save more with free shipping options to stores or to home through options such as Site to Store, Pick Up Today and Home Free.

Wal-Mart International

Wal-Mart International operates more than 5,600 retail units in 26 countries outside the U.S. In fiscal year 2012, Wal-Mart International net sales exceeded $125 billion. Wal-Mart have created stores with different styles and formats to fit in with local customer needs and customs. More than 90% of international stores operate under a banner other than Wal-Mart.

I believe that this case study and practical knowledge will help us in our entire career to be a good and successful manager of an organization.

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Strategy Evolution

As determined by the IE Matrix, Wal-Mart fits into the category of grow and build strategies. Thus, the aforementioned strategies would fit Wal-Mart very well. All three of the strategies that we decided on are grow and build types. The three strategies that Wal-Mart would benefit most from are: market penetration, market development, and product development.

1. Market PenetrationThe market penetration strategy is when a company is seeking to increase the market share for present products or services in present markets through greater marketing efforts. This is also an appropriate strategy for Wal-Mart to implement because they can take advantage of the bankruptcy of K-Mart. Through the increase of Wal-Mart's marketing campaigns, they can attract and retain most of K-Mart's customers. Also, because K-Mart has been closing hundreds of stores, Wal-Mart has a distinct advantage of controlling markets where both Wal-Mart and K-Mart are located. Also, because of Wal-Mart's economies of scale against its rivals, they have the power to influence markets in their direction.

The company culture is also well suited for this type of strategy. The management of Wal-Mart has ingrained in the employee’s the core values needed to excel at increasing their market penetration. Again, their EDLP and Rollback campaigns can readily be diffused into markets where they do not have as much of a market share as they want. This will also have a positive impact on the company culture because of the increased opportunities available to current employees. As their market share increases, they would also probably begin to add to their product offerings in that area. This will, in turn, allow employees the ability to grow with the company and be promoted into higher positions.

2. Market DevelopmentThe costs involved with market penetration are not nearly as great as with market development. Wal-Mart only needs to increase its marketing campaigns in the target areas.

3. Product DevelopmentCreation of products with new or different characteristics that offer new or additional benefits to the customer. It may involve modification of an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer want or market niche.

Product development is a broad field of endeavor dealing with the design, creation, and marketing of new products. Sometimes referred to as new product development (NPD), the discipline is focused on developing systematic methods for guiding all the processes involved in getting a new product to market.

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There are a number of organizations dedicated to supporting product development professionals, such as the Product Development and Management Association (PDMA) and the Product Development Institute (PDI). According to the PDMA, the organization's mission is "to improve the effectiveness of people engaged in developing and managing new products - both new manufactured goods and new services. This mission includes facilitating the generation of new information, helping convert this information into knowledge which is in a usable format, and making this new knowledge broadly available to those who might benefit from it."

The process of product development is-

Idea Generation. Idea Screening. Concept Development and Testing. Business Analysis. Beta Testing and Market Testing. Technical Implementation. Commercialization (often considered post-NPD). New Product Pricing.

The slogan of Wal-Mart is “Always Low Prices. Always.” Wal-Mart’s main strategy is to focus on a specific type of customer and the needs of that customer, namely, the budget customer who doesn’t want to spend a lot for the things they buy. Hence, the middle circle is the focus of their strategy. This main focus permeates every decision they make regarding the other two circles.

“Almost anything as long as it doesn’t cost a lot.” You’ll never see expensive products in a Wal-Mart store. This is because whenever they decide to offer a new product to their customers, the main criteria it has to meet is affordability. It must focus on their main strategy of meeting the budgetary needs of their target customers.

While their Web presence is increasing, their main focus has been strategically located retail stores. You’ll probably never see a Wal-Mart store located in an expensive neighborhood. That’s simply not their target customer and they know it. Literally every decision they make about accessing their customers is based on the main focus of targeting the budget customer. I know this in part because I live in Utah. Utah residents are well known for their conservative spending habits. From my home I can drive to four different Wal-

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Mart stores within 30 minutes. I’m told that these four stores are among the highest revenue-generating Wal-Mart stores in the world.

So, Wal-Mart’s circles of business strategy look like this:

Wal-Mart knows that by choosing this strategy there will be tradeoffs involved. There will be desirable products that they won’t sell, customers that won’t shop at Wal-Mart, and geographic markets in which they will never be able to put a store. However, they’re willing to accept these tradeoffs and let those customers go elsewhere. As with Jiffy Lube, they understand that their chosen strategy is determined as much by what they’ve chosen not to do as it is by what they’ve chosen to do.

Considering those strategies and functions, it is recommended that, with a saturation of stores in the rural areas in America, Wal-Mart can successfully employ the same strategies for setting up stores in the cities.

The difficulties that Wal-Mart may encounter are-

Being number one means that you are the target of competition, locally and globally. Being a global retailer means that you are exposed to political problems in the countries that you

operate in. The cost of producing many consumer products tends to have fallen because of lower

manufacturing cost. Manufacturing cost has fallen due to outsourcing to low-cost region of the world. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.

Because of a huge span of management, Wal-Mart could leave it weak in some areas. Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not

have the flexibility of some of its more focused competitors.

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Business Model

How Walmart’s Business Model works?

Walmart’s value proposition is based on offering Everyday Low Price (EDLP). This is the core of Walmart’s Business Model, and the rest of the key features of Walmart’s Business Model are aligned to keep the everyday low price. This proposition implies that the customers do not need to wait for sales to have the best deal possible. Besides, not only the sells convenience is associated by providing the wide range of products and services to choose from, but also with one-stop is possible to make all the shopping needed, from groceries to pharmacy. Walmart’ customers save time and money.

Distribution channel

To deliver its value proposition Walmart communicates with and reaches its customer segments with its distribution channels which are owned and direct, and brings higher margin. Walmart also is corresponding with its customers mainly through mass media and other ways which have a low cost, such as internet.

Customer relationships & Customer segment

Walmart establishes a customer relationship is based on self-service and automated and towards co-relation of some products once it is possible. Walmart tends to reach to the mass market toward mass customization. Walmart’s customers can be divided into three groups: “brand aspirations”, people with low incomes who are obsessed with brand; “price-sensitive effluents” wealthier shoppers who love deals; and finally “value-price shoppers” who like low prices and cannot afford much more.

Key activities

The key activities which are needed to run Walmart’s business model are:

Purchasing goods Their delivery Total cost control

Other activities would be to create products that will cover needs of a specific customer segment and to control the brand, which has been developing lately. Walmart’s technological edge is in its inventory control, logistics, and distribution. The ability to move products place to place quickly and efficiently keeps the costs down as well as the time system in combination with logistics force permits Walmart to have accurate time information of the products in the stores shelves that allows restocking automatically. In addition the logistics involves the suppliers and workforce of 85000 employees, 147 far reaching distribution centers, transportation offices, more than 100.000 tractors and trailers and 8.000 drivers .

Key resources

The key resources of Walmart classified in 3 categories. First, the physical resources which are owned by it like stores and logistics. Second its human resources, experienced managers and stores managers, and

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finally the company culture. Walmart culture is based on restless effort at constant self-improvement, discipline and loyalty.

Key partnership

Key partnership is a strong buyer-supplier relationship in which suppliers were considered as close partners of Walmart. They also are part of the value chain of each other and it provides suppliers the chance of accessing to a large market. However it made suppliers, who wish to take advantages of its broad market, to keep their prices and costs low and therefore, suppliers give the control of their own business and negotiation advantage to Walmart. Walmart also creates economies of scale that optimizes its cost structure.

Revenue stream

Walmart Revenue Streams that generated from its customer segments are basically come from retail sale, such as music downloading with fixed menu pricing. Walmart also drive revenue from selling its own brand, produces by others to cover a segment not cover by other suppliers. Moreover, it takes advantage of selling goods before paying to its suppliers.

Cost structure

The Cost structure is cost-driven model since it is focused on minimizing costs wherever it is possible and it is characterized by economies of scale. The expansion of Walmart allowed it to benefit from economies of scale and reducing its cost besides its technology let it to grow and caused to lower its costs; hence, economies of scale at both the chain levels and stores strengthen Walmart’s advantage, rather than being its root cause. Walmart’s financial discipline is well known as well as their tendency to pass operating costs to suppliers.

Validity of Walmart’s Business Model

Walmart’s wholesaler Business Model is based on cost leadership business strategy. Using Chesbrough’s business model framework classification, Walmart’s Business Model is an adapt platform. The company is committed to experimentation, and its key suppliers have become business partners, sharing the technical and business risks, integrated into the planning processes of the company. This type of business model is a valid one, very profitable. Walmart’s Business Model is a role model, a model to be copied but on the other hand, is hard to imitate since it has constantly adjusted and improved their processes over time.

Although its size and economies of scale is a competitive advantage, there is a downturn on the way it does business. Consumers have expressed concerns about the so called “Walmart effect”, the high cost of low prices . Firstly, Walmart eliminates local competition creating a monopoly effect. There is a lot of discussion on the press and academics about Walmart’s effects on the communities where stores are settled. Normally, the effects can be summarized in reduction of local competitors, which implies reduction of local jobs.

Walmart job creation is not always sufficient to cover the jobs lost. In relation with its suppliers, it comes to a point that no more efficiency can be done. Eventually, the only way to reduce costs is to manufacture

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products outside the USA, to countries with lower labor costs and with fewer regulations, specially labour and environmental, which means Walmart’s suppliers can be less social responsible than Walmart.

Walmart’s responsibility in the globalization and the US’s flatness economy is perceived by the consumers. These have been current concerns for Walmart while developing its CSR strategy during the last five years.

On the other hand, Walmart’s cost control means that nothing can be expended on other services that adds value to the customer experience. While Tesco centers itself in improving the customer experience (The secret of Tesco’s expansion success), Walmart almost only does in improving effectiveness.

Walmart has identified correctly the customers segment to which deliver its value proposition. However, this is not appropriate in every market. And Walmart can only approach the segment that it is already serving. Walmart has been so successful in offering itself as a discount retailer that nobody expects premium products – if there are, the suppliers branding suffers . Also, other competitors are taking advantage on the inability to adapt to different segments.

Another negative aspect of Walmart cost control is the relationship with its employees, associates. Cost control with the core value around which Walmart has been built, hard work, implies that associates and even managers and work too many hours, applying sometimes illegal practices (e. g. closing the associates inside the stores, women discrimination etc.). Walmart’s is against unions, since union workers’ salary are higher than non-union employees.

The future of Walmart’s Business Model

Walmart's success is based on its business model which focused on satisfying its customer needs with low price products. However, due to the environmental changes and some factors of the business model that can be easily imitated by its competitors, Walmart has to continuously modify its competitive strategy and to develop its business model to maintain its competitive advantage in the global market.

David Glass, Director and former CEO of Walmart Stores, Inc., said, "We have made it to where we are today by appreciating and satisfying our customers and associates, they are the people who make the difference. Walmart focuses not only on its customers' needs, but also encourages participatory involvement of its employees. Furthermore, its information technology strategy involves a sophisticated data managing” (John, F. Kennedy, 2005). Randy Mott, former Senior Vice President and Chief Information Officer explained, "Our investment in data mining is part of Walmart's drive to deliver what its customers want: the right item, at the right store, at the right time and at the right price."(John, F. Kennedy, 2005)

In order to achieve the objectives of satisfying customers, enhancing shareholder value and creating the profits, Walmart has three important priorities: growth, leverage and returns.

Walmart is continuing to grow around the world through a number of opportunities from opening new stores, entering in new markets, making acquisitions, integrate online channels, and develop new, innovative formats to provide customers to experience the Walmart brands. Based on the three important priorities, Walmart keeps on improving the supply chain predictability and visibility to affect greatly the amount of inventory safety stock that a retailer must maintain in its network. Walmart not only focuses on

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the tactical efforts to lower costs and improve gross margin, but has looked into the impact of reducing inventory and storage or handling costs associated with excess safety stock. Currently Walmart maintains just under less 40 days of inventory on hand throughout its massive network (Kinshuk Jerath 2008). With one day reduction in inventory, Walmart can create approximately $1.7 billion of additional cash flow from operations, which is a mean of low cost, and achieve generate profitable revenue.

Low cost strategy

The core strategy of Walmart is "Everyday Low Prices" as its slogan states, in which the undercutting of prices is the basic principle of Walmart's business, which means low price products for customers. In order to achieve the strategy, innovation in Walmart can generate an assessment of its current business model and find an appropriate way to develop or change (Drucker, 1994).

Information technology innovation

Walmart utilizes information and communications technology in order to aid in the decision-making process and advanced the effectiveness on the response to consumers, as well as through the information technology to control the process of logistic (Chesbrough, 2003). Technology innovation of Walmart’s business model involves process and service technology innovation, both of which can reduce the operation cost and time. Also the price of products can be reduced through the process of delivery and storage using new technology. And customer service within new technology will add more value in the same price and create a positive image for customers. In order to keep track of its logistics Walmart tries more and more to rely on so-called radio frequency identification (RFID) technology (Wailgum, 2008). This technology uses a system to communicate through electromagnetic waves in order to exchange data between a terminal and the electronic tag which is attached to the delivery box. The purpose of this is their identification and tracking. Some of these tags can be recognized from a few metres away others from even greater distances.

Human resource management innovation

Based on new ideas of relationship of its employees within the organization, Walmart develops its human resources policy to adapt the changing environment. All of the employees of Walmart from top manager down to the clerks are called "associates", in which everyone receives a great autonomy and continuously keep communicating according to their performance within the company and about the operations of the stores (Demense, R. &Gardner, N. 2002). This relationship and Walmart’s efficient incentives provide a strong safeguard for achieving its strategy. The recruitment of people with the proper skills, competence and working experience can influence the morale of all employees. The problem with motivation as well as the remuneration of Walmart associates has been given a lot of coverage in the news in recent years. These articles complain about low wages and sparse benefits for the ordinary workers (Luce, 2005). Therefore, financial incentives and other forms of motivations must be constantly evaluated and adapted to ensure the satisfaction of the associates.

Organization and management styles

The management of Walmart has been based upon the values and principles of the founder. The managers always keep in touch with their customers as well as the operations on the retail stores, which leads to an

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effective communication between each store and the company's headquarters . Walmart puts a lot of effort on the innovation and development of its organization and management.

Suppliers relationship development

In order to achieve the objective of low price, Walmart used to adopt the centralization purchase, in which all the transactions took place at the headquarters of Walmart. Furthermore, Walmart also refused to negotiate with manufacturers from the year 1992 and only allowed them to supply no more than 2.5% to avoid the dependence on a manufacture. However, in order to compete in the global market, Walmart also needs to establish closer cooperative transactions with its local suppliers, which aligns with the needs of its consumers and lowers the inventory cost. Moreover, since 2008 Walmart (and its subsidiary Sam’s Club) also requires its suppliers to attach RFID technology to their deliveries. Otherwise these suppliers can face tough fines of up to 2-3 US$ per delivery .

Distribution and storage

The cost of distribution and storage is a big part of the product’s selling price. Thus, Walmart handles 80% of the purchases that are directly shipped in the warehouse in order to reduce the cost of logistics. However Walmart is still continuously upgrading and innovating its process and system of distribution where the products that arrive via the inbound trucks are loaded and unloaded on outbound trucks without sitting first in the inventory of the warehouse.

Social responsibility and sustainability

Dealing with the imitation of low cost business model by competitors in the context of a global market, Walmart needs the innovation of technology, organizational management, relationship with suppliers and distribution services. Furthermore, Walmart’s objective to establish itself as a key player in the society must incorporate cost innovation capabilities and social responsibility into their future business model which looks promising as indicating ways to sustainability.

During the last years Walmart has therefore tried to rebrand itself as a pioneer in environmental sustainability. By 2014 they want to reduce the phosphates in detergents by 70 percent and the amount of packaging material by 5 percent until 2013. They have classified their involvement into five categories: sustainability, feedback to communities, care for the children, support for education, and disaster relief. For the last 13 years these employees have spent more than 200,000 in “voluntary” work for “public interests” in their communities (Walmart Social Responsibility Report, 2012).

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Value Creation

In 2011, Walmart and the Walmart Foundation gave $958.9 million in cash and in-kind contributions around the world. This includes $872.7 million in cash and in-kind gifts in the United States and $86.2 million in cash and in-kind gifts in international markets. In addition, Walmart associates volunteered more than 1 million hours that resulted in more than $13 million in grants to local nonprofits.

Wal-Mart strongly believed and constantly emphasized on strengthening its relationships with its customers, suppliers and employees. The company was very vigilant and sensed the smallest of changes in store layouts and merchandising techniques to improve performance and value for customers. The company made efforts to capitalize on every cost saving opportunity. The savings on cost were always passed on to the consumers, thereby adding value at every stage and process.

Wal-Mart also enjoyed the benefits of low transportation costs since it had its own transportation system which assisted Wal-Mart in delivering the goods to different stores within (or sometimes less than) 48 hours. Transportation costs for Wal-Mart were estimated at approximately 3% of the total costs as compared to 5% for their competitors. Having its own transportation system enabled Wal-Mart to replenish the shelves four times faster than its competitors.

Wal-Mart priced its goods economically and the prices varied from day to day. The company enjoyed good bargaining power as it purchased huge quantities. This enabled it to price its products competitively and pass on the benefits to the consumers. The company offered higher discounts than any other retailer and they earned good revenues in the form of higher volumes. Low pricing ensured that the sales volumes were high and consistent.

The benefits of an efficient supply chain management system included reduction in lead time,faster inventory turnover, accurate forecasting of inventory levels, increased warehouse space, reduction in safety stock and better working capital utilization. It also helped reduce the dependency on the distribution center management personnel resulting in minimization of training costs and errors. The stock-out of goods and the subsequent loss arising out of it was completely eliminated.

Wal-Mart’s supply chain management practices resulted in increased efficiency in operations and better customer service. It eliminated old stocks and maintained quality of goods. Bar coding and radio frequency technologies enabled accurate distribution of goods. Cross-docking also helped Wal-Mart to reduce inventory storage costs. It also helped to cut down the labor and other handling costs involved in the loading and unloading of goods.

MANAGING THE SUPPLY CHAIN

PROCUREMENT AND DISTRIBUTION

Wal-Mart always emphasized the need to reduce its purchasing costs and offer the best price to its customers. The company procured goods directly from manufacturers, bypassing all intermediaries. Wal-Mart was a tough negotiator on prices and finalized a purchase deal only when it was fully confident that the products being bought were not available elsewhere at a lower price.

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According to Claude Harris, one of the earliest employees, “Every buyer has to be tough. That is the job. I always told the buyers: ‘You are negotiating for your customer. And your customer deserves the best prices that you can get. Don’t ever feel sorry for a vendor. He always knows what he can sell, and we want his bottom price. ‘We would tell the vendors,’ Don’t leave in any room for a kickback because we don’t do it here. And we don’t want your advertising program or delivery program. Our truck will pick it up at your warehouse. Now what is your best price?”

Wal-Mart spent a significant amount of time meeting vendors and understanding their cost structure. By making the process transparent, the retailer could be certain that the manufacturers were doing their best to cut down costs. Once satisfied, Wal-Mart believed in establishing a long-term relationship with the vendor. In its attempt to drive hard bargains, Wal-Mart did not even spare big manufacturers like Procter & Gamble (P&G). However, the company, generally, preferred local and regional vendors and suppliers.

In 1998, Wal-Mart had over 40 distribution centers located at different geographical locations in the US. Over 80,000 items were stocked in these centers. Wal-Mart’s own warehouses directly supplied 85 percent of the inventory, as compared to 50-65 percent for competitors. According to rough estimates, Wal-Mart was able to provide replenishments within two days (on an average) against at least five days for competitors. Shipping costs for Wal-Mart worked out to be roughly 3 percent as against 5 percent for competitors.

Each distribution center was divided into different sections on the basis of the quantity of goods received and was managed the same way for both cases and palletized goods. The inventory turnover rate was very high, about once every two weeks for most of the items. Goods meant for distribution within the US usually arrived in pallets, while imported goods arrived in re-usable boxes or cases. In some cases, suppliers delivered goods such as automotive and drug products directly to the stores. About 85% of the goods which were available at the stores passed through the distribution centers.

The distribution centers ensured a steady and consistent flow of products to support the supply function. As Wal-Mart used sophisticated barcode technology and hand-held computer systems, managing the center became easier and more economical. Every employee had an access to real-time information regarding the inventory levels of all the products in the center. They had to just make two scans - one to identify the pallet, and the other to identify the location from where the stock had to be picked up. Different barcodes were used to label different products, shelves and bins in a center. The hand-held computer guided an employee with regard to the location of a particular product from a particular bin or shelf in the center. When the computer verified the bin and picked up a product, the employee confirmed whether it was the right product or not. The quantity of the product required from the center was entered into the hand-held computer by the employee and then the computer updated the information on the main server.

The hand-held computer also enabled the packaging department to get accurate information about the products to be packed. It displayed all information about the storage, packaging and shipping of a particular product thus, saving time on unnecessary paperwork. It also enabled the center supervisors to monitor their employees closely enabling them to give directions and even guide them even on the

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move. This enabled the company to satisfy customer needs quickly and improve the level of efficiency of the distribution center management operations.

Each distribution center had facilities for maintaining personal hygiene such as shower bath and fitness centers. It also had provision for food, sleep and personal business. The distribution center could also be used for meetings and paperwork. The truck drivers of Wal-Mart sometimes availed these facilities.

LOGISTICS MANAGEMENT

An important feature of Wal-Mart’s logistics infrastructure was its fast and responsive transportation system. The distribution centers were serviced by more than 3,500 company owned trucks. These dedicated truck fleets allowed the company to ship goods from the distribution centers to the stores within two days and replenish the store shelves twice a week. The truck fleet was the visible link between the stores and distribution centers. Wal-Mart believed that it needed drivers who were committed and dedicated to customer service. The company hired only experienced drivers who had driven more than 300,000 accident-free miles, with no major traffic violation.

Wal-Mart truck drivers generally moved the merchandise-loaded trailers from Wal-Mart distribution centers to the retail stores serviced by each distribution center. These retail stores were considered as customers by the distribution centers. The drivers had to report their hours of service to a coordinator daily. The coordinator scheduled all dispatches depending on the available driving time and the estimated time for travel between the distribution centers and the retail stores. The coordinator informed the driver of his dispatches, either on the driver’s arrival at the distribution center or on his return to the distribution center from the retail store. The driver was usually expected to take a loaded truck trailer from the distribution center to the retail store and return back with an empty trailer. He had to dispatch a loaded truck trailer at the retail store and spend the night there. A driver had to bring the trailer at the dock of a store only at its scheduled unloading time, no matter when he arrived at the store. The drivers delivered the trailers in the afternoon and evening hours and they would be unloaded at the store at nights. There was a gap of two hours between unloading of each trailer. For instance, if a store received three trailers, the first one would be unloaded at midnight (12 AM), the second one would be unloaded at 2 AM and the third one at 4 AM.

Although, the trailers were left unattended, they were secured by the drivers, until the store personnel took charge of them at night. Wal-Mart received more trailers than they had docks, due to their large volume of business.

Wal-Mart maintained a strict vigil over its drivers by keeping a record of their activities through the “Private Fleet Driver Handbook” (Refer Exhibit III). The purpose of the book was to educate the drivers with regard to the code of conduct. It also included the terms and conditions regarding the safe exchange of trailers with the store personnel and the safety of Wal-Mart’s property. This book also contained a list of other activities, the non-compliance of which would result in the termination of the driver.

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To make its distribution process more efficient, Wal-Mart also made use of a logistics technique known as ‘cross-docking.’ In this system, the finished goods were directly picked up from the manufacturing plant of a supplier, sorted out and then directly supplied to the customers. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores.

In cross docking, requisitions received for different goods from a store were converted into purchase or procurement orders. These purchase orders were then forwarded to the manufacturers who conveyed their ability or inability to supply the goods within a particular period of time. In cases where the manufacturer agreed to supply the required goods within the specified time, the goods were directly forwarded to a place called the staging area. The goods were packed here according to the orders received from different stores and then directly sent to the respective customers.

To gain maximum out of cross-docking, Wal-Mart had to make fundamental changes in its approach to managerial control. Traditionally, decisions about merchandising, pricing and promotions had been highly centralized and were generally taken at the corporate level. The cross-docking system, however, changed this practice. The system shifted the focus from “supply chain” to the “demand chain,” which meant that instead of the retailer ‘pushing’ products into the system; customers could ‘pull’ products, when and where they needed. This approach placed a premium on frequent, informal cooperation among stores, distribution centers and suppliers with far less centralized control than earlier.

INVENTORY MANAGEMENT

Wal-Mart had developed an ability to cater to the individual needs of its stores. Stores could choose from a number of delivery plans. For instance, there was an accelerated delivery system by which stores located within a certain distance of a geographical center could receive replenishment within a day.

Wal-Mart invested heavily in IT and communications systems to effectively track sales and merchandise inventories in stores across the country. With the rapid expansion of Wal-Mart stores in the US, it was essential to have a good communication system. Hence, Wal-Mart set up its own satellite communication system in 1983. Explaining the benefits of the system Walton said, “I can walk in the satellite room, where our technicians sit in front of the computer screens talking on the phone to any stores that might be having a problem with the system, and just looking over their shoulders for a minute or two will tell me a lot about how a particular day is going. On the screen, I can see the total of the day’s bank credit sales adding up as they occur. If we have something really important or urgent to communicate to the stores and distribution centers, I, or any other Wal-Mart executive can walk back to our TV studio and get on that satellite transmission and get it right out there. I can also go every Saturday morning around three, look over these printouts and know precisely what kind of work we have had.”

Wal-Mart was able to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, and timely price markdowns. Instead

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of cutting inventory across the board, Wal-Mart made full use of its IT capabilities to make more inventories available in the case of items that customers wanted most, while reducing the overall inventory levels. Wal-Mart also networked its suppliers through computers. The company entered into collaboration with P&G for maintaining the inventory in its stores and built an automated re-ordering system, which linked all computers between P&G and its stores and other distribution centers. The computer system at Wal-Mart stores identified an item which was low in stock and sent a signal to P&G. The system then sent a re-supply order to the nearest P&G factory through a satellite communication system. P&G then delivered the item either to the Wal-Mart distribution center or directly to the concerned stores. This collaboration between Wal-Mart and P&G was a win-win proposition for both because Wal-Mart could monitor its stock levels in the stores constantly and also identify the items that were moving fast. P&G could also lower its costs and pass on some of the savings to Wal-Mart due to better coordination.

Employees at the stores had the ‘Magic Wand,’ a hand-held computer which was linked to in-store terminals through a radio frequency network. These helped them to keep track of the inventory in stores, deliveries and backup merchandise in stock at the distribution centers. The order management and store replenishment of goods were entirely executed with the help of computers through the Point-of-Sales (POS) system. Through this system, it was possible to monitor and track the sales and merchandise stock levels on the store shelves. Wal-Mart also made use of the sophisticated algorithm system which enabled it to forecast the exact quantities of each item to be delivered, based on the inventories in each store. Since the data was accurate, even bulk items could be broken and supplied to the stores. Wal-Mart also used a centralized inventory data system using which the personnel at the stores could find out the level of inventories and the location of each product at any given time. It also showed whether a product was being loaded in the distribution center or was in transit on a truck. Once the goods were unloaded at the store, the store was furnished with full stocks of inventories of a particular item and the inventory data system was immediately updated.

Wal-Mart also made use of bar coding and radio frequency technology to manage its inventories. Using bar codes and fixed optical readers, the goods could be directed to the appropriate dock, from where they were loaded on to the trucks for shipment. Bar coding devices enabled efficient picking, receiving and proper inventory control of the appropriate goods. It also enabled easy order packing and physical counting of the inventories.

In 1991, Wal-Mart had invested approximately $4 billion to build a retail link system. More than 10,000 Wal-Mart retail suppliers used the retail link system to monitor the sales of their goods at stores and replenish inventories. The details of daily transactions, which approximately amounted to more than 10 million per day, were processed through this integrated system and were furnished to every Wal-Mart store by 4 a.m., the next day. In October 2001, Wal-Mart tied-up with Atlas Commerce for upgrading the system through the Internet enabled technologies.

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Organization Structure

Wal-Mart’s organizational structure is organic model because Wal-Mart’s structure is flat, uses cross-hierarchical and cross-functional team, possesses a comprehensive information network (using lateral and upward communication as well as downward), and involves high participation in decision making. Wal-Mart also have high degree of decentralization which mean that action can be taken more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make the decisions that affect their work lives. In Wal-Mart, lower-level managers are close to the reality in everyday activities in the stores and typically have more detailed knowledge about problems than do top managers.

This Wal-Mart’s structure affects its employees because as an individual, they feel that their involvement with their job is important. This called employee engagement where the employees satisfy and enthusiastic for the work they do. The job attitude that the Wal-Mart’s employee feel like deeply involved in their job, they are most likely will like their job and that lead to high job satisfaction.

In organization’s structure, there are seven primary characteristics, which are innovative and risk taking; attention to detail; outcome orientation; people orientation; team orientation; aggressiveness and stability. Wal-Mart as the world’s largest company, they use most of the characteristics into their organization that applied by Sam Walton, the founder.

To improve the sales, Walton began a quick meeting every Saturday morning with his store’s “associates” (Walton called all his worker associates to emphasize that they were his colleagues as well as his employees). The purpose of this meeting is to ask the colleagues on matters such as what items are a good selling product, what items should put on sale and how to display certain products so people will interested to buy more. This characteristic called innovative and risk raking which mean the degree to which employee are encourage being innovative and taking risks.

As the Saturday Morning Meetings continued, the topics that have been discuss were going more into the details such as company’s financial performance, merchandising, and areas of improvement. For instance, Paul Busby, regional vice president for the Northeastern United States, was concerned about a particular item that Kmart sell but Wal-Mart do not. Busby went to Kmart and wondering why his store does not carry that poker table cover and chip set for $9.99. Therefore, as he analyzes the situation, he is showing the characteristic of organizational culture, which is attention to detail.

Wal-Mart’s culture characteristic is not including the outcome orientation which management focuses on results or outcomes rather than the techniques and process used to achieve those outcomes. Wal-Mart is more likely to focus on the techniques and the ways to improve the outcomes. Wal-Mart tried to focus on keeping costs low to gain advantages over competitors such as Kmart. Wal-Mart operates in a different context when Sam Walton was alive and when David Glass, the former CEO, ran the company. The company had more tolerance toward employee mistakes compare to the existing policy that are stricter than before.

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Nowadays, if they find someone break the company’s rules, they are not only will let them go, but they will also have to document it so it is covered and other employees will understand the consequences if they break the rules. This is an example of people orientation, which means the degree to which management decision takes into consideration the effect of outcomes on people within the organization.

All opinions and suggestion from the employees of Wal-Mart are very important for the company’s growth. This team orientation characteristic of Wal-Mart’s culture is being a part of Sam Walton’s ways on employment involvement. There is merchandising meeting that held every Fridays where the regional vice presidents gathered to discuss what products are selling well. Also, every Wal-Mart store has a 15-minute shift change meeting three times a day. From these small meetings, managers send all the good inputs to the Saturday Meeting Morning. For instance, the greeter in Wal-Mart is such a great idea that one employee rank-and-file suggested. Therefore, this decision is made with the help of the employee together with the upper management.

Wal-Mart’s employees do not using aggressiveness in the way to sell product. They rather being easy going than aggressive and competitive because they are not getting any percentage of the sales that they make. However, Wal-Mart is being aggressive with the process and strategy to lead the company toward growth and greater financial success. Sam Walton created frugality to start being an example to all the employees. He strictly focuses on keeping the low cost early to gain an advantage over the competitor. Not many CEO of a big company driving a low profile car such as an old pick-up truck and flew in economy class when they traveled. This is the way of Walton to be aggressive in the strategy to get more profit.

It is hard to maintain the stability of Wal-Mart’s culture. In the late 1980s and early 1990s, the employees who attend the Saturday Morning Meeting grew into a larger number and resulting in boredom. They were so many voice need to be heard and too little time provided. Some Wal-Mart suppliers who also attend the Saturday Morning Meeting brought a singer and former football player to entertain the meeting. Therefore, the meeting began to lose its focus. Since the entertainment does not solve any problems, David Glass, the former CEO, recalls it and replace it with an educational guests such as Bill Clinton, CEOs Jack Welch, and Warren Buffet. These speakers were better because they can share their experiences and success stories to the Wal-Mart’s managers, also giving them new ideas and point of view on how to conduct business and run the organization.

Wal-Mart organization culture is built on three basic values promulgated by Sam Walton. It was established in 1962 and still permits the organization. The values are (1) respect for the individual, (2) service to the customer and (3) striving for excellence. Other factors influencing the organization culture include exceeding the expectations of customers, assisting people so that they can make a difference, quickly approaching customers to help, doing today what can be done today rather than postponing it, and pricing for providing value to the customer. The organization culture has an impact on the staffing function. Associates are created with respect in this lean organization. Having a great of authority motivates people. Training is decentralized with management seminars offered at the distribution centers instead of at the company headquarters. The company atmosphere encourages employees to submit suggestion, many of them being implemented through the “Yes we can sum” Suggestion system. Associates are rewarded bonuses for cost reduction through the “shrink incentive plan”. Supervisors and managers received a salary as well as incentive compensation base on store performance. Associates can also participate in profit

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sharing plan. With Wal-Mart is contributing a certain percentage. Above strategies will work in every corner of the world. As they provide better goods at low cost through highly competent employee and skill management and as they maintain good relationship with its supplier, they can provide vital input which will help it to grow in any sphere of the world. Their management is decentralized, that’s why department managers can take decision of their own. So they can take decision according to the demand of that market in which they are operating. As the scenario varies from country to country, they can easily cope up with the unique situations that may arise in case of operating outside of the United States.

Their strategy “everyday low prices” obviously would be welcomed all over the world, but it might create some questions in the mind among certain communities “are they providing quality goods? In this case they may clarify through providing information about their strategies in case of going for operation in a new country.

Only one thing that can be recommended in this case of them is that they should focus on their employees’ health care benefits. If employees remain satisfied, then they will create value for the organization.

Miscellaneous

Managerial work

Managerial work is a conceptual work. Becoming a manager may mean that the status of a project becomes more important than the technical nuances of that project. It’s going to be a different focus from what you’re used to so you’ll need to prepare yourself for it. One change that the shift to management will bring is that you will now represent your coworkers when interacting with your boss. Your boss may not want to hear every technical detail and may be more focused on whether the project will be completed successfully and on time. You’ll need to start thinking like a manager before you can act like one.

Many techies want to go to the office and work in solitary confinement. However, if you want to mentor others and guide them through their tasks, then you may very well make a good manager. Being a manager and accepting responsibility for those under you by definition places you in a high profile position. I find that developing my employees’ skills and seeing them advance in their careers is the most valuable part of being a manager.

A manager doesn’t necessarily have to be a people person, but it helps. Managers spend most of the day working with others so it’s generally a good idea to have strong interpersonal skills. Managers have to solve people problems and it helps to feel a sense of accomplishment after doing so.

There is a difference between a manager and a leader, but each manager must have some basic leadership skills and the desire to influence coworkers. A good manager is not only responsible for himself, but also for his team. Leadership is something that you’ll have to be comfortable with if you want to be a manager. The ability to make decisions and the capacity to carry them out are essential management skills.

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A good manager has to understand group dynamics and how best to facilitate employees working together. If you see a challenge in interacting with coworkers and their personalities, then management will provide you with those challenges on a daily basis. It takes patience and understanding to be able to guide employees and to build consensus during team meetings. A good manager knows how to bring out the best in his team and that usually requires maintaining a delicate balance between team members’ personalities.

Being a Wal-Mart manager is a chance to stand at the forefront of retailing. It’s a job with big responsibilities, and one which requires true leadership and in-depth knowledge of our stores. Millions of customers come to Wal-Mart Stores each week looking for great values, and our managers are vital in helping them return home satisfied.

Wal-Mart’s three levels of store management—assistant manager, co-manager and store manager—call for individuals with great communication, organizational and financial skills. These qualities help managers motivate their teams and ensure that our stores continually move forward. Above all, we look for individuals with great people skills, because the most important product we offer is customer satisfaction.

History Timeline1960s

The Wal-Mart story began in 1962, when Sam Walton, our founder opened the company’s first discount store in Rogers, Ark. 1968 saw the hiring of Wal-Mart Aviation’s first full-time pilot, who provided help to Sam and Bud Walton, as well as the opening of the first stores outside of Arkansas, in Sikeston, Mo., and Claremore, Okla. The company officially incorporated as Wal-Mart Stores Inc. on October 31, 1969.

1970s

The 1970s marked the beginning of significant growth for the company. The first year of that decade saw the opening of the first Wal-Mart distribution center, as well as the Wal-Mart Home Office, in Bentonville. Ark. At that point, Wal-Mart employed 1,500 associates (employees) working in 38 stores, with sales of $44.2 million. Wal-Mart also began selling shares over the counter as a publicly-held company in 1970.

1971

In May 1971, Wal-Mart stock experienced its first 100 percent split, at a market price of $47. At that time, the company operated in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma. In 1972, after being approved and listed on the New York Stock Exchange, Wal-Mart stock split 100 percent for a second time, with a market price of $47.50. The company then expanded into three more states, entering Tennessee in 1973 and Kentucky and Mississippi in 1974.

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1975

By the middle of the decade, Wal-Mart employed more than 7,500 associates in 125 stores with sales of $340.3 million, and in 1975 entered into the state of Texas. Wal-Mart stock split for the third time in August of that year, with a market price of $24, and the company made its first acquisition, taking control of 16 Mohr-Value stores in Michigan and Illinois. 1975 was also the year that Sam Walton, inspired by workers he encountered during a visit to Korea, conceived of the famous “Wal-Mart Cheer” and introduced it to his associates.

Wal-Mart began operating in Illinois, its 10th state, in 1977. The next year, the company acquired the Hutcheson Shoe Company, and introduced the Wal-Mart pharmacy, auto service center and jewelry divisions. In 1979, Wal-Mart became the first company to reach $1 billion in sales in such a short period of time. The company closed out the decade with 276 stores, 21,000 associates and $1.248 billion in sales, and the addition of its 11th state, Alabama

1980

Growth continued into 1980, with Wal-Mart stock splitting 100 percent for the fourth time with a market price of $50. That year also saw the opening of the largest distribution center to date in Palestine, Texas. In 1981, Wal-Mart entered Georgia and South Carolina, and made its second acquisition with 92 Kuhn’s Big K stores. The company entered Florida and Nebraska in 1982, following June’s fifth 100 percent stock split at a market price of $49.875.

1983

Forbes magazine ranked Wal-Mart No. 1 among general retailers for the eighth year straight in 1983, the year that the first Sam’s Club opened in Midwest City, Okla. The same year, Wal-Mart opened stores in Indiana, Iowa, New Mexico and North Carolina, implemented the characteristic People Greeters in all locations, and opened the first 1-hour photo lab in Tulsa, Okla. Wal-Mart also acquired U.S. Woolco Stores in 1983, and the stock split 100 percent for the sixth time with a market price of $81.625.

1984

1984 saw Sam Walton doing the hula at high noon on Wall Street, making good on a promise to associates after the company achieved a pre-tax profit of 8 percent for the previous fiscal year.

1985

At mid-decade, Wal-Mart employed 104,000 associates in 882 stores with sales of $8.4 billion. Stock split 100 percent in September, with a market price of $49.75. That year, the company entered Wisconsin and Colorado and also acquired Grand Central Shoes. The next year, 1986, Wal-Mart entered Minnesota.

1987

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Wal-Mart marked its 25th anniversary in 1987, with 1,198 stores, sales of $15.9 billion and 200,000 associates. The stock split 100 percent again in June, with a market price of $66.625. The company also completed the Wal-Mart Satellite Network, the largest private satellite communication system in the United States, linking all operating units of the company and the Home Office with two-way voice, data, and one-way video communication.

1988

By 1988, 99 percent of Wal-Mart stores had bar-code scanning capabilities, the first Supercenter opened in Washington, Mo., and the company acquired Supersaver units. David Glass was named chief executive officer of Wal-Mart. Wal-Mart closed out the 1980s with the addition of operations in Michigan, West Virginia, and Wyoming, for a total of 29 states.

1990s

1990

Wal-Mart became the nation’s No. 1 retailer in 1990, entering into California, Nevada, North Dakota, Pennsylvania, South Dakota, and Utah and acquiring the McLane Company of Temple, Texas. The company also opened the Wal-Mart Visitor Center on Bentonville’s town square, on the site of Sam Walton’s original Walton’s 5-10 store. Wal-Mart stock split 100 percent for the ninth time in 1990 as well, at a market price of $62.50.

1991

Branching out further in 1991, Wal-Mart stepped into the international market with the opening of a retail unit in Mexico City. On the domestic front, the company entered into several states in the Northeast and South Atlantic regions, including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey and New York, and acquired Western Merchandisers, Inc. of Amarillo, Texas. Wal-Mart also introduced the “Sam’s American Choice” brand products in 1991.

1992

On April 5, 1992, Sam Walton passed away at the age of 74. Just weeks before, President George H.W. Bush presented him with the Medal of Freedom, the nation’s highest civilian honor, during a ceremony at Wal-Mart headquarters. Following Sam’s passing, his son S. Robson Walton was named chairman of the board. With the additions of Idaho, Montana and Oregon, Wal-Mart operated in 45 states in the United States in 1992, and expanded into Puerto Rico.

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1993

Wal-Mart’s international business formed its own division the following year, with Bobby Martin serving as president. 1993 also saw the tenth 100 percent stock split at a market value of $63.625; the first billion-dollar sales week in December; the acquisition of 91 Pace Warehouse Clubs; and Wal-Mart’s entry into Alaska, Hawaii, Rhode Island and Washington, bringing the company’s total to 49 states. The 50th would be added two years later.

1994

In 1994, a prototype Wal-Mart store, designed to be as environmentally friendly as possible, opened in Lawrence, Kan. The company acquired 122 Woolco stores in Canada, and opened three value clubs in Hong Kong. As of that year, Wal-Mart International operated 123 stores in Canada and 86 in Mexico. Also in 1994, the Code Adam missing child program was implemented in all stores, being named for Adam Walsh.

1995

1995 saw the passing of Sam Walton’s brother, James Lawrence “Bud” Walton, Wal-Mart’s co-founder. The company entered its 50th state, Vermont, and built three units in Argentina and five in Brazil. As of that year, Wal-Mart Stores Inc. operated 1,995 stores, 239 Supercenters, 433 Sam’s Clubs and 276 international stores with sales of $93.6 billion and 675,000 associates.

1996

In 1996, Wal-Mart entered China through a joint-venture agreement. Also in 1996, the Missing Children's Network was implemented in all stores to feature missing children by displaying their information on bulletin boards.

1997

By the following year, Wal-Mart became the largest private employer in the United States with 680,000 associates, plus an additional 115,000 international associates. 1997 was also Wal-Mart’s first $100 billion sales year, with sales totaling $105 billion, and the company served 90 million customers per week worldwide. Wal-Mart also replaced Woolworth on the Dow Jones Industrial Average, and the company introduced OneSource nutrition centers.

1998

Wal-Mart entered into two more countries in 1998, with the acquisition of 21 Wertkauf units in Germany and a joint-venture agreement to operate in Korea. The company exceeded $100 million in annual charitable contributions that year, with donations totaling $102 million. Wal-Mart also introduced the Neighborhood Market concept with three stores in Arkansas.

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Late 1990s

In the last year of the 1990s, Wal-Mart became the largest private employer in the world, with 1,140,000 total associates. The stock split 100 percent for the 11th time, with a market price of $89.75. The 1999 Cone/Roper Report, an annual national survey on philanthropy and corporate citizenship, ranked Wal-Mart the No. 1 Corporate Citizen in America. The company acquired 71 Interspar units in Germany and acquired the ASDA Group plc in the United Kingdom.

2000s

2000

Wal-Mart entered the new millennium with the appointment of H. Lee Scott Jr. as the third CEO of Wal-Mart Stores Inc. in 2000. That year, Fortune magazine ranked the company fifth in its "Global Most Admired All-Stars" list and named Wal-Mart the third most admired company in America. The 2000 Cone/Roper Report once again ranked Wal-Mart as the No. 1 Corporate Citizen in America.

2002

Hispanic Business magazine ranked Wal-Mart one of the "Top 25 Diversity Recruitment Programs" in 2001 for its aggressive program to hire and promote Latinos. In 2002, Wal-Mart received the 2002 Ron Brown Award, the highest Presidential Award recognizing outstanding achievement in employee relations and community initiatives.

2003-2004

Fortune magazine also placed Wal-Mart in the top spot on its “Most Admired Companies” list two years in a row, in 2003 and 2004. In 2004, Wal-Mart was also presented the "Corporate Patriotism Award," which is presented to a company that exhibits exceptional dedication to supporting of U.S. service members and their families.

2005

Wal-Mart marked a significant turning point in 2005 with a new commitment to bring environmental sustainability into its business, under the leadership of CEO Lee Scott. The sustainability commitment developed after Wal-Mart led the corporate drive to assist in U.S. hurricane relief efforts with $18 million in cash donations. That same year, in McKinney, Texas, and Aurora, Colo., Wal-Mart created experimental stores that save energy, conserve natural resources, and reduce pollution. The company also launched the Acres for America program, which conserves critical wildlife habitats for future generations.As of 2005, Wal-Mart employed more than 1.6 million associates in more than 6,200 facilities around the world – including 3,800 U.S. stores and 3,800 international units – with $312.4 billion in sales for the year. The company served more than 138 million weekly customers in the United States, Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. View the current unit count for each country.

2006

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By 2006, the number of weekly customers grew to more than 176 million around the world, with 6,779 locations. Wal-Mart had record net sales of $345 billion. The company increased its ownership stake in Seiyu in Japan, to 53.3 percent, and increased its ownership of CARHCO to 51 percent, renaming the company Wal-Mart Central America.

Through the Wal-Mart Foundation, charitable partners and donations from customers and associates, Wal-Mart contributed more than $415 million in cash and in-kind merchandise to 100,000 organizations worldwide. Wal-Mart also launched a new $4 generic prescription drug program to help customers in its U.S. pharmacies save money on health care

2007

In February 2007 Wal-Mart helped launch Better Health Care Together, a unique partnership of organizations dedicated to a set of four common sense principles for achieving a new American health care system by 2012. Later in the year, Wal-Mart expanded its successful $4 generic program, which as of 2007 had saved customers more than $396 million on prescription drug costs.

Wal-Mart International reached significant milestones as well. In August, Wal-Mart and Bharti Enterprises announced an agreement to establish Bharti Wal-Mart Private Limited, a joint venture for wholesale cash-and-carry and back-end supply chain management operations in India.

The 3,000th international store, a Supercenter in Sao Paulo, Brazil, opened in November 2007. In December, Wal-Mart successfully completed a tender offer to acquire all issued and outstanding shares of Seiyu in Japan, which raised Wal-Mart’s ownership to 95.1 percent.

2008

On April 10, 2008, Sam's Club celebrated its 25th anniversary. In 2008, Sam's Club operated more than 590 locations nationwide and more than 100 locations internationally.

2009

Mike Duke succeeded Lee Scott as president and chief executive officer, effective February 1, 2009. Duke was also elected to the company’s board of directors. Scott continues serving as chairman of the executive committee of the board. The board also approved the promotion of Eduardo Castro-Wright to vice chairman of Wal-Mart.

Doug McMillon is promoted to president and chief executive officer of Wal-Mart International, the company’s second largest operating segment.

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Conclusion

Wal-Mart has been extremely successful in the past, and has a very promising futureahead of them. Unfortunately, there is always a negative side to success. For Wal-Mart, they are faced with opposition from people who are concerned with the “little guy.” The fact that Wal- Mart has the ability and resources to be such a major competitor in the retail industry scares some people. Small stores in small communities, as well as employees, target Wal-Mart because they know it is a large company with the resources to defend itself. In order to improve its image in the eyes of these people, Wal-Mart may want to address these issues head on. Wal-Mart has already taken giant strid to be seen as a more environmentally friendly organization, as well as to increase the benefits of its employees. They should continue this approach, possibly even more publicly than other retailers in the industry. Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global impact, any issue they raise will undeniably get a great deal of attention. In a campaign of this sort, Wal-Mart could focus on promoting the other small specialty stores in their community. They could help advertise for local shops that do not sell competing products, but complimentary ones. Instead of taking sales away from themselves, Wal-Mart could change their image to one of a company that cares about the community.

Along with this, Wal-Mart should focus on their employees. Publicly giving employeebenefits or rewards will increase morale as well as their image. Once Wal-Mart has invested in their image in their home country, they should also focus on increasing their market share in the international markets that they are not already involved in.

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Exhibits

Exhibit 1

Source: http://money.cnn.com

The world’s biggest retailer enjoyed robust profits overseas, but continued struggling at home with weak sales and public relations debacles. For fiscal year 2011, Wal-Mart saw operating income rise by 6.4% to more than $25 billion. But while the Bentonville, AR-based chain saw gains abroad, executives found it harder to lure U.S. shoppers.

The chain saw foot traffic decline, and Wal-Mart tried to bring back shoppers pinched by high unemployment and gas prices. The company also began opening 40 smaller “Wal-Mart Express” stores in rural and urban areas.

Beyond sales, the chain also struggled with a shaky public image. In June 2011, the U.S. Supreme Court threw out a discrimination lawsuit accusing the retailer of favoring men over women in promotions and pay. While executives may have breathed a sigh of relief, Wal-Mart suffered another blow when U.S. lawmakers launched an investigation in April 2012 following allegations of bribery at the chain’s Mexican affiliate. – Nin-Hai Tseng, writer

Source: http://money.cnn.com

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Exhibit 2

Source: http://money.cnn.com

Exhibit 3 : Wal-Mart Stores, Inc. Data Sheet - Worldwide Unit Details January 2012

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AssociatesUnited States -- approx. 1.4 millionInternational -- approx. 780,000Total associates -- 2.2 million worldwide

Company Overview Wal-Mart Stores, Inc. (NYSE: WMT) serves customers and members more than 200 million times per week at 10,000 retail units under 69 different banners in 27 countries. *Supermarkets includes Neighborhood Market, Amigo and Supermercado banners**Small formats include Walmart Express, Walmart on Campus and Super Ahorros banners***China includes a 35% interest in Trust-Mart, which operates 29 stores in China.****Africa includes South Africa (305), Botswana (11), Ghana (1), Lesotho (2), Malawi (2), Mozambique (17), Namibia (3), Nigeria (2), Swaziland (1), Tanzania (1), Uganda (1) and Zambia (1)

Source: http://www.walmartstores.com/pressroom/news/

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Additional Reading and References

www.wikipedia.com

http://www.oppapers.com

http://www.Wal-Martstores.com/pressroom/FactSheets/

http://www.walmartstores.com

Walmart International statement regarding foreign direct investment in India 2012 (http://www.walmartstores.com/pressroom/news/10767.aspx)

Wal-Mart seeks US govt help on India plans - July 29, 2012 (http://businesstoday.intoday.in/story/walmart-others-seek-us-govt-help-on-india-plans/1/186738.html)

Walmart: Key Insights and Practical Lessons from the World's Largest Retailer 2012- By Bryan Roberts, Natalie Berg

Protest votes against Wal-Mart executives – 4 June 2012 (http://www.bbc.co.uk/news/business-18324562)

Human Rights Watch Discounting Rights Wal-mart's Violation of Us Workers' Right to Freedom of Association - By Human Rights Watch

http://topics.nytimes.com/top/news/business/companies/wal_mart_stores_inc/index.html

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