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Analysis of Wal-Mart Company - Case Study Example

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"Analysis of Wal-Mart Company" paper reviews the history of the company, company’s products and services along with vision statement and purpose. The first Wal-Mart store was opened in 1962 in a market that already had several large discount chains such as King’s, Korvette’s, Woolco, Zayre etc.  …
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Analysis of Wal-Mart Company
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Download file to see previous pages Sam Walton’s key growth strategy for Wal-Mart was to open stores in isolated rural areas and small towns typically with populations of 5,000 to 25,000 that all the other major discount chains were ignoring and provide them with goods and services at competitive prices. This way Wal-Mart was able to tap into the market segment that previously had to drive up to four hours away to the cities to do their shopping. However, this preference for rural areas meant that Wal-Mart had to endure a more costly distribution channel than its competitors. To mitigate this weakness, Sam Walton took the company public in 1972 to raise the capital required for Wal-Mart to build its own warehouses to serve its “boondocks” stores (Bradley & Ghemawat, 2002) and thus lower its cost of goods sold.

In the 80s Wal-Mart finally came of age. It opened its now phenomenal Sam’s Club members-warehouse store in 1983, its first Supercenter in 1988, and by the end of that decade, it had revenues in excess of US $26 billion from 1,402 Wal-Mart stores and 123 Sam’s Clubs (“ History,” 2011).

Presently, Wal-Mart operates in three business segments: Wal-Mart and Sam’s Club in the United States, and Wal-Mart International in 14 countries and Puerto Rico. Its retail stores are organized under 53 different banners across the world. It has a workforce of 2.1 million associates worldwide who serve customers and members more than 200 million times per week. In the fiscal year 2010, the company achieved sales of US $405 billion (“ About Us,” 2011).

Wal-Mart U.S. is a one-stop-shop. It has divided its business into six strategic merchandise units across its various store formats namely: grocery, entertainment, hardlines, apparel, health and wellness, and home merchandise. Within these merchandise units, there is an array of products and services to be found. In addition to that, Wal-Mart U.S. segment also offers financial services and products, markets lines of merchandise under its private-label store brands – such as Parent’s Choice, Great Value, No Boundaries, etc. – and also markets lines of merchandise under licensed brands such as Disney, Black & Decker, Just My Size, etc. (“Wal Mart Stores Inc (WMT.N) Company Profile |,” 2011). Sam’s Club also offers its members a collection of products and services online at
Company’s vision statement and purpose
Wal-Mart has continued to embody within its corporate culture the vision of its founder, Sam Walton, who came up with the organization’s purpose:

“If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.”(Farfan, n.d.).

This belief has been ingrained into the organization through unique sets of best practices that are carried out daily within Wal-Mart. For example, managers are encouraged to be open and accessible to all employees through the open door policy, questions from anyone – supplier, customer or employee – need to be answered on the same day (the sundown rule), and associates must make eye contact, greet and offer help to customers who come within a ten feet radius (the 10-foot rule).

The open-door policy makes Wal-Mart’s associates feel appreciated and thus increases their commitment to better customer service. The sundown rule ensures that there is a quick turnaround of solutions to solve any issue that arises, which goes a long way in increasing the effectiveness of processes and heightened customer satisfaction. The 10-foot rule makes the shopping experience at Wal-Mart memorable to their customers and as such enhances customer retention which is many times cheaper than acquiring new customers.  ...Download file to see next pagesRead More
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