History and Development of Walmart Stores - Admission/Application Essay Example

Case Analysis: Wal-Mart Stores Icn Company Background History and Development of Wal-Mart This is a multinationalretail corporation that operates a large number of departmental stores and warehouse stores. It mainly specializes in retail business. The headquarters of this corporation is located in Bentonville, Arkansas. Sam Walton was the founder of this big corporation in the year 1962. Later, it was incorporated in 1969. Generally, it operates in 27 countries globally in different cities (Hayes 1-4). These countries include; Mexico, Japan, India and United Kingdom. It has won the largest market share in these countries in retail business. Developments The first store was purchased from Ben Franklin Stores, which was earlier owned by Butler Brothers (Hayes 1-4). The primary aim of Sam Walton was to sell goods at low prices to attract more customers into the store. This would enable him to achieve high sales volume. Sales went on increasing year per as the store became famous. With increased sales and profit margins, he was able to open more branches in the country and later globally. It was later incorporated in the year 1969, where the head office was opened at Bentonville. With the increasing number of stores and employees, the corporation started trading it share in the New York Stock Exchange. By 1990, it was the most profitable retail business; hence, it attained a multinational status. Further, the corporation has embarked on various initiatives a way of giving back to the community and countries in where it operates. The focus is on various environmental measures that aim at improving energy efficiency (Walton and Huey 1-18). Company’s Mission The corporation’s mission is to save peoples’ money so that they can be able to live better lives. This is achieved by ensuring that goods are offered for sale at lower prices and attractive customer and after sales services. Company’s Goals The primary goal of the corporation is to ensure environmental sustainability. Hence, it has embarked on various initiatives to achieve this. Further, it also aims at satisfying the needs of their customers globally by giving them quality services as per their needs and culture (Hill and Jones, 18) . Company’s Values Firstly, the corporation aims at achieving the highest level of integrity from its clients and stakeholders. This is achieved by enhancing transparency in all its business deals. Secondly, it ensures that their customers are served in the best way possible. All their staff are trained how to handle their customers professionally in all their stores. The retail stores also offer after sale services to their customers. It has also started a program of giving regular customers smart cards for reward points. These points can be redeemed for an item or service. Further, it is the role of the corporation’s management to ensure that all members and staff respect each other. Finally, it strives to achieve high levels of excellence in all its operations globally. This is made it possible by the dedicated team of employees who work hard to ensure that the needs of the customers are well-taken care of (Frank 3). 2. Porter’s 5 forces a) Competition The corporation has established itself well in the market by ensuring that it has cost the advantage on all its major competitors in the market. Further, it has branches globally in strategic locations. This is a significant boost to its operations. In addition, it has a strong and established brand name and adequate financial capacity to run all its operations. b) Rivalry There is medium pressure that exists among the main competitors of the corporation. These are Sears, Target among others. For instance, Target has achieved a tremendous growth in the recent years; hence establishing itself in the market (Hill and Jones 158). c) Bargaining Power Customers have little or no bargaining power when it comes to making sales. This is because the prices of the goods are always fixed. Various groups that fights for the rights of consumers have tried to complain but no amendments have been made. Additionally, the store deals with prominent suppliers like coca cola, hence minimal pressure. 3. Opportunities and threats presented by the industry and macro environment Opportunities The retail market of goods and services is achieving high levels of growth in the global market. Hence, the corporation has established itself in world’s largest economies to take advantage of this. Secondly, most consumers in the market have accepted own label products as it was not the case in the past years. Further, most customers have adopted healthy eating habits. This is an excellent opportunity for the store as it is a significant boost to its groceries sales globally. Finally, online shopping from the stores has increased the entire sales by the corporation. This is a positive effect brought by technology in the world. Threats The corporation is experiencing a high level of competition from its main competitors such as Target and Brick and Mortar. Online competitors have also established themselves. Secondly, there is resistance from local communities in countries like India as there are used to purchasing their goods from local retailers. This leads to small sales in such regions, which is a loss to the company. Finally, the prices of goods have increased in the past years. This is because of the global recession that has affected most world economies. The high rate of inflation has reduced the purchasing power of most customers in the global market. 4. Factors that have contributed to Wal-Mart competitiveness Strengths Massive scale of operations The corporation has the highest number of retail outlets globally and revenue collection annually. Due to this factor, it has a string buying power from various suppliers; hence, it obtains most of its supplies at a lower cost as compared to other retail outlets. It also enjoys the benefits of high economies of scale due to its extensive operations. A wide variety of products The store offers products ranging from grocery, entertainment goods, health and home based products. It also offers branded and own products in sale. This attracts huge number of customers from all lifestyles into their stores. Most customers value their time; hence, they prefer shopping for commodities all under one roof. This is what the store offers, this the high amount of sale and revenue I every financial year. Cost leadership strategy The store offers its products at low prices to their customers. This is the secret behind the success of the store. Mostly, it acquires these products from suppliers at a much lower cost. This is the reason why the store is in a position to offer its products at a lower cost in the market as compared to its competitors. However, the store does not offer after sales services in order to reduce the cost of operation. Appropriate information system The corporation has an extensive information system that enables it to keep track of all sales and orders as keeping all inventories in order globally. This information is helpful when submitting tax returns and dividends to shareholders of the corporation. This has ensured efficient logistics within the corporation globally. International operations The store is also established globally in a number of countries. This gives it added advantage over its competitors who are only established in the US. This increases the sales volume of the cooperation due to its diversity (Bustillo and Talley 2-8). Weaknesses Labor lawsuits A number of employees have sued the corporation due to poor working conditions, low income and no payment for overtime hours. Further, there have been complaints about female discrimination at work. This has kept away most skilled workers and damaged its corporate reputation. High level of employees’ turnover This has increased the cost of operation, as new employees have to be trained now and then. However, this is because of low income and limited skills to handle the expected tasks. Negative publicity Evil practices such as giving bribes to the authorities have significantly ruined the reputation of the corporation. This is mostly a cover up for its poor working conditions and female discrimination cases (Clifford and Barstow 6). Corporate-level strategy Cost leadership Since its entry into the retail market, one of the strategies that have led to its success is low prices on all its goods. The corporation has operated for many years hence most customers have remained loyal to its products and services. Further, due to its high level of operation globally, it has been able to enjoy the benefit of economies of scale from different suppliers. The store takes advantage and manipulates them by threatening to switch to other supplies. Hence, it gets goods at a lower price as compared to its major competitors. Due to is large-scale operations, it is able to make higher sales, hence more revenue globally. Further, the company does not offer after sale services to its clients. This is meant to reduce the cost of operation. The cooperation assumes that if it offers its goods at a lower price, more customers will be attracted, thus increasing its entire sales. 5. Recommendations a) Business policies The entity should put in place policies that will promote well being of all its employees. For years, it has been criticized due to several malpractices that have been evident within the corporation. To start with, the entity should provide appropriate working condition to all its employees. This means better pay and even payment for overtime hours. If the organization offers better and improved pay to its employees, there will be a small level of employees’ turnover. This will help the corporation to reduce the cost of training new employees now and then. Secondly, it should uphold values of respect and integrity. This will help to eliminate cases of female discrimination at work. The corporation should put in place policies that will ensure protection of all its workers globally. Further, in my opinion, the company should offer after sales services to its customers. This could be the reason why most of its competitors are taking an equal share of the market share despite offering its goods at a lower price. Customers are, usually, attracted by such offers and promotions; hence, the corporation should at enhancing any of these practices. Business strategies The global market is actually changing when it comes to issues of product differentiation. The company has done less to achieve this as compared to its competitors. This might hurt the company in the new future if it remains ignorant. Its competitors have taken advantage of this weakness, and they continue to lure more customers into their retail stores. Works Cited Bustillo, Miguel and Talley, Karen. "For Wal-Mart, a Rare Online Success." The Wall Street Journal (2011): 2-8. Hill, Charles and Jones, Gareth. Essentials of Strategic Management. Mason, USA: South-Western, 2008: 8 Print Hill, Charles and Jones, Gareth. Essentials of Strategic Management. Mason, USA: South-Western, 2008: 158 Print Clifford, Stephanie and Barstow, David. "Wal-Mart Inquiry Reflects Alarm on Corruption." New York Times (2012): 6. Frank, T.A. "A Brief History of Wal-Mart." Washington Monthly (2006): 3. Hayes, Thomas. "Company News: Wal-Mart Net Jumps By 31.8%." The New York Times (1990): 1-4. Walton, Sam and Huey, John. Sam Walton: Made in America: My Story. New York: Bantam, 1993. Print Read More