Wal-Mart Company Strategy

2302 Words5 Pages
bulb-icon

Recommended: Strategic analysis of walmart

This essay will examine Wal-Mart's company strategy in several sections. Three elements of successful strategy formulation and a fourth element, which exemplifies the implementation process of company strategy, will be looked at. Followed by this, an analysis of key factors contributing to this strategy will be detailed. These include looking at Wal-Mart's competitive strategy, the CEO's leadership, and company strategy strengths and weakness assessment.

The material used to analyze Wal-Mart strategy consists of the company's annual reports, its Fact Sheets and other information found on the company Internet site. Other information is obtained from outside sources such as Fortune Magazine, and from outside groups who are critical of the corporation. The focus of this analysis will be placed on identifying the resources of the firm, its weaknesses and strengths in terms of its competitive environment. The sections examined will highlight the leadership style of Wal-Mart CEO H. Lee Scott, who inherited the corporate legacy of Wal-Mart founder Sam Walton. Other elements such as the culture, the corporate organization and values of the company come to play.

1. Strategic Goals

This section looks at three successful elements of strategy formulation and a fourth element, where the strategy is implemented successfully. These are as follows:

• Dominate the Retail Market wherever Wal-Mart has a presence.

• Growth by expansion in the US and Internationally.

• Create widespread name recognition and customer satisfaction with the Wal-Mart brand, and associate the retailer with the reputation of offering the best prices.

• Branching out into new sectors of retailing such as pharmacies, automotive repair, and grocery sales.

a. Dominate the Retail Market Everywhere

A key strategy of Wal-Mart is to dominate the retail market. Company founder Sam Walton put in place a retail philosophy the company still follows. Wal-Mart is primarily a discount retailer because they sell their products at the lowest possible prices. By selling at the "lowest price." Walton outlines that the essence of successful discount retailing to cut the price on an item as much as possible, lowering the markup, and earn profit on the increased volume of sales. (Wal-Mart pricing philosophy document, www.walmart.com).

Another subset of this strategy is the competitiveness of every unit. Each store is encouraged to ferociously compete against all other stores in its customer base until the Wal-Mart store gains dominance over its local competitors (Quinn, 2, 115). Wal-Mart is currently ranked as the world's number one retailer and the number one company in the world in terms of sales (over $200 billion) on the Fortune 500 list (www.

Show More
Related

  • Swot Analysis Target: SWOT Analysis Of Target

    801 Words  | 2 Pages

    According to Smithson, Walmart can expand its markets to new and emerging markets especially in the third world countries, which can significantly increase its revenues. Secondly, the company can reform is employment practices and improve the quality standard and in doing so, attract more customers and improve its brand image. On the other hand, the company faces threats such as the rising healthy lifestyle trend I that the company in most cases does not provide customers with healthy goods. At the same time, the company can capitalize on this aspect and increase its revenues. Aggressive competition from other discount retailers such as Target creates a great threat to the company (Smithson, 2015).

    Read More

  • The Success of Wal-Mart: Sam Walton's Dream

    840 Words  | 2 Pages

    There is a lot that goes into being a successful company, and making the Fortune 500 list is most every business owner’s dream. Sam Walton is credited with being the founder and first Chief Executive Officer (CEO) of Wal-Mart. Walton and other CEO’s of the company were able to shape the success of Wal-Mart by implementing strategies that would revolutionize the way retail stores do business, all while pushing Wal-Mart to the top spot on the Fortune 500 list. This paper looks at a few different strategies Walton implemented that ultimately benefitted the company to increase revenue. How did Wal-Mart become the retail giant that it is today? T.A. Frank of Washington Monthly gives a brief history of Wal-Mart in his article Everyday Low Vices.

    Read More

  • Impact of Wal-Mart on the US Economy

    834 Words  | 2 Pages

    Wal-Mart has had a significant economic impact on the US, as well as the economies of countries that have relations with the US. Wal-Mart is the world’s biggest company of any kind, with 80 percent of the households in America purchasing something from the superstore; it is the nation’s largest retailer. Wal-Mart’s continuing price reduction has given Americans the advantage of being able to afford 15 to 20 percent more than they previously could. (Hansen) In a world governed by globalization and greed, competition has become rigid; as a result firms like Wal-Mart have utilized advanced marketing strategies to insure that they are on the ‘neck’ of competition, and are the core deciders of the market. (Ortega) However, Wal-Mart made decisions that were of a disadvantage to aspects of the economy, including the depletion on a small scale of Small Town USA.

    Read More

  • Social Conflict Theory

    597 Words  | 2 Pages

    By keeping their prices low, Walmart can easily pass that savings on to their customers and in return, their buyers are able to have a higher income and can spend their money on more products, preferably Walmart’s.

    Read More

  • Compare And Contrast Costco Vs Costco

    5395 Words  | 11 Pages

    My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer Our decision is to invest in Wal-Mart. The choice for Wal-Mart is on the basis that their functional-level strategy is really robust, nevertheless of the fact that they do not treat their employees well. The fact remains that they are financially stronger, have a better business-level strategy, and have a corporate-level strategy than Costco. Costco v. Wal-Mart: What must we learn about them?

    Read More

  • Kmart and Sears Marketing

    850 Words  | 2 Pages

    Wal-Mart follows a lower cost competitive strategy and cost leadership. For Wal-Mart, strategic thinking is the process of continuously redefining its objectives. Competitive advantage over its competitors both actual and potential and management of risk to levels regarded as acceptable by the corporation’s main stakeholders.

    Read More

  • Wal-Mart's Competitive Environment

    1679 Words  | 4 Pages

    Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.

    Read More

  • The Marketing Environment: Wal-Mart Corporation

    1488 Words  | 3 Pages

    Wal-Mart is one of the world's greatest assets to most people. It provides consumer's a place they can go to virtually get anything they need from, car repairs, to groceries, prescription's, even the latest toys and electronics. With all that said, this paper relates to the different forces in business that affects business: competitive, economic, political + legal + regulatory, technological, cultural + social, demographic, and natural forces. Although there are technically seven we are going to focus on competitive, political, technological, and natural forces.

    Read More

  • Strategic Management of Wal-Mart

    1002 Words  | 3 Pages

    Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few. The Wal-Mart stores also offer similar products in addition to the following: health and beauty products, apparel for women, men and children, household appliances etc (www.yahoo.finance.com). The Vision Statement, Mission Statement, Values and Code of Conduct, Corporate Governance: Directors, Executive Management, Committees and Stakeholder will be the key elements that will discussed in this report as it relates to Wal-Mart. In addition to that, the major trends in the general/macro environment and industry will be analyzed.

    Read More

  • Wal-Mart Dominating Global Retail

    1496 Words  | 3 Pages

    ... and each division to have a different manger to work both for his store and for the company. They can increase there overseas branches by having a different strategic plans. They can even divide the products into different categories such as very high or low end products. Need to use new technologies with different approaches so that can ready to use new technologies with in a short span of time. The main generic strategy is to have over all cost leadership by which the Wal-Mart can control the cost. The supply and distribution system has to be more effective in present one so that they can save both time and money while doing distribution of there products from ware house to the stores.

    Read More

  • Wal Mart's Motivated Employees

    726 Words  | 2 Pages

    When Sam Walton died in 1992, some industry insiders doubted that the Wal – Mart chain that he had founded some 30 years earlier would retain its prominence as a discount retailer. Lost for good they feared, would be the “magic spark” that Walton used to light fires under the chain’s 1.3 million associates. And, as Wal – Mart stock failed to enjoy the same bull – market growth as many other companies in the mid – 1990s, the pundits appeared to be correct. Today, however, with stores in all 50 U.S. states and nine other countries, Wal – mart has rebounded, leading the pack of discount stores with record earnings. In fact, with $218 billion in annual sales and 100 million customers per week, Wal – Mart is the world’s largest retailer and was named “Retailer of the Century” by Discount Store News.

    Read More

  • Global Human Resource Management

    943 Words  | 2 Pages

    The first Wal-Mart store opened in July of 1962 in Rogers, Arkansas by Sam Walton who believed that the future of retailing was in discounting and to avoid competing with established giants like Sears and Woolworth, Wal-Mart’s stated out of the large cities in the beginning and this strategy help avoid competition, while in rural areas Wal-Mart began growing their customer base by offering ways to save money and shorter travel distance, Sam Walton felt the best way to make customers happy was to provide the low prices every day (Farhoomand, 2006). The company needed to continually find ways to control the operating costs so the savings would then be passed on to Wal-Mart customers in the form of lower prices than the competitors. Walton was opposed to having any kind of employee unions for its company and saw them as a disruption and an inconvenience (Farhoomand, 2006). The continued search for lower prices made him aware of business related travel cost, Wal-Mart executives stayed in low cost hotels when they traveled and the cost related to the services provided by suppliers, Wal-Mart helped suppliers improve operations and efficiency to produce lower cost. Walton wanted the suppliers to correct any nonessential or insufficiencies existing in their business structures as a way of gaining lower prices and higher value products for its Wal-Mart stores. To further push savings Wal-Mart forced cost down by eliminating the middleman and buying directly from the manufacturers. This cost saving also applied to executive salaries Walton felt providing employees with stock options, training opportunities, and allow employees to grow and develop would be a better way to engage and involve them in his vision (Farhoomand, 2006).

    Read More

  • Benefits Of Walmart

    715 Words  | 2 Pages

    At the first, Wal-Mart only operates its business in home country. However, Wal-Mart became more integrated and independent by expanding internationally. In 1991, Wal-Mart start expands the business at international level which includes 26 countries outside of the United State such as Mexico, China and Canada. Now, Wal-Mart totally has more than 6100 stores in foreign country. The step taken by Wal-Mart is to improve and maintain their achievement outside of the home country. Wal-Mart’s strategy which expands their market at international level gains a lot of benefit to their business.

    Read More

  • Strategic Analysis Of Wal-Mart's Supply Chain Management

    1616 Words  | 4 Pages

    The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered. The reason Wal-Mart is ahead of their competition is because they invest in technology in the 1980s. This investment paid off in the long run. Wal-Mart invested heavily in IT and communication systems to effectively track sales and merchandise inventories in stores across the country. They have set up own satellite communication in 1983. Employees at the stores have the ‘Magic Wand’ at hand. These barcode scanners allow you to check the prices of items at that particular store by scanned the barcode on the product. This is especially helpful when there is clearance that isn 't always marked and sometimes clearance items are cheaper than they

    Read More

  • Operational Planning For Wal-Mart

    1617 Words  | 4 Pages

    Wal-mart has a reputation for caring for its customers, of course their employees, and for the prospective public. So Wal-Mart can be an industrial leader for the world of shoppers with an eye for lower affordable prices, company decision makers would continue it's systematic strategies that it's founder and president established years ago. Sam Walton believed in three guiding principles in his strategy planning they were to provide the customer with good value and service, to have a good relationship with its associates, and to be involved with the community.

    Read More

More about Wal-Mart Company Strategy

Open Document