Most people think discount retailing began in 1962 – the year that Kmart, Target, and Walmart first opened. But actually, the chain of variety stores Sam Walton owned during the 1950s faced stiff competition from many regional discount stores.
•Sam Walton was(March 29, 1918–April 5,1992) born in Kingfisher to Thomas GibsonWalton and Nancy Lee .He helped to make financial ends meet forhis family by :-He milked the family cow, bottled thesurplus, and drove it to customerspresident" of the class. he would deliver Columbia Daily Tribune newspapers on a paper route. he also sold magazine subscriptions.•Graduated in 1940 with a Bachelors of Economics, he wasvoted “permanent president” of the class.
• The company is controlled by the Walton family which owns 48% stake in Wal-Mart• (1962) The Wal-Mart story began when Sam Walton, our founder opened the company’s first discount store in Rogers, Ark.• (1968) opening of the first stores outside of Arkansas,• (1970) saw the opening of the first Wal-Mart distribution center,• (1971 )company operated in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma.• ( 1979) Wal-mart became the first company to reach $1 billion in sales in such a short period of time
CONT.• (1983)Forbes magazine ranked Wal-mart No. 1 among general retailers for the eighth year . The same year, Wal-mart opened stores in Indiana, Iowa, New Mexico and North Carolina,• (1984) saw Sam Walton doing the hula at high noon on Wall Street.• (1985), 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.• (1992)President George H.W. Bush presented him with the Medal of Freedom,
CONT.• (1996), Wal-mart entered China through a joint-venture agreement• (1997) Wal-mart became the largest private employer in the United States with 680,000 associates, plus an additional 115,000 international associates• (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• Brazil, opened in November (2007)• ( 2009) Mike Duke succeeded Lee Scott as president and chief executive officer,
Strengths:-• Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.• Wal-Mart has grown substantially over recentyears, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA).• The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Marts efficient procurement.• A focused strategy is in place for human resource management and development.
Weaknesses:-• Wal-Mart is the Worlds largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.• 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.• The company is global, but has a presence in relatively few countries Worldwide.
Opportunities:-• The stores are currently trading only in a relatively small number of countries. It is an opportunity for future business in expanding consumer markets, such as China and India• New locations and store types offer Wal-Mart opportunities to exploit market development. They diversified from large super centers , to local and mall- based sites.• Opportunities exist for Wal-Mart to continue with its current strategy of large, super centers.Threats:-• A 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 have fallen because of lower manufacturing costs which also have fallen due to outsourcing to low-cost regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.
At the core of every one of Wal-Mart’s rules and customs is:-the basic value of respect – for the customer, associates, and suppliers.Helps customers save money so that they can live better.Open communications.Effective leaders are servants too.
• Divisions of Wal-Mart:-McLaneNeighborhood markets.InternationalSam’s clubSupercenters.Distribution centers.• 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.• The company operates under its own name in the United States, including the 50 states and Puerto Rico.
Canada Alabama Alaska Arizona ArkansasCalifornia Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana MaineMaryland Massachusetts Michigan Minnesota MississippiMissouri Montana Nebraska Nevada New Hampshire Jersey New Mexico New York North North Dakota Carolina Ohio Oklahoma Oregon Pennsylvania Rhode Island South South Dakota Tennessee Texas UtahCarolinaVermont Virginia Washington West Virginia Wisconsin &Wyoming.
Lower price Maximize salesMinimize volumeexpenses and industry turnover
• “All around the world, we save people money, so they can live better. That’s good news – in any language”.• Their corporate strategy consists of :- Dominance in the Retail Market Expansion in the U.S. and International MarketsCreation of Positive Brand and Company RecognitionBranch Out into New Sectors of Retail
• Wal-Marts international operations currently comprise 4,263 stores and 660,000 workers in 15 countries outside the US. There are wholly owned operations in Argentina, Brazil, Canada, and the UK.• With 2.1 million employees worldwide, the company is the largest private employer in the US and Mexico, and one of the largest in Canada.• Wal-marts investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, whereas ventures in Germany and South Korea were unsuccessful
Examples of Success:- • Sales in 2006 for Wal-marts UK subsidiary, Asda (which retains the name it had before acquisition by Wal-mart), accounted for 42.7% of sales of Wal-marts international division. Wal-Mart continues to do well in the UK, and its Asda subsidiary is the second largest chain after Tesco • It has operated in Canada since its acquisition of 122 stores comprising the Woolco division of Woolworth Canada, Inc in 1994
Examples of failure:-Wal-Mart also had to face fierce competition in some foreign markets• Brazil :- mainly because of not understanding the local culture.• India:- In November 2006, the company announced a joint venture with Bharti Enterprises to open retail stores in India. As foreign corporations are not allowed to directly enter the retail sector in India, Bharti will manage the front end involving opening of retail outlets, while Walmart will take care of the back end such as logistics.• South Korea "it had to sell all its 16 stores”• Germany “ explained”
Germany:-• In the mid 1990s Wal-mart tried with a large financial investment to get a foothold in the German retail market.• The German market used a similar low price strategy as Wal-mart.• Wal-mart’s corporate culture was not viewed positively among employees and customers in Germany, particularly Wal-marts "statement of ethics“.
• Also Wal-mart’s "Big Box – Low Price" Model.• in Germany it had captured just 2% of German food market following its entry into the market in 1997 and remained "a secondary player" behind Aldi with a 19% share.• In July 2006, Wal-Mart announced its withdrawal from Germany. Its stores were sold to German company• This withdrawal & losses were estimated around €3 billion.