Walmart Inc

Introduction

Wal-Mart is the largest retailer in the world. With its new Wal-Mart Supercenters, the regular Wal-Mart discount stores, and grocery stores, the company has become the second largest grocer in the United States behind Kroger. Its megastores average approximately 180,000 square feet and are located mainly in the South and Midwest. The company's Sam's Club stores operate in 48 states. In 1998 the company operated 1,921 discount stores and 441 Supercenters. Wal-Mart also has stores in South and Central America, Asia, and Europe (Schwartz, 55).

Strategy

Wal-Mart's strategy was devised early in its history when sales peaked at $44 million in 1970. Two major developments accounted for Wal-Mart's success that year and in following years: the company equipped its stores with a computerized inventory system that decreased checkout and reordering time and built highly automated distribution centers, which reduced shipping costs and time. Also responsible for Wal-Mart's success was Sam Walton's initial desire to see Wal-Mart stores in small towns. This strategy was also applied to the Wal-Mart Supercenters, located mainly on the West Coast and in the Northeast, which were intended to provide a one-stop shopping source, putting smaller food and other retailers out of business.

Influences

Sam Walton's strategy proved successful. By 1980 the 276 stores reported sales of $1.2 billion. His marketing instincts, together with increasing disposable income after World War II, accounted for much of Wal-Mart's success. At the same time, distribution networks were changing, allowing retailers greater control over consumer pricing. Manufacturers had previously been required by the government to sell at a single price in a given market, but in reality they offered discounts to retailers disguised as promotional efforts. With the power to set customer pricing, retailers became able to expand their stores, offer larger selection, and become more efficient. Technological changes also contributed to Wal-Mart's management ...