Wal-Mart Nation the Dream of Sam Walton Term Paper

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Wal-Mart Nation

The dream of Sam Walton was a simple one: "Give people high value, low prices and a warm welcome" (Walton, 2003). At an early age, he was working hard delivering what the customer needed and wanted at a reasonable price - newspapers and selling milk from the cow (Huey, 1998). The development of Wal-Mart, KMart, and Target has brought about a retail business that is highly competitive within the communities of America. Through the years, a trend has developed that encompasses each corporation. This paper will discuss the phenomenon of Kmart, Wal-Mart, and Target and how large corporations have affected today's economy, communities, and lifestyles.

On July 2, 1962, at the age of 44, Sam Walton opened his first Wal-Mart store, in Rogers, Arkansas S.S. Kresge launched K. Mart that same year, and Dayton Hudson began its Target chain. Discounting had hit America in a big way, and the world of retail changed significantly (Huey, 1998). However, with the extensive growth of the Wal-Mart organization and the expansion into a Superstore, Wal-Mart has taken the country by storm, eliminated the competition, while also creating opposition to the growth of an emerging monopoly. Kmart has struggled to keep up and had to close several stores in many areas, while filing for bankruptcy on January 22, 2002 (Turner, 2003). They have met the demand of competition by rebounding with their own type of Superstore. Target is also flourishing since they have concentrated to expand in larger areas, and have appealed to customers who want something besides what is available at "Wal-Mart." Target's merchandise, clean environment, and impeccable customer service are methods that are utilized to keep the customer satisfied. The low prices and quality products are fabulous, but they are not the only factors that distinguish Target from its competition. The "human touch" is remarkable and draws people back to Target for repeat visits (Rowley, 2003). These companies have each been successful visionary companies sharing common core values (Collins and Porras, 2002). Each corporation works to improve the life of the customer, while also building employee relations, and providing great prices with an appealing selection. While Wal-Mart has focused and changed with the way America worked and lived, Kmart and Target have also met the lifestyles of the new Americans.

Each company must anticipate where things are headed and work to understand the implications of the social and demographic currents in the field of fashion, household goods, automotives, and eats.

The phenomenon involves all people in each community. Everyone across the nation is involved voluntarily or involuntarily. The ability to shop in stores week after week because of the variety, ease of locating many items under one roof, and of course, lower prices helps to creat this phenomenon. Not only do people enjoy shopping at the stores, but the customer also feels special with the friendliness of the employees and the excellent customer service that each corporation is so very proud of. While the average American spends their hard earned money at Wal-Mart, the nationwide chain boasts of "a top-line revenue figure of more than $220 billion" (Craig, 2002). The other stores also boast large numbers. Each year has seen record growth and projections for next year seem just as optimistic.

The retailing industry keeps up with the customers needs and wants through technology. Greenhouse (2004) explains, "When retailing began centuries ago, salesmen were needed to explain goods to customers. But Wal-Mart follows a different model. Using technology, the company collects detailed information on the billions of purchases its customers make each year. Based on that information, it orders products at low prices, confident that customers will like the merchandise and the prices, thus eliminating some of the need for an informed sales force."

In the world of retail, there is also much controversy about the merchandise that is put on the shelf for purchase. While condoms, hunting rifles, and cigarettes, and R. rated video games may be purchased at these stores, marketing personnel do not allow the sell of handguns, rolling papers, or the movie South Park to be sold (Saporito & Thigpen, 1999). Representatives of Wal-Mart maintain that they are a family store and will market their merchandise to reflect family values. While retailers know they can't be the nation's conscience, their leadership in determining what to sell affects many moral decisions of their customers. Soderquist, senior vice chairman of Wal-Mart stated, "The watchword for all of our people is 'Do what is right.' That's what we really preach and teach and we want, but there's so much gray" (Saporito & Thigpen, 1999). Strasser (Greenhouse, 2004) states that low-cost goods affect our "global environment, global human rights and the global labor force."

Consumers are being encouraged to over consume and over develop, thus putting a strain on our natural resources.

However, Sam Walton's "drive to dominate" (Rowell, 2000) has also created financial hardships for other companies such as Kmart, Target, and the small town mom and pop stores where so many American's grew up buying groceries and clothing. The margin that divides Wal-Mart and "it's nearest competitor is more than $150 billion" (Craig, 2002), and this figure continues to grow at a rapid rate. Wal-Mart's price matching with their competitor is a marketing technique that keeps the consumer out of the competitors' aisles and keeps the dollar in Wal-Mart register. The executives at Wal-Mart are now also beginning to eliminate their own cashier positions by installing self-check out lanes and thus keeping prices down by cutting back on employee hours.

Wal-Mart's Contribution to Society

Wal-Mart's maintains its commitment to each community and seriously show their responsibility as a corporate neighbor. Local Wal-Mart stores have made a difference in their communities by (Wal-Mart.com, 2003):

Underwriting college scholarships for high school seniors.

Raising funds for local children's hospitals via the Children's Miracle Network Telethon.

Educating the public about recycling and other environmental concerns via a "Green Coordinator," a specially trained associate who coordinates efforts to make each store environmentally responsible.

Sponsoring a Community Matching Grant program, which involves fund-raising efforts by a nonprofit organization with the participation of Wal-Mart associates.

Sadly, while Wal-Mart stores strive to show leadership and support within each community where they are located, they have instead created a legacy as a company who's "success has come at a huge ecological, cultural and social price" (Rowell, 2000). Rowell states that opponents are convinced that Wal-Mart has "systematically scarring hometown America, is notorious for low wages, and that there is evidence that it imports goods from nations where the workers are either enslaved or paid a pittance" (Norman, p.15, 1999). While competitors are forced from business within the surrounding area, the large discount chain also cripples local communities while leaving a sprawling wasteland.

Growing Opposition to Wal-Mart

This phenomenon has many effects on individuals, communities, and also affects the identity of the nation. Many problems and issues are a direct result of its influx within America's communities. Kmart and Target struggle to survive. Wal-Mart gains superiority by crushing the competition and no company is immune. Kalish (Saporito, Boston, Gough, & Healey, 2003) states that "Wal-Mart's Supercenters are able to underprice their supermarket competitors about 15%."

Research (Rowell, 2000) shows that within "ten years of Wal-Mart moving into the state of Iowa, the state lost over 555 grocery stores, 298 hardware stores, 293 building suppliers, 161 variety stores, and 158 women's clothing stores, 153 shoe stores, 116 pharmacies, and 111 children's clothing stores." Study after study shows that when Wal-Mart comes into a town, jobs are destroyed, thus creating a weaker economy. When Wal-Mart entered Virginia, the company promised the arrival would create "246 part-time jobs." However, 248 full-time jobs were lost within the local business sector as a result. Part-time jobs do not pay full benefits, so many of Wal-Mart employees do not have the privilege of company covered health insurance or retirement plans (Quinn, 2000). AFL-CIO President, John Sweeney, argues that the practices of Wal-Mart are dragging the economy back into the 19th Century. However, that argument is not very valid, since Wal-Mart's wages are competitive with those paid by rivals such as Kmart and Target with over "800,000 new jobs are expected to be created by Wal-Mart in the United States over the next five years" (Saporito, Boston, Gough, & Healey, 2003).

Opposition remains a growing topic among the food stores when a Wal-Mart considers moving into an area. A study (Huang, Epperson, Cude, & Woo, 2002) describes the results when a Supercenter opened in Athens, Georgia on January 25, 2000. Athens, population 101,439 (Bureau of Labor Statistics, 2000), is considered a small metropolitan area that had several supermarkets such as Bi-Lo, Food Lion, Harris-teeter, Ingles, Kroger, and Publix. The addition of the Supercenter not only created price reductions, but each supermarket displayed creative pricing strategies designed to attract the consumer (Slater, 2003). Other factors such as location, price clubs, loyalty cards, and loss leaders contributed to various degrees of success among the food stores. However,…[continue]

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