Wal-Mart: The Superpower of the Retail Market

Wal-Mart: The Superpower of the Retail Market

Walmart is America's largest chain of wholesale departmental and grocery stores and a multinational retailer corporation. Its first discount centre was established in 1962 by Sam Walton in Rogers, Arkansas, and was incorporated in 1969 (Roberts & Berg, 2012). As per statistics of Fortune Global 500, it is "USA's greatest retailer," "worldwide biggest private employer," and the "world's third-best public corporation" (Johanson, 2006). Today, it operates nearly 8500 stores in 15 countries and Puerto Rico, and in 2011, it generated a staggering $256.3 billion in sales revenue (Giudice, 2012). It operates under different names like Walmex (Mexico), Best price (India), Asda (UK), and Seiyu (Japan) etc. It basically operates discount stores where all popular national brands are provided at wholesale rates. The business started with clothing, and then was further expanded by involving grocery items and electronics (Roberts & Berg, 2012). Walmart's primary mission is to provide inexpensive goods to its customers. According to the Walton, "Quality, name-brand merchandise offered at everyday low price is the merchandising/pricing format around which we have constructed the Wal-Mart store" (Roberts & Berg, 2012). The Wal-Mart Empire involves four concepts. The customary discount stores, Wal-Mart Supercenter which is a combination of grocery and discount stores and contains over 100,000 items, the Wal-Mart neighborhood market where groceries are provided in a traditional building format, and Sam's wholesale club, which is a membership-based warehouse store (Penton Media, 2002). Walton has instilled a corporate culture at Walmart that incorporates a system of shared values, beliefs and actions. He always believed on deriving profits from the distributors and not the customers and implanted a frugal yet diligent business culture which is observed until today (Roberts & Berg, 2012). Wal-Mart has achieved great success because of its organizational culture that involves team work, open communication, efficient and responsive customer support, modest approach in the form of Servant Leadership, and the famous 10-foot rule (Penton Media, 2002). The core business has remained unchanged throughout, and the company's future objective involves making Wal-Mart the most successful global empire by 2015, and to provide 500,000 employments worldwide (McShane, 2010).

Answer 2:

In my opinion, Wal-Mart's strategy for achieving global success and to capture the largest proportion of the consumer market is by providing quality products at affordable rates. The phenomenal growth of the corporation so far establishes the fact that this strategy has definitely worked. An analysis of its SWOT is as follows:

Strength: The Company's strength lies in its reputation, i.e., value for money, core competence, and the culture of prioritizing customer satisfaction. It has effectively eliminated most of its key competitors, like buying Asda in UK, this strategy added strength to its hold on the consumer market (Kneer, 2009).

Weakness: This expansion formulates the weakness of Wal-Mart because the more it will expand, the more difficult it will be to manage every segment with equal attention. The wide variety of services offered is also a weak point because there is a possibility of losing focus and allowing competitors that deal in specific sectors gain strength (Guidance, 2012). An example would be the growing popularity of Dollar stores in home consumer products. The company's success in western hemisphere and failure at other locations indicates that the leadership lacks the proper cultural understanding of diverse regions (Giudice, 2012).

Opportunities: Focus on specific areas is the key towards success. It is important to focus on some significant locations for further expansion, like the many prominent markets of China, India, or European regions rather than looking for opportunities everywhere around the world (Kneer, 2009). This may involve capturing, merger or strategic alliance with potential competitors (Kneer, 2009). There are tremendous opportunities and scope for Wal-Mart's trade mark super-centre style stores, as well as for small malls in these markets.