Entrepreneurial Development of Walmart Walmart

Entrepreneurial Development of WalMart

Walmart was founded in 1962, in a single retail location in Rogers, Arkansas, financed with personal savings from Sam Walton and his wife. He unique value proposition of the business began was a low-price discount retailer with a broader range of products than comparable discount retailers at the time. Throughout the 1960s Walmart grew to include 15 stores, paying for each out of earnings from operations. In 1972 the company went public, issue stock for the first time on the New York Stock Exchange with the stock symbol WMT. With the infusion of capital, Walmart promptly grew to 276 stores in 11 states by the end of the 1970s. This rapid progression of retail locations illustrates what has become one of the core strengths of the company, which is the ability to quickly evaluate specific store locations and launch new stores in a matter of months (Armbruster-Sandoval, 2006). The entrepreneurial development of Walmart is predicated on their ability to quickly define retail objectives and accomplish them, specifically in the strategic areas of store planning and introductions. Walmart has also shown the ability to plan how their logistics system can be accelerated by the specific stores in their global networks as well (Friedricks, 1995).

Entrepreneurial Development of Walmart

The development of new business concepts and ideas is unique and highly entrepreneurial at Walmart, as it concentrates on creating a strong bond of trust with customers on the one hand, while driving suppliers to low prices and highest quality levels possible (Armbruster-Sandoval, 2006). Walmart concentrates on the price value shopper, re-orienting their entire supply chain, logistics, warehouse management and distribution center operations to drive any extraneous costs out of product and services pricing (Armbruster-Sandoval, 2006). From this standpoint, Walmart is very successful from an entrepreneurial standpoint of galvanizing their entire company around a core value proposition of serving the price value shopper. This focus on the Price Value Shopper is what keeps Walmart entrepreneurial, as purchasing, supply chain management, logistics and distribution center operations all revolve around earning higher c customer lifetime value from this customer base. Walmart estimates internally that the Price Value shopper is 16% of their entire customer base and well over 30% of total profits (Wal-Mart Investor Relations, 2012). Figure 1 is derived from the annual reports and filings Walmart has made with the Securities and Exchange Commission.

Figure 1: Psychographic Analysis of the Wal-Mart Customer Base

(Wal-Mart Investor Relations, 2012)

(Frazier, 2006)