Wal-Mart (Firm Description -- Introduction

Wal-Mart (Firm Description -- Introduction and Overview of the Firm)

Wal-Mart which happens to be in the Discount, Variety Stores industry is a global corporation which operates a chain of retail stores in a number of segments. Established by Walton, Sam sometimes in 1962, the retailer has experienced tremendous growth to become one of the world's largest public corporations based on both the number of employees on its payroll and its resource base. This paper will focus on Wal-Mart, which is currently billed as the world's leading retailer.

Wal-Mart: An Overview of the Firm

Arkansas was the location of Wal-Mart's first Discount City store opened in mid-1962. The State naturally became the location of choice for Wal-Mart's first store as this was the same place in which Wal-Mart's founder, Sam Walton resided. Within a short while, this single discount city store led to the opening of a number of other stores across Arkansas but it was not until the year 1968 that the company expanded its operations to regions outside Arkansas. The ensuing growth of the company saw its incorporation in 1969 and by then, the entity had a total of 38 stores in operation. It can be noted that by the time of its incorporation, the company had also seen its employee numbers swell to just over 1500. However, the company became listed at the New York Stock Exchange in the early 70s though it had already started operating as a publicly held corporation earlier on. It is important to note that right from its establishment, Wal-Mart's growth was largely unprecedented in the retail sector and by the time it was celebrating its 25th anniversary, the number of its stores had not only grown to more than 1000 but it also had more than 200,000 employees in its fold (Wal-Mart N.p).

In general terms, the growth of Wal-Mart during this period was hinged on not only the company's resolve to price its products at a lower price than competitors but also on its embrace of tools and techniques that saw it enhance its efficiency. For instance, in the year 1984, the company undertook a project that saw it sink a total of $24 million into the installation of a satellite network (Gent and Neupert, 89). This network saw all the company's operating units linked to its main office at the time. The project in this case enabled the company's corporate office to communicate instantly with stores in addition to enhancing inventory and sales tracking. This and other early feats of the company can be attributed to its founder, Sam Walton, who was Wal-Mart CEO until his stepping down from the position in 1988. Since the year 2002, Wal-Mart has consistently been ranked on the Fortune 500 list as America's largest company. The only time the company did not appear top on this ranking was in the years 2006 and 2009 in which case the position was taken by Exxon Mobil. In brief, the Fortune 500 compilation brings together the 500 top public corporations in the United States. Ranking in this case is based on gross revenue.

As I have already noted in the introductory section, Wal-Mart operates in the Discount, Variety Stores industry which comprises of quite a number of business segments including but not limited to discount retail and grocery stores. Wal-Mart's main competitors in this industry include the Target Group, Costco Corporation and Carrefour SA. It should however be noted that in terms of revenue, Wal-Mart appears to be miles ahead of the pack with its closest competitor raking in $35.9 billion against Wal-Mart's $195.3 billion in the year 2010. However, it is important to also note that Wal-Mart has occasionally faced stiff competition most particularly for home consumer sales from a number of smaller retailers concerning themselves mainly with niche markets. These small retailers include Dollar General and Family Dollar. Similarly, the company has also had to contend with a significant level of competition in a number of markets abroad.

Currently, Wal-Mart has its operations spread over a number of segments (operating divisions) which include the Sam's Club, the international and the U.S. segments. Through its U.S. segment, the company offers for sale a wide range of goods including but not in any way limited to stationery, mobile phones, cameras, toy products, beauty products, frozen foods etc. Further, under this segment are a number of financial products ranging from bill payments to wire transfers and money orders. On the other hand, the company's international segment has in its fold online retail as well as a number of discount and retail store formats. The company's Sam's Club segment has in place private-label items as well as other merchandise categorized as either soft goods or hard goods. Further, it can also be noted that this segment currently operates 4,263 stores and has a workforce of more than 600,000 workers spread over 15 nations outside the U.S. At the moment, Wal-Mart which happens to be Mexico's and America's largest employer has a total of 2.1 million associates (employees) across the world. In some cases, Wal-Mart's foreign expansion has been marked by the acquisition of retail chains already in operation. For instance, the company's expansion to Canada was preceded by the acquisition of some divisions of Woolworth Canada.

To briefly make a mention of the company's finance and governance, it can be noted that Wal-Mart is today governed by a BOD comprising of 15 members elected by share holders on an annual basis. The current board is chaired by Robert Walton who also happens to be the son of the company's founder -- Sam Walton. The current Chief Executive Officer is Michael Duke. Wal-Mart's recent financial data released on 15th November 2011 indicates that the company's revenues were up by approximately 8.2% in the third quarter of 2011. This is in comparison to the same period last year. The company's U.S. stores recorded revenues of $63.8 billion. In comparison to the same period last year, this represents a 2.7% increase. From the time Wal-Mart's founder died in 1992, an effective cast of managers has largely been successful in consolidating the various gains made by Sam Walton by amongst other things embracing superior management techniques and shrewd decision making approaches.