Walmart business model and operations

Wal-Mart I

The company that I will be studying is Wal-Mart. Wal-Mart is the world's largest retailer with over two million employees and annual sales in fiscal 2010 (basically calendar 2009) of $405 billion. Profits for fiscal '10 were $14.335 billion. There is a substantial amount of information about Wal-Mart that is publicly available. As a business icon, Wal-Mart has been widely documented in both the business press and in academic journals. The company's financials can be gathered from a number of financial websites, including MSN Moneycentral. Financial website stories are best located via search engine using search terms related to the specific topic being studied. Other valuable sources of information are Wal-Mart's corporate website, which is walmartstores.com, and the company's annual reports. These sources are published by the company and therefore have a certain amount of bias but they are also the most informative sources as well.

Wal-Mart's mission stems from Sam Walton's credo that saving money helps people to live better. The company has added other missions as well that run alongside this fundamental mission. Wal-Mart considers itself a leader in sustainability, corporate philanthropy and employment opportunity (Walmartstores.com, 2010).

This basic mission relates to the needs of the company's major stakeholders. For example customers are a major stakeholder and they benefit from the company's efforts to contain prices, particularly in light of the flatlining of real earnings growth since the 1970s. That the company now has tens of millions of customers each month indicates that for many consumers Wal-Mart's mission is directly reflected in its strategies -- they benefit just as Sam Walton predicted they would.

The company's shareholders have long benefited from its approach. Although the stock has failed to gain much traction in the past few years as the result of the maturation of Wal-Mart's business, the company's rapid growth over the previous decades delivered tremendous value to shareholders. Employees and managers have also benefited from Wal-Mart's approach. In addition to job creation, Wal-Mart's wealth and might have allowed it to enrich the lives of its employees. For example, the company subscribes to the principles of respect for the individual, service to customers and striving for excellence, each of which allow employees to feel good about their jobs and lives.

The company's suppliers for the most part are also beneficiaries of Wal-Mart's mission. The suppliers capable of managing a high-volume, low-cost strategy benefit from the tremendous volumes that Wal-Mart offers them, which allows them the profitability to build their capacity and strengthen their businesses. Wal-Mart's mission therefore in theory is able to deliver value for all of the company's major shareholders. The strategy is predicated on strong growth that results from pleasing the customer. Not only does this focus the company on delivering value to the customer, but it also creates benefits for a wide range of other stakeholders as well. While these benefits are not universal, such benefits should not be expected to accrue to every consumer and every supplier. Wal-Mart has also garnered criticism for its perceived damage to the communities in which it operates, but the company argues that these claims are false. It is difficult to ascertain if the community as a stakeholder is served by Wal-Mart simply for lack of adequate, consistent measures and a lack of unbiased sources of information about the subject. Aside from these concerns, however, it is clear that Wal-Mart has become so successful in large part because its activities do meet the needs of its stakeholders.