Wal-Mart is an American publicly incorporated large retail company founded by Sam Walton in 1962. The secret of Wal-Mart’s tremendous success is its ability to provide an immense number of merchandise from electronics to pharmaceutical goods at a discounted price all in one store. As the largest employer in the world, Wal-Mart enjoys an estimated 20% of the retail grocery business. Recently, after years of disappointing investors, shares of the discount chain have jumped to a four-year high. But are they now too pricey? Compared with the broader stock market, Wal-Mart's stock performance has been tremendous. While the Standard & Poor's 500-stock index has tumbled almost 9% so far this year, Wal-Mart shares rose 21%.
Wal-Mart centered its business on small-towns first, and then tried to move to large cities. This happened while other retailers centered on larger urban areas. However, as the economy faced an economic downturn, people wanted low priced goods and as people became mobile, they moved to small towns and suburban areas and were willing to travel further to buy low price products. Interestingly enough, as Wal-Mart’s popularity grew the main issue facing management became how to sustain their extraordinary growth. As the domestic markets become saturated, a strategy for improving internal operations and acquiring brand name distinction are imperative.
Wal-Mart needs to recognize and nurture their key core competency that stimulated their growth: carrying out customer needs with a wide range of products at discounted prices. This particular competency is the product of cumulative competencies across a single skill set. This skill set lies in Wal-Mart’s leadership in channel management, customer service, inventory control and distribution. This is the result of the companies’ ability to organize a complex information management and allocation...