Wal Mart Case Study

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Corporate Strategy Course
Prof.Erik Larsen
Case Study

[pic]Wal Mart Stores, Inc. [pic]

• Introduction
• SWOT Analysis
• Value Chain
• Porter’s 5 forces
• Conclusion

Agnese Santocchi

INTRODUCTION

WalMart was founded when, in 1962, Sam Walton invested 95% of the capital –co exming from his Walton 5&10 in Bentonville, Arkansas- to open the first WalMart store. What he wanted to do was to achieve higher sales volumes by keeping sales prices lower than his competitors. This made it possible for the Company to grow across the state of Arkansas and expand afterwards to Missouri and Oklahoma –by 1972 they were already operating in five states: Arkansas, Kansas, Louisiana, Missouri, Oklahoma. By 1979, with 276 stores and 21,000 associates, WalMart reached $1.2 billion in sales having also introduced pharmacy, auto-service center and jewerlry division. Meanwhile the number of stores kept growing exponentially, the first Sam’s Club store -a membership-based discount warehouse club- appeared: they sold high volume and low cost merchandise sticking to the “cash&carry” philosophy. Sam’s Club also opted for the cannibalization of its own sales, leaving no room for competitors. It was in 1988 that David Glass was named CEO of the Company as Sam Walton stepped down, remaining as a Chairman of the Corporate Board of Directors. In the same year the first so called WalMart Superscenter, opened in Washington (Missouri): the supercenter featured everything that was already in a standard WalMart discount store but offered, in addition to that, a tire and oil change shop, optical center, one-hour photo processing lab, portrait studio, and numerous other shops such as banks, cellular telephone stores, hair and nail salons, video rental stores, as well as some fast food outlets. In 1991 they decided to expand to go international and that is when they opened the first store in Mexico City (Mexico). 1991 also saw the launch of the Sam's American Choice brand of products. Sam Walton died on April 5, 1992 but both sales and earnings had increased overtime (from $16bill in 1987 to $67bill in 1993 the former, from $628mill to $2.3bill the latter). By 1995, WalMart had 1,995 discount stores, 239 Supercenters, 433 Sam’s Clubs and 276 international stores and 81 warehouse Bud’s outlets. After having entered the Chinese marketing 1996, and the South Korea one –two years later, they made ASDA chain –in the UK- a subsidiary in 1999. During 21st century WalMart entered the Japanese market and replaced the old slogan "Always Low Prices, Always" with the newest "Save Money Live Better" and unveiled the Company’s new Logo. As it is nowadays, WalMart stores operate in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, the United Kingdom, and the United States. SWOT ANALYSIS

When starting to think of a SWOT Analysis of WalMart, what they do right and what their strengths are, as well as what their weaknesses are, need to be taken into account. Along with that comes the analysis of the opportunities and the threats the Company has to face and deal with. The following aspects could be considered WalMart main strengths: • the fact that it is a company with a powerful retail brand -WalMart has a reputation for value for money (as Sam Walton believed in the value of the dollar) convenience (keeping the prices below everybody else’s) and a wide range of products all in one store; • global expansion and substantial growth over the recent years; • core competence involving its use of information technology to support its international logistics system (Electronic Data Interchange –EDI, and electronic scanning devices for prices); • associates are crucial to Wal-Mart's business –indeed it invests time and money in training people and they also offer flexible hours, competitive wages,...
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