Wal-Mart Stores Inc.
A Case Study on Management Evolution
This case study is an examination of how the Wal-Mart's management structure evolved and ranked three in the Fortune Global 500, 2012.
1. Market Penetration
2. Market Development
3. Product Development
Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas. Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.
On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas when he noted the need for serving customer in small towns. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma. Retailers such as Kmart and Sears focused on big towns. This created an opportunity for Wal-Mart to fill people’s needs in rural areas. This small-town orientation is reflected in the company’s values, which emphasize maintaining good relationships with staff as well as suppliers. The focus on cost savings enables the company to offer “everyday low prices”, which has become the familiar company slogan. The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1970, and was soon listed on the New York Stock Exchange. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million Wal-Mart opened its first Texas store in Mount Pleasant on November 11, 1975. Case background
Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth of goods last year. To get a sense of just how big Wal-Mart is today, consider these facts: * Wal-Mart employs 1.6 million people. To give us an idea of just how many people that is, Idaho, the 39th most populous state, is home to 1.4 million people. * Wal-Mart had sales of $312.43 billion in its most recent fiscal year, which ended January 31, 2006. By comparison, the second-largest retailer in the country, Home Depot, posted sales of $81.5 billion. * Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has 2,040. Wal-Mart Stores Inc. branded as Wal-Mart since 2008 and Wal-Mart before then, is an American public Multinational Corporation that runs chains of large discount department stores and warehouse stores. The company was the world's largest public...
Please join StudyMode to read the full document