Explore BrainMass

Wal-Mart Strategy

Wal-Mart Stores, Inc On Becoming the World's Largest Comapny 2002

What is the current situation (2002yr) for Wal-Mart?

Conduct a EFAS, IFAS and SWOT Analysis of WaMart 2002?

What Strategic alternatives and recommedations are open to WalMart 2002? Explain your answer

What implementation can be used for WalMart2002?

What type of Evaluation and Control are open to WalMart 2002?

Solution Preview

Founded in 1962 by Sam Walton, Wal-Mart followed an amazing pattern of success and growth, eclipsing all other U.S. department store retailers by the early 1990's. In early spring 2001, Wal-Mart enjoyed a huge market capitalization of over $230B, which was down from highs of nearly $300B in early 2000. Wal-Mart Stores, Inc. is the world's largest retailer and the largest company in the world based on revenues, ignoring profits (income), assets, and market capitalization. In the fiscal year ending January 31, 2002, Wal-Mart had $219 billion in sales and $6.6 billion in net income. It employs over 1 million people in the United States at 3,400 stores and 1.4 million people worldwide at 4,500 retail units in 10 countries: the United States, Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea, Germany, and the United Kingdom (where it owns the ASDA chain of supermarkets).
Sam Walton, the founder of Wal-Mart, opened the first Wal-Mart store in Rogers, Arkansas in 1962. The company is publicly traded at the New York Stock Exchange under the symbol WMT and has its headquarters in Bentonville, Arkansas.

Wal-Mart operates large discount retail stores selling a broad range of products such as clothing, consumer electronics, drugs, outdoor equipment, guns, toys, hardware, CDs and books. Its typical products are basic, mass-market equipment, rather than premium products stocked at specialist stores. Wal-Mart also operates "Supercenters" which include grocery supermarkets. SAM'S CLUB stores are also owned by Wal-Mart; these are "warehouse clubs," which require a paid membership to access. (Wikipedia)

Wal-Mart's chief competitors as discount retailers include the Kmart Corporation and the Target Corporation.
With respect to traditional operations, Wal-Mart continues to enjoy success. Despite the emergence of other bricks-and-mortar competitors such as Target, Wal-Mart's cost position and relationships with suppliers still differentiate it from the competition. Its value proposition continues to be successful, and it remains a darling of Wall Street analysts. Finally, as the fervor over business-destroying dot-com ventures wanes, Wal-Mart continues to show a high level of durability potential in its traditional operations.
Perhaps the transition difficulty in the early years rested in the area of Wal-Mart's technical prowess. One of Wal-Mart's core competencies is its operational ability to streamline the supply chain through cross-docking inventory systems and efficient means of communication through technology.

Wal-Mart operates as an aggregator, distributor, and retailer of consumer goods. Due in part to its size, to the connectivity involved in its operations, and to the zest with which it has traditionally negotiated supplier contracts, Wal-Mart has established itself in a key position in the value chain of its suppliers. It is consumer goods giant Procter & Gamble's largest customer, and holds a significant power position relative to other smaller suppliers. This position has enabled Wal-Mart to obtain superior price breaks relative to the competition on the products it carries. Its size has obviated the need for separate distributors or wholesalers in the value chain. Coupled with the efficiency of its distribution network and store model, Wal-Mart has achieved a well-entrenched position in the value chain of its customers as well - that of the lowest cost consumer goods retailer. Hence, the value that Wal-Mart provides is two-fold. First, it provides value to its suppliers by operating as a large, relatively stable, nearly omnipresent channel for sales of goods, which provides rapid feedback on unit sales and localized demand. Secondly, and arguably more importantly, Wal-Mart provides value to customers by offering aggregation of a wide variety of consumer goods in a single location, and selling those goods at the lowest prices.

Wal-Mart Stores, Inc. (Wal-Mart) operates retail stores in various formats worldwide. The Company organizes its business into three principal segments: Wal-Mart Stores, SAM'S CLUB and International. The Wal-Mart Stores segment is the largest segment of Wal-Mart's business, accounting for 67.3% sales during the fiscal year ended January 31, 2005 (fiscal 2005). The segment consists of three different retail formats, all of which operate in the United States. The Company's SAM'S CLUB segment consists of membership warehouse clubs that operate in the United States, and accounts for 13% of fiscal 2005 sales. The international segment consists of retail operations in eight countries and Puerto Rico, and generated 19.7% of Wal-Mart's fiscal 2005 sales. In addition, the Company owns an unconsolidated minority interest of approximately 37% of The Seiyu, Ltd., a retailer in Japan.
Wal-Mart operates discount retail department stores selling a broad range of products. It typically stocks basic, rather than premium products. Wal-Mart also operates "Supercenters" which include a full line of grocery items. Wal-Mart also operates Sam's Club; these are "warehouse clubs" which, like Costco, require membership dues and sell merchandise in large and inexpensive sizes and quantities.

Wal-Mart operates 5 major retail formats under 3 retail divisions:

* Wal-Mart Stores USA
o Wal-Mart Discount Stores ? Average 100,000 square feet (9,290 m²) and include a selection of general merchandise, including apparel, electronics, health and beauty aids, toys, sporting goods, and household products.
o Wal-Mart Supercenter ? Average 187,000 square feet (17,400 m²) and combine a standard Wal-Mart Discount Store with a full-line supermarket. (commonly known as big box stores)
o Wal-Mart Neighborhood Market ? Average 43,000 square feet (4,000 m²) and include grocery, pharmacy, and limited general merchandise products.
o ? Online shopping site that offers merchandise different from that in stores. The site also offers digital music downloads with digital rights management (DRM) and online photo processing.
* SAM'S CLUB ? a membership-only wholesale warehouse club focused mainly on serving small business owners. Clubs average 128,000 square feet (11,891 m²).
* Wal-Mart International ? operates various formats internationally, including (but not limited to) SAM'S CLUB, Discount Stores, Supercenters, Supermarkets, and restaurants.

Sam Walton had a philosophy of "people first", I believe this sums up the Wal-Mart Mission and Vision. He said ,"Our goal has always been in our business to be the very best and, along with that, we believer that in order to do that, you've got to make a good situation and put the interests of your associates first. If we really do that consistently, they in turn will cause.....our business to be successful, which is what we've talked about and espoused and practiced. The reason for our success is our people and the way that they're treated and they feel about their company."

Board Of Directors

Aida Alvarez
James W. Breyer
M. Michele Burns
James Cash, Jr., Ph.D.
Douglas N. Daft
David D. Glass
Roland A. Hernandez
Jack C. Shewmaker
Jim C. Walton
Christopher J. Williams
Linda S.Wolf
H. Lee Scott, Jr
Also President and CEO of Wal-Mart Stores, Inc.
S. Robson Walton
Also Wal-Mart's Chairman of the Board

Top Management OF WalMart

Mr. H. Lee Scott Jr., 57
Chief Exec. Officer, Pres, Director, Chairman of Stock Option Committee and Chairman of Exec.

Mr. Thomas M. Schoewe , 53
Chief Financial Officer and Exec. VP

Mr. Eduardo Castro-Wright , 50
Exec. VP, Chief Exec. Officer of Wal-Mart Stores Division of USA and Pres of Wal-Mart Stores

Mr. Michael Terry Duke , 56
Vice Chairman of Wal-Mart International, Chief Exec. Officer of Wal-Mart International and Pres of Wal-Mart International

Mr. John B. Menzer , 55
Vice Chairman of Wal-Mart Stores USA

External Factor Analysis Summary: Here we will analyze the affect of societal forces and to see what trends are like to affect the retail industry in which the Wal-Mart is operating in a brief manner.
? Economic Forces: One has monitor the economic trends like GDP trends, Interest rates, Money supply, Inflation rates, Unemployment levels, Disposable income. Currently in USA there is recession but in other parts of world there is growth especially in Asian countries. Individual economies becoming interconnected into a global economy.
? Technological Forces: Impact of Internet, virtual online stores, using Internet effectively to increase the reach and to reduce the cost. Portable Information Devices, Electronic networking, smart mobile ...

Solution Summary

This explains the Strategy of Wal-mart including EFAS, IFAS and SWOT Analysis with Strategic alternatives and Recommedations