Wal-Mart Stores Analysis

Introduction

Wal-Mart is one of the most popular retail outlets. It is a dominant retail store in Canada, Mexico and the United Kingdom. The fortune 500 index ranks the Wal-Mart as one of the wealthiest and most powerful corporations in the world and with approximately 1.5 billion employees in its 4,200 retail stores globally.

Wal-Mart deals with the following merchandise; family apparel, health and beauty products, household items, electronics, toys, jewelry and shoes; Wal-Mart also operate a pharmacy, tire and lube express and also a photo processing centre.

Sam Walton founded the Wal-Mart in 1962 and identified three policy goals which could define the goals and the objectives of the business; these are respect for individuals, service to customers and strive for excellence.

Wal-Marts Strategy

The company’s management strategy involves selling of high quality products at cheaper prices. To company maintains its competitiveness by selling its goods cheaply; this has been possible because they have taken advantage of the technological advancement in retail logistics. Wal-Mart directly deals with producers and manufacturers and thus are able to get the merchandise cheaply since the brokers are eliminated. This management strategy emphasized workforce and corporate culture.

Wal-Mart takes a special interest in its employees and treats them with a special preference. The following strategies are adopted by Wal-Mart:

Community outreach: this strategy focus on the objectives of ensuring customer satisfaction. It involves itself with the corporate social responsibility like local community services, offering scholarships and also contributing to children and environmental issues. This is important since it fosters customer loyalty and endears the people to the products of Wal-Mart.

Discount merchandising: this takes the form of departmentalized retail business where Wal-Mart offer their merchandise at lower price by accepting low profit margin but increase their volume of sales. This made the company to expand and venture into untapped market in small towns before venturing into small cities.

Product diversification: Wal-Mart rolled their business first in small towns before venturing into large urban centers. During economic meltdown, consumers became mobile and were willing to travel to small towns to shop and this gave Wal-Mart an upper hand. Diversification was in their merchandise and their stores.

Wal-Mart diversified their stores by having the Wal-Mart stores, the super centers, Sam club warehouses and the neighborhood markets; the diversification of the merchandise facilitated easy shopping and involved venturing into groceries, pharmaceuticals and the general merchandise.

The main competitors of Wal-Mart in the market are the K-mart and the Target in the USA. Wal-Mart has a competitive strategy that is aimed at dominating all the sectors that it ventures into; these are cheap pricing, market dominance, outselling competitors and expansion.

Wal-Mart has a corporate directive referred as sundown rule, this concerns Wal–mart employees to reasonably answer the customers or suppliers demands in a time frame of 24 hours. Wal-Mart also has the ten foot rule that require employees to smile, greet as they attend to the customers (Patrick, Seung, Kate and Mike 1).

Tactics of Achieving the Strategies

A discount retailers: To achieve their strategy of dominating the retail market, the founder Sam Walton emphasized on making the store a discount retailer since they sell their products at the lowest price. This has the effect of lowering the profit margin and results in the increased volume of sales. Also Wal-Mart encouraged inter-unit competition and this enhanced its competitiveness and dominance among its competitors. This was instrumental in widening the size and the volume of sales which was the main objective.

Corporate Takeover: To achieve growth and expansion in both US and in international market, Wal-Mart has resorted to engage in corporate take over in any new market. It has been noted that its coverage has the tendency of eliminating any large competitor in the market through the use of the company’s size and wealthy advantage. The company also builds brand familiarity to create and enhance customer loyalty. This has led to the Wal-Mart becoming the largest retailer in Canada and the UK.

To create positive brand and name recognition: The Company has developed the Wal-Mart brand to foster its impression of customer satisfaction. The low prices charged make consumers to associate cheap priced with the Wal-Mart. This is accomplished through advertising and sales promotion. The unique aspect is that Wal-Mart uses their employees in its commercials.

To branch into new sectors of retailing: this strategy has been achieved through venturing into mother sectors like having a pharmacy, an automotive retail shop and grocery shops (Fishman 43).

Company SWOT Analysis

The strength of Wal-Mart lies in its financial ability. Its many braches makes it a dominant player in the market. It goods are priced cheaply and thus it is able to sell in large quantities. The Wal-Mart’s weaknesses include labor problems since they oppose unionized labor, other labor problems are wage issue, work place rights abuses; they also suffer community relation problems since they have been accused of killing the local retail outlets through its monopolistic behavior (Marquard and Birchard 212).

My Opinion on Wal-Mart Stores

Wal-Mart has seized the opportunity to venture beyond retail shopping. With the increase in population and the ever spiraling demand of consumables, the potential of the growth of Wal-Mart is huge. The diversification strategy will enable the Wal-Mart to spread risks that are linked to one line of product.

Since the current strategy and mode of management has led to the growth and expansion of Wal-Mart, I would not propose any change. The only area that requires changes are the employee relations and improving the terms of work and work conditions and to also allow them to join labor unions.

Works Cited

Fishman, Charles. The Wal-Mart effect: how the world’s most powerful company really works and how it’s transforming the American economy. New York, NY: Penguin Press, 2006. Print.

Marquard, William and Birchard, Bill. Wal-smart: what it really takes to profit in a Wal-mart world. New York: McGraw-Hill Professional, 2007. Print.

Patrick, Hayden., Seung, Lee., Kate, McMahon and Mike, Pereira. Wal-Mart: Staying on Top of the Fortune 500 A Case Study on Wal-Mart Stores Inc. Mike Pereira, 2002. Web.