Wal Mart case study analysis
Added on 2021-04-24
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Running head: WAL-MART CASE STUDY ANALYSISWal-Mart Case Study AnalysisName of the Student:Name of the University:Author Note:
1WAL-MART CASE STUDY ANALYSISAnswer 1Wal-Mart Inc, founded in the year 1962 by Sam Walton, is an “AmericanMultinational retail corporation” which conducts its business through a web of grocery stores,hypermarkets and “discounted departmental stores” (Walmart.com. 2018). According to theForbes Magazine (2016), Wal-Mart is the largest company in the world in terms of annualrevenue (Forbes.com 2018). The annual revenue of the company for the year 2016 was $480(Forbes.com. 2018). It is also one of the largest private employers of the world, employingmore than 2.3 million people from diverse parts of the world (Walmart.com. 2018). Themajor part of operation of the company is based in the United States of America however thecompany has its branches and franchise stores in various diverse parts of the world as well.It is to be noted that the commercial rivalry between the retail giants Wal-Mart andKmart began in 1962, the year of foundation of both the companies. However, in the thirtyyear following the foundation of Wal-Mart and the death of its founder, Walton had alreadymade Wal-Mart the retail giant of the United States (Walmart.com. 2018). The strategies usedby Walton were way head of his time and some of them even revolutionized the retail trade inthe United States of America (Fernie and Sparks 2014). Some of the strategies used byWalton to capture the domestic market of the United States of America and also to out-rivalhis competitors like Kmart and others are discounted pricing, providing the facilities of “lowprices always” on several brands commonly used by the American people, providing regularas well as periodical sales to the customers wherein they can buy goods and services at veryattractive prices and others (Walmart.com. 2018). In addition to this, the “cheerleadingmanagement style” adopted by Walton was lead to the rapid growth as well as thedevelopment of the company (Walmart.com. 2018). The advanced as well as innovativetechnology used by the company like its “sophisticated, companywide point-of-sale and
2WAL-MART CASE STUDY ANALYSISsatellite-communications systems, and in service, symbolized by the “greeters” stationed atthe front doors of its stores” also contributed to the rise of the company as the premiercompany of America (Barney 2012). Another competitive which Wal-Mart had over Kmartwas its focus on the operations section instead of promotion. Therefore, the company Wal-Mart by focusing on its supplier as well as delivery systems, “companywide computersystem”, restocking policy for the products sold, cost control, opening of its branches in theurban areas and various others was able to beat its competitors like Kmart (Chekwa, Martinand Wells 2014).It is to be noted that there were primary four sources for the competitive advantage ofWal-Mart over its rivals like Kmart and others- its distribution capabilities, everyday low-cost products (EDLP), its workforce culture and finally its use of the latest innovations andtechnologies for the handling of its stores and data (Chekwa, Martin and Wells 2014). It is tobe noted that all these four factors contributed equally towards the growth as well as thedevelopment of the company.Answer 2The “Buy it low, stack it high, sell it cheap” policy of Walton worked really well forWal-Mart and contributed greatly towards the overall growth as well as the development ofthe company (Annual Reviews 2018). However, there were many potential threats which thecompany faced in the 1990s. The primary threat which the company faced was obviouslyfrom its rivals like Kmart, Target Cooperation and others which were threatening to break themonopoly gained by Wal-Mart, which was in a precarious position especially after the deathof Sam Walton, the founder as well as the primary reason behind the rise of the company asthe major retail company not only of the United States of America but of the entire world(Annual Reviews 2018). The rise of the “Big Box Phenomenon” posed a serious threat to the
3WAL-MART CASE STUDY ANALYSIScompany (Annual Reviews 2018). Another major Setback to the company was its averageperformance in the countries of Mexico, China and various other countries (Barney 2012).Another threat which the company faced in the 1990s were the various reports which allegedthat the company was hiring underage children to work in their retail stores as workers at arelatively .lower salary (Annual Reviews 2018). The company also had to face some labordisputes not only in far way countries like China, Mexico and others but in the United Statesof America as well. It is at this point of time that the efficient supplier and delivery system ofChina started to show signs of weaknesses. It is to be noted that at this point of time severalof the company’s women employees complained that the company had violated thestipulations of the “1964 Civil Rights Act” according to which discrimination on the basis ofgender related to job promotion, salary, placement and others is a punishable offense (AnnualReviews 2018). These in short were some of the potential threats which the company Wal-Mart faced in the 1990s.Answer 3Kmart Corporation, started in the year 1962, is a “Big Box department store chain”which is headquartered in the United States of America (Kmart.com. 2018). The companiesoperates in most of the famous countries in world and back in the 1960s, 1970s, 1980s and1990s it was considered to be a serious rival to Wal-Mart. It is to be noted that for the year1987 the annual sale for Wal-Mart was $15.96 billion whereas the annual sale for Kmart was$25.63 billion (Kmart.com. 2018). However, the company soon lost its track because of itsineffective strategies, the monopolisation of the market by Wal-Mart and various otherfactors. The company Kmart Corporation can imitate the strategies followed by the companyWal-Mart. However, it is to be noted that the major reason behind the success achieved bythe company Wal-Mart was the effective as well as efficient leadership provided by its
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