Walmart - Research Paper Example

Wall-Mart Introduction A progress in economy is achieved only when there is an uninterrupted productionand consumption force. The growing population has made sure that the latter is always satisfied. It is the productivity that has a volatile quality attached to it. Productivity is one major force that can push the economic prosperity of any country, provided the workers and producers work towards the development of quality and cost-effective products. In the current scenario, with economic exploitation and commercialization spreading across at a rapid rate, there is an opportunity for everyone to compete in an equal environment. To be on top of such an environment, for more than three decades, it must take a great deal of effort and commitment. In this case, all those terms that define and celebrate success can only be associated with Wal-Mart, the world’s leading super-market. Be it in pricing of the products, implementation of latest technology to manage inventories or in customer satisfaction, Wal-Mart has always succeeded in achieving the best. The have become the largest employer in private category and have an outstanding record of having 8 out of every 10 Americans to be their customers. ( Lichtenstein, 2010) It has always been the case where they set the benchmark for the successful running of a private organization, and always, other competitors have followed their footsteps. Wal-Mart – How it began It all started, when a small time business man, Sam Walton, decided to start an innovative grocery store, innovative not by its design but by the principal of its working. When every other grocery store owner was trying to pocket the maximum discount got from supplier’s end, Walton decided to give it to the consumer itself. The principle behind that being, less price means less profit and more sales but, more sales guarantees a consistent profit. It was an instant success and riding on it, Walton went on to open Wal-Mart, his first of the many grocery stores, in the year 1962. (Frank, 2011) Strategies of Wal-Mart Living a very modest life, Sam Walton was extremely frugal in his expenses. His mode of living helped him to focus on the principle of selling quality goods at low cost so that people get benefitted for each of their shillings they spend. The company still continues to work on this principle and continues to reap success. (Frank, 2011) The strategies of the organization are based on the motives given below: To be on top of the retail market ladder in each of their branch location By expanding the size of each store and selling every product at a cost comparatively lower to their competitors and by expanding their volume of sales, they have managed to achieve being a top company in retail market. To have a global expansion They have sustained their dominance by expanding globally. They have also spread their bases in eastern countries like China and India and have also made efforts to open outlets in developing countries. As a proof of their global expansion, they have about 2 million employees working in the organization, with 27 brands of Wal-Mart products and around 8000 retail outlets spread out in 15 countries. In 2009 alone, they have spent more than 4 billion to expand their outlets. (Densley, 2010) To improve customer satisfaction by developing a sense of trust about Wal-Mart They aim to achieve supreme quality with the products they sell through their brand name and provide the same at the lowest price possible. To improve the satisfaction of the customers, Wal-Mart has even made partnerships with other businesses like the food stores (e.g. McDonalds) and hang-out stores to allow them to keep a branch within their outlet. This helped the customers to have a feel of a complete and happy shopping experience. To expand business in other commercial product sectors. In the recent years, Wal-Mart has successfully ventured into new sectors like the pharmacy market, auto-markets, electronic products etc. They have maintained their organizational policy of selling products at low cost in these sectors too and thus managed to achieve stupendous success in all sectors. These are the strategies of Wal-Mart and they have successfully implemented it. The success story The size of Wal-Mart and the statistics of its profit clearly present a success story of the company. The success of the store is to such an extent that their entire market capitalization is equal to the GDP of an entire country, Nigeria. Having its roots in America, the company has its stores located at approximately in a distance of 15 miles for every American – a hallmark of being the world’s largest retailer company. It has completely monopolized the retail sector of the world. Although monopolization is bad for any country, the fact that 2 million people would lose their jobs if Wal-Mart shuts down makes the company an important factor for sustenance of economy of the country. If a monopolized organization plays such a critical role in the running of the government then it should say it all about the success of the company. (Densley, 2010) Competitors The biggest competitors of Wal-Mart are Target, Costco, Dollar stores and Amazon.com. All these competitors, except for Target, compete with only a specific section of Wal-Mart. Amazon is the primary competitor for Wal-Mart in its online shopping but there is no foreseeable threat for Wal-Mart from Amazon in the near future. Wal-Mart could face stiff competition in grocery stores sector when there is some means of consolidation. But the biggest advantage of Wal-Mart is the non-union workforce which negates any hindrance to its productivity or sales. Target is the only one close to compete with Wal-Mart as it provides products with better quality than its competitor. But, with its current size, it would take several years for it to compete strongly. Costco, on the other hand poses a serious threat to the low cost strategy for Wal-Mart. Costco sells only one brand in each product and thus makes highly subsidized deals with the suppliers. It is expected to expand rapidly than Wal-Mart in the next few years and has shown indications to strongly compete Wal-Mart. Dollar store is consistently eating into some of the customer base of the Wal-Mart, but the pace of expansion is too slow to pose any serious competition to Wal-Mart. ( Lichtenstein, 2010) How Wal-Mart dominates The fact that the next largest seller has a profit which is less by 250 billion from Wal-Mart’s profit clearly shows how Wal-Mart dominates the retail sector. (Densley, 2010) Another major factor for its success and domination in overseas markets is that it is able to rightly understand the needs of the consumers of that region and has been able to sell products according to their needs. Wal-Mart has always ensured that the stakeholders get their full benefits. Wal-Mart is known to hire people even if they are uneducated or having only low level of schooling and offer them equal wages. This allows them to maintain a payroll process that is cheap and at the same time effective. Wal-Mart managed to go online well before any other similar organization started such venture. This showed that Wall-Mart has the right kind of technology and as a result, pulled in a large number of online shoppers under its base. With such marketing and competitive strategies, Wal-Mart is sure to dominate the retails sector across the world in future. ( Lichtenstein, 2010) Conclusion Wal-Mart has almost come to a saturation point in its growth in America and its future growth and dominance entirely depends on how well it expands in the developing countries. More and more suppliers of products are trying to make a deal with Wal-Mart - a deal which could make or break the success of any new company. Wal-Mart takes advantages of such brands and gains the most by making deals at the lowest price when compared with its competitors. Thereby, it ensures that it sells the products at the cheapest price. Till now, no other competitor has been able to identify the complete business strategy of Wal-Mart and as long as that state remains, Wal-Mart will continue to rule the retail business sector of the world. Works Cited Densley, Ross. “Walmart - Does bigger always mean better?” NG Retail. 30, Mar. 2010. Web. 3 Mar. 2011. http://www.ngretaileurope.com/news/walmart-does-bigger-always-mean-better/. Frank, T. A. “A Brief history of Wall-Mart”. Washington monthly. April, 2006. Web. 3 Mar. 2011. http://www.washingtonmonthly.com/ Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. UK: Picador. 2010. Print Read More