History: Beginning to Today
Wal-Mart is a general merchandise discount retailer, which was incorporated in 1962. Wal-Mart’s history is based on one man, Sam Walton, who changed the course of retailing forever. Sam Walton first entered retailing when he was a management trainee at J.C. Penny Co. in 1940 in Des Moines, Iowa. After serving in the Army in World War II, Walton acquired a Ben Franklin variety store franchise with his brother James Walton in Newport Arkansas, until they lost the lease to the store in 1950. By 1962, when the first Wal-Mart Discount City was opened in Rogers Arkansas, both Walton’s were operating fifteen stores under the “Walton 5 & 10” name, and were the largest Ben Franklin franchisee in the country. Limited pricing, low gross margins, and high inventory turnover characterized these stores. Walton phased out the stores in 1976 in order to focus on the emerging Wal-Mart stores. In 1978, the first distribution center was built, followed by the first Wal-Mart Supercenter in 1983 and a Sam’s Club in 1988.
Important to Walton, and ultimately Wal-Mart, are certain philosophies that were amounted over time. Walton held these values tightly, and engrained them in the Wal-Mart cultures. From his experience at J.C. Penny Co. he was impressed with the philosophies they used (e.g. “The Penny Idea”) and used them to mold Wal-Mart. This included referring to employees as “associates”, serving the public to their complete satisfaction, and receiving a fair profit from services rendered. Walton’s theory on what Wal-Mart should be is “a conveniently located one-stop shopping unit where customers could buy a wide variety of quality merchandise at discount prices.” And as Wal-Mart grew, management sought a firm that was a “discount department store chain offering a wide variety of general merchandise to the customer.” It was on these values and philosophies that Wal-Mart expanded.
Wal-Mart has grown above and beyond the Arkansas store that opened thirty-nine years ago. It serves more than 100 million customers weekly in all of the 50 states, plus Puerto Rico, Canada, China, Mexico, Brazil, Germany, United Kingdom, Argentina, and South Korea. Wal-Mart’s current operating numbers are:
Wal-Mart Stores 1,736
SAM’s Clubs 475
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...mount of inconvenience, Wal-Mart should implement more entrances and exits into different departments, such as the Garden department and the Grocery department, with signage that easily identifies what part of the store the entrances are leading too.
Moving from the retail level to business relationships, Wal-Mart has extensive opportunities to expand on its distinctive competency of its distribution system. The company has strategically placed distribution centers all over the US close to its stores. This not only makes for an excellent venue to supply Wal-Marts, but other companies’ stores as well. Wal-Mart Inc. can be a competitive distributor that would service companies not in direct competition with Wal-Mart. A study should be conducted to find out which industry should be targeted for this type of venture. This is a low risk high return venture because Wal-Mart would be using facilities that the company already owns, and expansion of these facilities is already in the making. In addition, Wal-Mart has already been successful in distribution with its offspring grocery store distributor “McLean”. McLean services not only Wal-Marts, but convenience stores as well.
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