An overview of Walmart
- Case summary and facts and figures
- Discount stores
- Super center
- Neighborhood market
- Value created by Wal-Mart
- Implications to Competition
- The 1 trillion target of Walmart
- Walton's projection
- Wal-Mart's practice of cross pollination
- Wal-Mart's success in the United States
- SWOT analysis of Wal-Mart
Wal-Mart Stores, Inc. is the American corporation that operates discount department stores. In terms of revenue it happens to be the world's largest public corporation and the evaluation was made by 2008 Fortune Global 500. It was started by Sam Walton in 1962, and incorporated on October 31, 1969. In 1972 it got a position on the New York Stock Exchange. It is the single largest private employer in the U.S. along with which it is the largest grocery retailer holding an estimated 20% market share of the retail grocery and consumables business. It is also the owner and operator of the North American company, Sam's Club.
Every day Low Price concept, (EDLP), prices are 20% to 30% less than competitors.
Required additional sales of $37 Billion each year to maintain the growth rate of 17%.
To have 17% growth in next 10 years, it should achieve a sales of $1080 Billion (1 Trillion), another $862 Billion; $758 from domestic operation and $322 Billion from International operation.
Out of total sales of $218 Billion, 4140 Billion was from Retail Division (over $62 Billion from Super center, and $60 Billion from Discount stores), $29 Billion from Sam's club, and $35 Billion from International operation.
[...] Walmart Super centers fully penetrated only approximately 24% of US States and 30% of top 250 markets in US. Approximately 34% of 50 states and 37% of top 250 markets remained under penetrated. This presented room for growth and was expected to have a full penetration of 75%. Neighborhood Market: Credit goes to Lee Scott. A traditional Supermarket plus Drug store, i.e. Walmart Neighborhood Market, was introduced to provide grocery coverage in areas too small for a Super center, and a more convenient alternative to Super center and thus targeting that business, which were not getting purely because the Super center may not be as close to customer or convenient for small shopping trips. [...]
[...] Wal-Mart can control the Convenience-type market through the implementation of the Neighborhood Market concept. Wal-Mart can continue it's domestically and international expansion. Threats: Jobs being shipped overseas Competition E-commerce: Unfamiliarity with the new web based business may put Wal- Mart at disadvantages with its competitors. Environmental Interest Groups: Expansions often entail building new stores in uninhabited areas. Economic Climate: As the stock markets and interest rates fluctuate so do sales revenues. Market Demographics While Wal-Mart seems unstoppable, there are a few red flags. [...]
[...] Households have an average of 2.4 members and the average age was 35. It had an unemployment rate that was slightly lower than the national average and had been below for over 6 years. During 1990s, as a result of a surge in business investment in the region, Springfield experienced a 28% total increase in the workforce, which nearly doubled the national average. Cost of living was almost 10 points below the national average in 2001, with utility cost and property taxes at much lower rates than those of other parts of the country. [...]