About Wal-Mart

On 2 July 1962, in Rodgers Ark, Sam Walton created the first Walmart store. At any time and anywhere Sam believed in the lowest prices which formed the unwavering foundation for retail development strategy. He was influenced by Walton’s 5 & 10 success, which was a great store he opened in 1950 (Walmart 2017). In the 1970s, Wal-Mart registered tremendous growth as Sam made a national effort to build a vision of a large appeal driven by real leadership that relies on quality service from an individual. It became the largest American retailing company in the 1990s and was made public as its low price policy was international every day. It went global as result of the joint venture it formed with a Mexican Retail company known as Cifra, acquired ASDA to enter the United Kingdom, and opened more stores in China and England. In the new millennium of the 2000s, Wal-Mart has been dedicated to offering its customers with a seamless shopping experience and has acquired more companies to ensure global expansion. The current Chairman is Greg Penner who took over from Rob Walton (Walmart 2017).

Sam started Wal-Mart as a sole proprietorship and through his inspirations to bring new technologies and approaches in the retail, high commitment to providing better services and value to customers, enhanced growth in the number of stores (Walmart 2017). Hence, Wal-Mart is now a multinational corporation that is globally recognized. The benefits of a corporation to the business are as follows. First, the owners of the company enjoy the limited liability, and the ownership is transferable. Secondly, there is continuous existence and assurance of a separate legal entity. Thirdly, it becomes simpler to raise the required capital and enjoying the tax advantage as it tends to be minimal for an incorporated business.

Stakeholders

Wal-Mart’s major stakeholders include investors, customers, employees, suppliers, and stockholders. Investors focus on the minimization of the operational costs a strategy towards profit maximization. They also provide a stable financial future for the company which results in a tremendous capital growth. Also, they bring additional expertise and funding to the organization. Customers play a significant role in enhancing Wal-Mart’s survival and success through their purchase decisions. They provide useful feedback regarding the quality of the products and general shopping experience (Hayden et al., 2002).

Employees help in strengthening the corporate governance systems. They carry out specified tasks and responsibilities as per the organization’s strategic plans. Employees contribute towards better performance of a company. The suppliers help the company to fulfill their customers’ orders promptly by providing the required components at reasonable prices. They also introduce new and better solutions to the retail firm which improves efficiency and productivity which in turn leads to increase in the profit margins. The stockholders’ role include provision of capital needed for the company’s growth and expansion, set the strategic direction and guide the management.

Company goals and objectives

The vision of Walmart includes becoming the best retailer in the minds and hearts of the consumers as well as employees. The mission statement involves saving the people’s money so that they can live better lives.

The goals and objectives of Walmart are discussed as follows. Firstly, it aims at expanding the multi-channel initiatives through a global e-commerce strategy and having convenient stores that meet their customers’ needs. It has achieved it through the use of new formats such as the Wal-Mart Express, leveraging the multinational corporations and creation of analytical tools to deepen the understanding of their customers. Secondly, Wal-Mart focuses on improving the returns through the four-point plan, balancing its commitment to the aggressive returns and enhancing the shareholder value. It has attained it by opening new supercenters in regions like Canada, the addition of exciting brands, integration of the promotion tools and attracting more customers to Sam’s Club members. The third objective includes enhancing growth in the United States by maintaining excellent customer service as well as implementing the productivity initiatives. Additionally, Wal-Mart aims at making the quality healthcare to be more affordable and accessible to both employees and consumers.

SWOT Analysis

Strengths

It is the largest retailer worldwide with a global brand image recognition. This strength enables it to have an unmatched scale of operations as well as a strong market power over its competitors and suppliers. It is as a result of experienced over 70 years in the retail industry. It provides products at affordable prices which enhance the value for money and convenience. Another strength includes adaptability through the ability to diversify from the large super centers to the local, and the mall-based sites as a strategy to serve the customers’ needs.

Weaknesses

There is high employee turnover due to lack of the employee loyalty. It is due to the minimum wage give or failure to provide other compensation benefits as well as the motivation strategy. Wal-Mart also has an adverse publicity that results from the criticism on the poor working conditions and bribery and corruption among the authorities. Additionally, it has little differentiation as it still has same products.

Opportunities

There is an opportunity for global growth as it can enter into the new markets in Europe and China to enhance expansion. Wal-Mart can also improve the online shopping store to allow shoppers to purchase products at their convenient time and place. The increased demand for the organic and healthy foods can give a better avenue for the corporation to explore as well as grow their global presence.

Threats

It faces political problems that arise in countries where it operates as well as other international trade barriers. The intense price competition is a great threat which forces it to have a shift of its production overseas as a way to maintain low production costs that result to low pricing. Individuals or small sellers may bypass the website of Wal-Mart and start selling their products to Wal-Mart’s online customers.

Risks

Sam Walton took the market risk which is a risk that a value of an investment shall decrease as a result of changes in the market factors. He focused on offering lower prices to customers and was not worried about the economic recessions, changes in the interest rates, political turmoil, terrorist attacks, political unrest and the natural disasters. The owner wanted to see a rapid growth through the attraction of more customers through the low-cost strategy.

The board and management overcame the market risk through diversification of the product portfolio and regular incorporation of new product developments through licensing or sourcing from other partners. Furthermore, they have been maximizing their strength of low-cost production to ensure that they offer low prices on the products as well as added value. In protecting the market share, they have increased the customer loyalty program and formed many strategic alliances with the suppliers of the essential raw materials and components. They also identify weaknesses and later prioritize the action plans to overcome the greatest risk. They are preventing the market risk by diversifying worldwide which help in stabilizing the company’s revenue and investing on the long-term.

Marketing and distribution

Marketing

Product: The products offered by Wal-Mart include family apparel, health and beauty aids, automotive products, home furnishings, hardware, electronics, sporting goods, toys, lawn and garden items, jewelry, pet supplies and housewares. They attract more customers through the provision of efficient and convenient services. The product component affects Wal-Mart through defining the client’s experience.

Price: It uses the Everyday Low Price strategy to attract a larger population of its target audience and supports its generic strategy of cost leadership. Price is the primary contributor towards Wal-Mart’s competitiveness.

Place: Wal-Mart utilizes the intensive distribution channel design whereby it offers the same range of products and continues to open up new stores as a way to reach the target market. Its store operations include the discount stores, neighborhood markets, supercenters and express stores. Thus the place component helps in ensuring convenient shopping through proper location.

Promotion: It uses the in-store promotional activities that involve the sales promotions in the form of discounts and special deals through the product bundling and the low pricing strategies. The company may advertise on the websites or newspapers. Additionally, the sales personnel always persuade customers to buy their goods and services and use the press releases as a tool of public relations.

Their brand loyalty is based upon servant leadership which is the core brand character by helping their customers to lower the costs of living. They help their shoppers to live better by delivering low prices on the trusted brands in a fast and easy one-stop shopping experience.

Distribution

Walmart uses the one-store-at-a-time, just-in-time and the radio frequency identification (RFID) distribution approach. The design is an intensive strategy, and it continues to open up new stores using the saturation for the store expansion (Hayden et al., 2002).

Stocks

Walmart offers common stock which is an ideal investment that yields huge gains, its buying and selling process is easy, and the benefits may be capital gains or dividends.

Stock pricing and effects

The list of the stock price has been provided in Appendix 1. The highest value was $ 75.7663 on 27th April 2017, and the lowest value was $ 65.28 on 27th January 2017. The reasons for the low values include higher gas prices, inclement weather, slide in the bank stocks, changes in the web shopping, global growth issues and the minimum wage hike that increase the overall costs. The high-value pricing results from a high growth rate regarding the US economy and the low unemployment records.

Advantages and disadvantages of investing in Walmart

The first benefit includes its stability and the brand name. As it is the largest retailer that has been operating for an extended period one can be sure of what to get since it is a powerhouse that is slow but steady. Secondly, it gives the intellectual capital management through the dividends and reinvestment (Marcilla, 2014). Thirdly, the continuous and focused efforts towards innovation shall lead to higher growth and addition of value to the holders. Lastly, global diversification strategies of Wal-Mart can help an investor to realize a rise in international revenues and profits.

The disadvantages include consumer spending habits tend to face some headwinds that result to drop in sales. Walmart also has a controversy regarding the low wage pay, Mexico bribery investigations and much more which makes an investor fear that the next scandal may lead to low returns. Moreover, it faces opposition as it tries to expand into various cities within the US and overseas.

References

Walmart. (2017). Our History. Retrieved on 26th April 2017 fromhttp://corporate.walmart.com/our-story/our-history

Marcilla, L.B. (2014). Business analysis for Wal-Mart, a grocery retail chain, and improvementproposals. Retrieved on 26th April 2017 from

https://riunet.upv.es/bitstream/handle/10251/44289/Business%20analysis%20for%20Walmart%20FINAL%20TFC%20Laura%20Barber%C3%A1%20Marcilla.pdf?sequence=1

Hayden, P., Lee, S, McMahon, K. & Pereira, M. (2002). Wal-Mart: Staying on Top of theFortune 500: A Case Study on Wal-Mart Stores Inc.

http://mike-pereira.com/subpage/docs/Wal-Mart-CaseStudy.pdf

Appendix 1

Wal-Mart stock prices from 3rd Jan to 26th April 2017

Date

Open

High

Low

Close / Last

Volume

04/26/2017

75.27

75.7663

75.17

75.43

6,94 8,200

04/25/2017

74.97

75.17

74.86

75.05

5,720,035

04/24/2017

75.08

75.4

74.42

74.78

7,808,235

04/21/2017

74.74

75.11

74.6

74.94

5,753,531

04/20/2017

74.14

75.11

74.11

74.8

7,680,946

04/19/2017

74.1

74.38

73.86

74.07

5,938,126

04/18/2017

73.54

74.1

73.48

73.89

6,627,897

04/17/2017

73.16

73.58

73.15

73.49

5,465,288

04/13/2017

73.37

73.655

73.15

73.15

5,331,537

04/12/2017

73.55

73.83

73.25

73.44

6,626,783

04/11/2017

73

73.45

72.93

73.43

5,810,150

04/10/2017

72.99

73.48

72.73

73.06

7,492,602

04/07/2017

72.1

72.99

71.8

72.9

10,766,810

04/06/2017

71.7

72.1

71.38

71.43

5,940,227

04/05/2017

71.64

72.31

71.555

71.65

6,348,567

04/04/2017

71.74

72.06

71.532

72.01

5,566,309

04/03/2017

72.08

72.53

71.78

71.83

8,291,279

03/31/2017

71.32

72.56

71.23

72.08

9,939,073

03/30/2017

70.69

71.72

70.64

71.59

8,139,458

03/29/2017

70.35

71.18

70.31

70.74

6,990,734

03/28/2017

69.33

70.37

69.33

70.32

7,252,185

03/27/2017

69.52

70.07

69.36

69.66

5,784,535

03/24/2017

69.99

70.17

69.5274

69.61

5,858,964

03/23/2017

70.2

70.31

69.745

69.86

6,894,162

03/22/2017

70.03

70.34

69.72

70.25

6,453,139

03/21/2017

70.17

70.4

69.69

69.9

8,747,665

03/20/2017

70.14

70.45

69.71

69.98

7,466,176

03/17/2017

70.58

70.7501

69.81

69.89

14,066,630

03/16/2017

70.11

70.7

70.07

70.44

7,008,308

03/15/2017

70.5

70.7

70.02

70.58

8,809,254

03/14/2017

70.82

71.205

70.72

70.72

9,957,410

03/13/2017

69.99

70.45

69.71

69.95

6,680,740

03/10/2017

70

70.365

69.8

70.1

7,095,817

03/09/2017

69.75

70.04

69.56

69.86

7,563,924

03/08/2017

69.69

70.03

69.54

69.8

7,979,661

03/07/2017

69.9

70.21

69.86

69.87

7,282,422

03/06/2017

70

70.435

69.78

69.88

9,180,939

03/03/2017

70.81

71.02

69.88

70.03

9,300,083

03/02/2017

70.42

70.9

70.17

70.76

8,913,196

03/01/2017

70.97

71.08

70.15

70.45

13,510,500

02/28/2017

70.87

71

70

70.93

15,952,180

02/27/2017

72.28

72.42

71.525

71.74

9,254,166

02/24/2017

71.34

72.8

71.3

72.39

13,881,260

02/23/2017

72

72.5

71.16

71.31

12,797,260

02/22/2017

72.25

72.37

71.48

71.71

15,223,310

02/21/2017

71.21

72.28

70.7

71.45

22,410,080

02/17/2017

68.83

69.785

68.695

69.37

12,834,380

02/16/2017

68.67

69.24

68.61

68.87

8,413,479

02/15/2017

67.76

68.71

67.76

68.69

8,562,469

02/14/2017

67.88

68.68

67.71

68.66

8,459,979

02/13/2017

68.32

68.65

67.56

67.77

8,341,309

02/10/2017

68.25

68.6

67.76

68.02

12,445,240

02/09/2017

67.8

69.14

67.75

69.08

11,080,180

02/08/2017

66.89

67.82

66.89

67.81

7,660,151

02/07/2017

66.56

67

66.51

66.89

5,805,718

02/06/2017

66.37

66.865

66.37

66.4

9,096,675

02/03/2017

66.82

66.93

66.445

66.5

7,608,585

02/02/2017

66.34

67.14

66.34

66.7

8,998,553

02/01/2017

66.46

66.7139

66.04

66.23

9,046,880

01/31/2017

66.21

66.89

65.88

66.74

9,318,373

01/30/2017

65.63

66.48

65.63

66.42

8,634,976

01/27/2017

66.86

66.97

65.28

65.66

13,433,100

01/26/2017

67.13

67.2239

66.62

66.73

6,497,662

01/25/2017

67.52

67.73

66.79

66.89

8,692,769

01/24/2017

66.89

67.41

66.66

67.4

10,399,190

01/23/2017

67.01

67.1799

66.56

66.65

7,932,137

01/20/2017

67.74

67.83

67.02

67.18

11,743,210

01/19/2017

68.13

68.19

67.48

67.62

6,780,482

01/18/2017

67.88

68.11

67.54

68.11

7,319,761

01/17/2017

68.09

69.29

68.06

68.42

13,160,290

01/13/2017

67.98

68.02

67.08

67.13

9,997,634

01/12/2017

68.36

68.56

67.92

67.97

6,543,356

01/11/2017

68.2

68.62

68.19

68.53

6,683,598

01/10/2017

68.64

69.27

68.22

68.23

10,241,040

01/09/2017

68.33

68.8

68.32

68.71

8,667,928

01/06/2017

68.41

68.5

68.01

68.26

9,481,175

01/05/2017

68.43

69.33

68.12

69.21

7,099,041

01/04/2017

68.66

69.63

68.6

69.06

7,897,318

01/03/2017

69.24

69.24

68.05

68.66

10,467,720

Source: http://www.nasdaq.com/symbol/wmt/historical#/ixzz4fQav7XfY