Wal Mart Stores example essay topic

Wal-Mart has become an American icon in a very short period of time. When you think of the companies at the cornerstone of American heritage, Wal-Mart is one of the first that comes to mind. They have grown drastically in a relatively short period of time, when compared to other companies their size, and have clearly defined themselves as an industry leader. They have achieved this status in many ways.

The growth strategies they have set forth for themselves have involved the implementation of cutting edge technologies and investments in the international marketplace. The rapid growth of Wal-Mart has brought many changes to the company. Here are just a few: 1962 First Wal-Mart store opened in Rogers, Ark. 1969 Company incorporated as Wal-Mart Stores, Inc. on Oct. 31.1970 First distribution center opens. 1979 First company to reach $1 billion in sales in the shortest time 1980 Largest distribution center opened in Palestine, Texas 1987 Wal-Mart Satellite Network completed linking all stores, distribution centers, and General Office with voice, data, and video communication. 1988 First Supercenter opened 1991 International market entered for the first time.

1997 Wal-Mart has first $100 billion sales year (Wal-Mart Timeline) This great success could not have been achieved without a great deal of forethought and planning. The failure to have a distribution center ready on time or the electronic infrastructure in place to handle the increasing customer demands would have slowed their progress. Sam and Bud Walton regularly made visits to their stores to perform on the spot inspections. These visits would assure that the customer's needs were being met and that the desired level of quality was maintained. Shortly after Wal-Mart's incorporation, a plane was purchased and a pilot hired to transport the Walton's from city to city for their spot visits.

This dedication to quality control has gone a long way over the years to build their reputation and bring customers back again and again. Having recognized the importance of planning ahead, Wal-Mart set up a Strategic Planning and Finance Committee to develop, assist, assess and evaluate the planning process and strategic objectives. This committee stays current on the company's financial status and capital structure and makes recommendations based on their information. The also assist in setting up basic financial goals for the company. Sam Walton was a born leader who, along with his brother Bud, started with a single discount store in a rural Arkansas town and built a multi-billion dollar empire. Here are "Sam's Rules for Building a Business" from his 1992 book Made in America.

Rule 1 Commit to your business. Believe in it more than anybody else. Rule 2 Share your profits with all your Associates, and treat them as partners. Rule 3 Motivate your partners. Money and ownership alone aren't enough.

Rule 4 Communicate everything you possibly can to your partners. Rule 5 Appreciate everything your Associates do for the business. Rule 6 Celebrate your successes. Find some humor in your failures. Don't take yourself so seriously.

Rule 7 Listen to everyone in your company. And figure out ways to get them talking. Rule 8 Exceed your customers' expectations. If you do, they " ll come back over and over.

Give them what they want - and a little more. Rule 9 Control your expenses better than your competition. This is where you can always find the competitive advantage. Rule 10 Swim upstream. Go the other way.

Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction. With the increased demand for one-stop shopping Wal-Mart will continue its trend toward the "supercenter" in the foreseeable future. The majority of new stores to be constructed will be of this type, supplying everything from food, to clothes, to auto parts.

Expansion into foreign markets is also at the top of the company's strategic plan with 120 stores to open outside the US in 2003. Despite the recent focus on international expansion, this is not a new idea for Wal-Mart. Since 1991 Wal-Mart has made significant inroads into the global market. Today they operate 1,300 stores in 9 countries and employ over 303,000 individuals, it is the only company with more employees than the US Federal Government.

Future plans include further expansion in Canada, South America, Asia, and Europe. Many of the existing international locations were department store chains that Wal-Mart has bought out. Two years after entering the international market Wal-Mart International division was formed to oversee all operations outside the United States. Today they have a plan in place that will open over one hundred stores per year in foreign markets. In order to keep costs down and the profit margin up, Wal-Mart exports a great deal from these countries also. They have come under fire from unions in the US in recent years for their use of third world suppliers.

Many employees working for these companies in Asia work as much as 120 hours per week during the busiest seasons and are paid poorly even by local standards. Wal-Mart operates these stores with the same goals and objectives that make them successful in the US. At the same time they adapt to the country or area they are in. "When the "Buy Canadian" campaign took hold in Canada in 1994 Wal-Mart switched gears and lined up many Canadian vendors.

Today over 80% of the stock in these stores is made in Canada". (Wal-Mart Internal Operations) Wal-Mart plans for the future by taking risks and staying ahead in today's hi-tech world. Wal-Mart's CEO defines innovation "through a willingness to experiment" (Pelton, 1998). The company strives to stay ahead in this rapidly changing era.

Wal-Mart implements technologically advanced ideas, such as electronic shelf labels or customer self-checkout centers, without much investigation or waste of employee time, as long as Wal-Mart can afford the new concept. Wal-Mart makes sure that it is organized in every way possible to meet the customers' needs. Not only is the store orderly and organized, but Wal-Mart has taken the word "organization" one step farther. Small children have been lost or even abducted from large stores. Code Adam was first created by Wal-Mart in 1993. Technology has made it possible for the store to make an announcement over the PA system if a child is reported missing.

Specially trained employees, familiar with the "Code Adam" system, then search for the child and some monitor all store exits. If the child is not found, the police are called. Wal-Mart is an active leader that controls its future in one way by actively sharing information with its vendors. Wal-Mart and Lucent Technologies have been involved in an "interactive forecasting and replenishment event calendar" to help manage supplies.

"Prior to implementing technology which enabled the sharing of information with vendors, we weren't letting the customers tell us what they wanted", said Bob Martin, CEO of Wal-Mart. This interactive effort allows the two companies to share marketing information, levels of inventory, the launching of new products, history of sales, and changes in prices. Wal-Mart conducted a reputation research to find out consumers' needs to better plan for the future. In 2002, the company began this survey to better understand how consumers feel about Wal-Mart. Wal-Mart is now responding to the opinions and concerns that were identified in their research. For example, Wal-Mart's marketing groups are developing programs to the communities that highlight job opportunities, the company's real-estate group is considering how to give local government leaders more influence and input in the design and location of the stores.

Wal-Mart has an extensive Internet web site that has a great deal to offer. Customers are able to submit their questions to various departments and receive feedback. Customers are also able to locate a store near them or request that a store be built in a certain location. Wal-Mart's site was created with a separate management team that ensures all information is kept accurate and up-to-date. The web site is very helpful to customers and asks for customer input in multiple areas. Wal-Mart is known for its innovation and support of new ideas.

Innovation is one of Sam's rules which states to swim upstream and find a new way to do something. One of their objectives during the planning stage is to look for new innovative opportunities. At the organizing stage Wal-Mart decided to join forces with the Center for Business and Economic Development at Southwest Missouri State University to create the Wal-Mart Innovation Network, (WIN). Through leading, Wal-Mart encourages new inventors to submit product ideas. At the controlling stage, WIN evaluates the new product and assesses its marketability compared to other similar products. Feedback is then given to the inventor including if WIN will recommend the product for Wal-Mart to review.

Diversity is reflected in many ways at Wal-Mart from their staff to the products that are in their stores. Staying with their goal to be #1 retail store, they planned to compete with grocery stores and membership warehouses like Costco. In order to compete with these companies, Wal-Mart implemented new departments to support their new grocery superstores and Sam's Clubs in the organizing stage. In supporting the company culture at the leading stage, they also encourage feedback from employees through annual Grass Roots surveys, where employees can speak up about their concerns and issues. Wal-Mart is also quick to gain feedback from customers through small scale questionnaires. At the controlling stage Wal-Mart has set new standards pertaining to their diverse workforce.

In July 2003, they implemented a new program that protects all employees within their workforce, regardless of race, gender or sexual orientation. New training programs have been created to educate all employees to be sensitive with regards to their co-workers lifestyles. Ethics is also a driving force for Wal-Mart. One of Wal-Mart's goals is to maintain its procedures with its suppliers. In support of that objective, Wal-Mart created policies in the planning stage where suppliers would need to implement the Wal-Mart software to control inventory.

Wei Gu, a reporter for Reuters states, "Wal-Mart's suppliers are scrambling to purchase software to do business with the world's largest company, which is moving from a maze of private networks to an Internet-based system". With concerns arising about Wal-Mart and its International practices, a new department was established to constantly monitor their International manufacturing processes at the organizing stage and supported at the controlling stage. This is to ensure that children are not used for labor and to stop any other illegal activities performed by foreign manufacturing units. Leading is accomplished by managing conflict by implementing the open-door policy and establishing an ethics hotline.

This allows employees to report any issues or concerns that may need to be resolved with management or peers. Clearly, Wal-Mart has demonstrated precisely what it takes to succeed in today's world. They have been innovative, aggressive, and organized. They develop clear strategies and more importantly, make plans to assist management in implementing these new developments. It is for these reasons that Wal-Mart has climbed to the number one spot on the Fortune 500 list, a task not easily accomplished. In fact, the other top ten companies on the list had at least a forty year head-start on Wal-Mart!

If Wal-Mart can continue to plan out and implement the strategic goals they have set forth for themselves, there is no reason that they will not retain the number one spot for years to come. Wal-Mart Timeline Retrieved September 8, 2003, from: web Walton, Sam. Made in America. 1992, Wal-Mart International Operations Retrieved September 8, 2003, from: web Pelton, Charles. LEADERSHIP AND INNOVATION BY EXAMPLE. InformationWeek, 09/14/98, Issue 700, Academic Search Premier through Ebscohost.

Gu, Wei. (2003). Corrected-Feature - Wal-Mart speaks, suppliers listen. Reuters. Retrieved September 8, 2003, from: http// web.