Wal Mart Stores example essay topic

Many advise against the coming of a Wal-Mart to their town, arguing that it will only bring negative consequences to the economy, but most of their pleas to stop Wal-Mart are thoughtless. On the contrary, Wal-Mart is a positive force sweeping through the United States generating town growth, new jobs, customer traffic and increased tax revenues. Wal-Mart is great for the economy in that it brings competition to other competitors and it drives out the weak businesses that were only hindering the growth of their local economy. Wal-Mart is an effective catalyst for change. Wal-Mart is successful not only because it makes sound economic and strategic management decisions, but also for its innovative implementation of those strategic decisions. Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees, and the community.

Walton's greatest accomplishment was his ability to empower, enrich, and train his employees (Longo, 1999). He believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. At each of the Wal-Mart stores, signs are displayed which read, Our People Make the Difference. The key features of Wal-Marts approach to implementing the economic strategy put together by Sam Walton emphasizes building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieve economies of scale, which reduces its costs of sales.

With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level. A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competitors do.

Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement, which keeps it abreast of fast changes in the market (Daugherty, 2000). Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. Trends indicate that operating expenses have been growing at a rate of 27.7% in recent years. Wal-Mart has also benefited greatly from the prospering economy along with many other businesses. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses.

Wal-Mart has seen a number of recent developments go its way. A Supreme Court decision on trademarks, for example, makes it harder for clothing manufacturers to prove that their products are distinctive enough to deserve protection. This helps discount merchandisers by making it easier for them to copy garments overseas at lower cost. Meanwhile, the company continues to follow what McClain calls its simple strategy: Just keep building, keep growing, and steamroll the competition. McClain, who attended Wal-Mart executives recent presentation at a Grocery Manufacturers of America conference, said that in grocery, the company is moving toward reusable plastic containers to ship and display produce and is moving aggressively forward on a case-ready meat program. Consistent with its philosophy that offering a wide range of products and services draws in more customers, Wal-Mart also harbors an interest in banking services.

Congress passed a law late last year barring some companies from entering the banking business if they applied to do so after May 4, 1999. Many observers felt this was aimed at Wal-Mart and its history of putting small businesses out of business. In terms of marketing directly to consumers, the company seems to perceive the Internet as both a separate market and a conduit for increased store sales. (Customers look at the Web site, and then buy the product in a store.) The company recently hired Jeanne Jackson from Banana Republic to run Wal-Mart. com. We need to get our share, we will get our share of that business, Jackson told the annual shareholders meeting.

Wal-Marts future will depend on how well the company manages its expansion plans. For the coming years, the company will need to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operating expenses. The Success of Wal-Mart started out and will continue to depend on three simple policies 1. Customer value and service; 2.

Partnership with its associates; 3. Community involvement. Success in the next decade will depend on the level of understanding retailers have about customer expectations, and needs of the customer. Given as how they stay one-step ahead of the competition by using technology and being customer driven it is safe to say that Wal-Mart will be the leading retail industry leader for an extremely long time.