Wal-Mart Stores Inc.

Wal-Mart Stores, Inc.

EXECUTIVE SUMMARY

Wal-Mart Stores Inc. is the world’s largest retail company in terms of sales. By 2005, it was the market leader among supermarkets in the US and was the largest private sector employer in the world. Wal-Mart strategy is to dominate the retail market industry and to expand their business worldwide. By selling products at low costs, more customers preferred shopping at Wal-Mart Stores. They utilized their powerful supply chain and logistics technology to make their products more available to consumers.  Also, by not relying on just one vendor or supplier, they further made the most of the efficiency of their supply chain. They implemented internal trucking services and satellite communication network to have a fast and reliable information sharing and distribution system of their store branches.  The system consolidated orders for goods enable the company to buy large quantities of goods without incurring inventory costs.

Wal-Mart also uses the “saturation” strategy for store expansion. By setting up distribution centers in strategic places, Wal-Mart made sure that their store branches within the area will have no problem with stocks. They also did not focus only on large towns; they made sure that discount stores were also present in small rural towns.

To further support their strategies, Wal-Mart implemented management systems within their organization. First, they worked on improving their customer service. Wal-Mart added people greeters and implemented their 10-foot attitude policy that is focused in giving customers the best possible service in a retail store. Together with their low price points, good customer reception will make sure that customers have a good shopping experience and will strengthen their customer’s loyalty.

In order for Wal-Mart to grow and expand, the company encourages their employees specially the department managers to perform at their best. Utilizing their high-end communication network, sales data are monitored in real-time allowing them to react faster on how to manage their branches. They also used “Best Ledger Yesterday” scheme wherein their current numbers are compared to their performance from the previous years. Incentive bonuses and pay raise are provided based on performance and by making all store an investment center, they were assessed based on the profits relative to their inventory investments.  By sharing the company’s profit with the employees based on their performance, people are encouraged to perform aligned with the company’s strategies.

Wal-Mart is committed to improving operations, lowering costs and improving customer service in order to dominate the retail market industry and continuously expand their business. Their strategies are all utilizing their high-end logistics, distribution, transportation, and technology. Their business model would fail instantly without one of those factors. Motivating and empowering their employees will make sure that their strategies will be implemented properly.

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