Research Topics: Wal-Mart Corporation

INTERNATIONAL BUSINESS (WAL-MART STORES, INC.)

INTERNATIONAL BUSINESS (WAL-MART STORES, INC.)             Wal-mart Stores, Inc., (since 2008 commonly known as Wal-Mart), ranks  eighteenth among public corporations in the world and the largest if revenue-based.  It is a multinational public corporation based in the United States. It is comprised of large chains of discount warehouse and department stores. It is also the United States biggest grocery retailer that produced more than half of the more than two hundred fifty billion dollar sales in 2009 from its business dealing with grocery products.             In 1962, Sam Walton established the company and by 1972, it was traded in the New York Stock Exchange publicly. Within five years of its launching, the company grew to twenty-four stores in the state of Arkansas registering more than twelve million dollar in revenue. The first stores launched outside Arkansas were in Oklahoma and Missouri in 1968.             It grew rapidly and in its twenty-fifty year, the satellite network of the company was completed and launched. It enabled all the company’s operational divisions to be linked to its headquarters in Bertonville through a video communication and  a data and voice transmission.  It also enabled the headquarter office to immediately communicate to its spread out units and to track its sales record as well as its inventory record.             Wal-Mart Supercenter was launched in 1988 in Missouri. When it opened, its toy sales surpassed Toys “R” Us. It also started its international expansion. South American expansion started in 1995 in Brazil and Argentina. By 1999, it entered Europe by buying for ten billion dollars the company Asda of the United Kingdom.             Wal-Mart established in 1998 the “Neighborhood Market” theme in Arkansas. A Neighborhood Market concept is a chain of small grocery stores that intends to capture target market by providing parking spaces, bigger store aisles and a speedier checkout counter along with a diverse selection of grocery products.  An estimated twenty percent of retail consumable business was said to be controlled by Wal-Mart when the year 2005 rolled in.             By the year 2002, Wal-Mart was recorded by Fortune 500 as the United States’ biggest corporation with 6.7 billion dollar profits from a 219.8 billion dollar revenue. It occupied the position except for the year 2006. In 2005, Wal-Mart registered sales of 312.4 billion dollars with less than four thousand stores in the American shores and less than three thousand stores in its international market with more than 1.6 million employees worldwide.                According to Lee Scott, Walmart’s CEO, [i]to be a “good steward for the environment” is one of the primary goal of Wal-Mart. They made known to the public in 2005 that they would put into practice measures to promote energy efficiency. Their primary aim was to enhance their fleet of truck’s fuel efficiency by twenty-five percent in a three-year period, and fifty percent upon reaching its tenth year.  They also aim to decrease by twenty percent in seven years emissions of greenhouse gas, and reduce solid wastes and used energy in their stores by thirty percent.   They  plan to utilize energy from sources that are renewable and to create zero waste.  In their experimental stores in Nevada, Colorado, and Texas, the designs of the stores were such that they were able to use photovoltaic solar panels (utilizes semiconductors to transfer solar radiation to produce direct current electricity), water-cooled refrigerators, wind turbines, biofuel-capable boilers, and xeriscape gardens (minimizes or removes the need for water). Aside from the above environmental measures, Wal-Mart was also lauded with being the  largest purchaser of organic cotton and largest retailer of organic milk worldwide. They were also given recognition through their efforts to trim down packaging and diminish costs of energy. They recently formed  Texas Retail Energy, Walmart’s electric company, to enable them to provide cheap power to their various stores. They might even sell their electricity power to consumers. A fifteen million dollar annual savings is expected to be generated by the creation of Walmart’s own electric company. Starting 2006, they started targeting the more affluent market. They launched their Supercenter store to attract the class A and B consumers. The store has wider aisles, deli shops with free Wi-Fi access, floors are constructed of wood, and their products  are of the more expensive brands.  Today,  it operates in fifteen countries under different names. It has more than eight thousand stores worldwide. For example, it is known as Seiyu in Japan; in Mexico, Walmex; in the United Kingdom, Asda; and in India, Best Price.               		 		 		 		[i] En.wikipedia.org Credit:ivythesis.typepad.com

INTERNATIONAL BUSINESS (WAL-MART STORES, INC.)

INTERNATIONAL BUSINESS (WAL-MART STORES, INC.) Wal-mart Stores, Inc., (since 2008 commonly known as Wal-Mart), ranks eight...

Case Study on the Market Environment of Wal-Mart

THE MARKET ENVIRONMENT OF WAL-MART   	TABLE OF CONTENTS 	  	  Title 	page       …………………………………………………………………        1   Table of 	Contents …………………………………………………………           2   	Introduction …………………………………………………………………          3   Background 	of Wal-Mart ……………………………………………………         4   SLEPT and 	SWOT Analysis ………………………………………………         6   Competitor 	Analysis            …………………………………………………………        8   	Conclusions …………………………………………………………………        9   	Recommendations …………………………………………………………         10   References 	…………………………………………………………………          11   	INTRODUCTION 	  	There are many aspects of the market that 	must be taken into consideration in order to look into the possible effects 	of these market aspects in the possible success or failure of an 	organization. An illustration of this is the market environment. The 	contemplation on the behavior of the market environment is considered a 	maxim by firms. The business press is gorged with stories of firms that are 	successful because they are flexible in responding to the changes that 	buffet them. Marketing researchers coined the term “market orientation” to 	throw more light on the nexus between a firm and its environment, and their 	findings added empirical evidence to the truism mentioned above. However, 	much of the work on market orientation has examined this phenomenon in 	manufacturing contexts, and most studies seem to be to relate the magnitude 	of a firm’s market orientation to performance. It is possible that firms, 	facing the repeatedly incompatible demands from stakeholders, may emphasize 	one aspect of market orientation more than others. 	This paper shall be discussing the market 	of environment of Wal-Mart by analyzing its background using its annual 	report and by examining of the external environment of the company using the 	PESTLE analysis. The study will also provide a competitor analysis in order 	to look into the threats posed by its closest contender in the industry. It 	will then be followed by a SWOT analysis of the Wal-Mart in order to uncover 	the strengths and weaknesses of the company. The researcher will 	consequently provide sound conclusion and pertinent recommendation based on 	the entire data presented in this study.   	BACKGROUND OF WAL-MART 	The company is among the largest in the United States 	operating more or less 1,568 discount stores, 1,258 supercenters, 525 SAM’s 	CLUBs and 49 neighborhood markets as of January 31, 2003. 	 	It 	identifies those segments based on management responsibility within the 	United States and geographically for all international units. The Company’s 	mass merchandising operations serve its customers primarily through the 	operation of three segments. Discount stores, Supercenters and Neighborhood 	Markets in the United States are among the Wal-Mart Stores segments. 	Moreover, a segment including the warehouse membership clubs in the United 	States is named the SAM’s CLUB. 	The company’s net income acquired a 6.0% increase over 	the aggregate net income of the company in the preceding fiscal year. It 	earned a total of ,671 	billion.  Nevertheless, the net income did not grow in fiscal 2002 by the 	same percentage as our total net sales grew in fiscal 2002 largely as a 	result of the reduction in the overall gross margin and increased costs and 	expenses of the Company in fiscal 2002. In fiscal 2001, the company acquired 	a net income of ,295 billion, a 17.1% increase over the Company’s net 	income in 2000. This increase resulted primarily from the growth in the 	Company’s total net sales and a slight improvement in the Company’s overall 	gross margin. During July 2001, the company garnered the outstanding 	minority interest in Wal-Mart.com, Inc. from Accel Partners and a small 	group of other investors. A reorganization resulting from the acquisition 	resulted in a charge against the earnings of the Company during fiscal 2002 	of slightly less than .01 per share. This shows that although Wal-Mart is 	such a large company, it does look into the stakeholders of the company.   	SLEPT and SWOT ANALYSIS   	SLEPT ANALYSIS 	 		 				 				Social Influences 				Legal 				Influences 				 				  				 				 				 				Economic Influences 				 				 				 				Political Influences 				 				Technological Influences 				 				  				  			 				 				The 				September 11 attacks have affected the American consumer’s 				attitude on going to public places. 				 				 				 				Lawsuits has 				become the basic defense of a shopper or an employee when they 				are subjected to a certain level of discomfort on stores 				 				 				 				The 				September 11 attacks has also affected the sales of the company 				 				 				 				When Pres. 				Bush was still the governor of Texas, he have authored several 				legislation in favor of large businesses 				 				 				 				Wal-Mart has 				tapped the internet by installing a website for home shopping. 				  			 				 				There is a 				significant demand for retail merchandise in the United States. 				United 				States’ tort reform is considerably meek when dealing with 				corporate giants such as Wal-Mart 				 				 				Competitors 				are closely breathing down Walmart’s neck 				 				 				 				The Bush 				administration’s war on terrorism has affected the perception of 				the international market on American companies 				 				 				 				A 				considerable number of internet home shopping companies has been 				established itself long before Wal-Mart. 				  			 				 				  				 				Wal-Mart is 				currently expanding its market by looking to other opportunities 				aside from the retail industry 				 				 				 				The congress 				has ensured the security of American companies by passing 				legislatures protecting them in order to provide more jobs for 				the American public. 			 				 				The 				merchandise sold in Wal-Mart stores could be considered as basic 				commodities for the American public 				 				 				 				  				 				 				 				  				 			 	    	SWOT ANALYSIS   			  			STRENGTHS 			  			WEAKNESSES 			  			1.    			Wide knowledge of retail industry 			 			2.    			Competent top management and rank & file 			for operation and maintenance 			3.    			Existing customer base 			4.    			Financial investment backing. 			  			1.    			Low supervision on international market 			2.    			 Considerably late exploitation of the 			Internet. 			  			  			OPPORTUNITIES 			  			  			THREATS 			  			1.    			Potential of Internet shopping 			2.    			Expansion of target market 			3.    			Healthy market environment 			  			  			1.    			Economic restructuring 			2.    			Intensified competition 			3.    			Government regulation   	    	COMPETITOR ANALYSIS 	  	Although there are hundreds of companies in 	the retail industry, a close competitor of Wal-Mart throughout the years is 	Kmart. 	 	Kmart Corporation, which is a discount retailer and a general merchandise 	retailer, was integrated in May 1916. The Company functions in the general 	merchandise retailing industry by means of 1,829 Kmart discount stores with 	locations in all 50 states, Puerto Rico, the United States Virgin Islands 	and Guam, as of January 29, 2003, and through its e-commerce shopping site, 	www.kmart.com. On January 22, 2002, Kmart and 37 of its United States 	businesses profiled deliberate requests for restructuring underneath Chapter 	11 of the federal bankruptcy laws, and, consequently, acquired an exit 	financing facility. On January 28, 2003, the court permitted the shutting 	down of 326 stores situated in 40 states, which figure was afterwards 	condensed to 316 stores, or roughly 17%, of the Company’s 1,829 stores. In 	May 2003, the Company transpired from Chapter 11 protection. 	 	 	The Company’s general merchandise retail operations are positioned in 314 of 	the 331 metropolitan statistical areas (MSAs) in the United States. Kmart 	stores are commonly one-floor, detached units varying in mass from 40,000 to 	194,000 square feet with a standard size of 98,000 square feet. In addition 	to its general merchandise retail operations, the Company operates 114 Kmart 	Supercenters. Its supercenters merge a full grocery, deli, bakery, video 	rental and uninterrupted accessibility. They also tender the general 	merchandise collection of a Kmart discount store. 	  	CONCLUSIONS   	The organization’s market 	environment context is thus made up of all the conditions and factors 	external to the organization that can positively or negatively affect the 	life, orientations, structures, development and, in a word, the future of 	your organization. The research on an organization’s market orientation 	would also be helpful in the study. Research on market orientation 	has centered on understanding the construct and examining its relationship 	to performance. Two important studies sought to define and operationalize 	market orientation. Based on an extensive review of the literature on 	sustainable competitive advantage and marketing strategy, Narver and Slater 	(1990) operationalized market orientation as consisting of three dimensions: 	customer orientation, competitor orientation, and inter-functional 	coordination. Using both a literature review and field interviews of 	managers, Kohli and Jaworski (1990) operationalized the market orientation 	construct as consisting of three basic components: intelligence generation, 	intelligence dissemination, and responsiveness. Intelligence generation 	extends beyond collecting information about customer needs and preferences 	to include information about the entire task environment confronting an 	organization. To be market-oriented, an organization has to communicate, 	disseminate, and often “sell” market intelligence to relevant departments 	and individuals in the organization. (Kumar, Subramanian, & Yauger, 1998). 	And finally, the market-oriented organization responds to or acts on the 	market intelligence gathered and disseminated. 	Year after year, sales, profits, and shareholder returns 	from this massive group of discount stores increase, defying economic cycles 	and the woes that seem to beset other retailers from time to time. Some 	argue the reason is market power: Wal-Mart built its business by opening 	stores mainly in small communities where there was less competition. Once a 	Wal-Mart store opened in a small town there was no room for another similar 	retailer. Others point to its systems: electronic linkages with suppliers 	that keep the shelves well-stocked at minimal cost. Another explanation is 	highly motivated staff, inspired by the late Sam Walton’s habit of driving 	around in a pickup truck visiting stores, and supported by concepts like 	teamwork and delegation. Paying attention to customers is also mentioned: at 	Wal-Mart customers really do come first. And of course leadership, the most 	intangible but perhaps most potent factor in management cannot be ignored. 	Wal-Mart represents a combination of factors – a thousand infinitesimal 	actions and decisions – that together have led to its unusual success. A 	professional seeks to learn from these factors, recognizing that they were 	developed over more than 30 years and are underpinned by thoroughness in 	execution that is the antithesis of fads and quick fixes. Nor does a 	professional assume that the factors that worked in the past will continue 	to work in the future.     RECOMMENDATIONS   Wal-Mart has been in the top of the retail industry in the United States for a considerable number of years already. Based on the conclusion and analysis above, the researcher came up with the following recommendations: The company should deeply consider the potential of the Internet to their business. Although they are generally focused on retail, the use of the Internet will allow them to expand its sales as a supplier of wholesale merchandise. Moreover, in order to be consistently at the top of the industry, they should start buying out their small competitors. This way, they could save a great deal of anxiety whenever there are possible threats to their company. Similarly, they should also start lobbying for statues and laws that would protect their rights as corporations in Congress whenever a well-written law is enacted. This way, they could monitor what proposed bills could be beneficial and what could keep a tight rein on the company.      Reference: Kumar, K., Subramaniam, R., & Yauger, C. (1998). Examining the market Orientation Performance Relationship: A Context Specific Study, Journal of Management, 24(2):201-233. Kohli, A.K., & Jaworski, B.J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54: 1-18. Narver, J.C., & Slater, S.F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54: 20-35.   Word count: 1,384 Credit:ivythesis.typepad.com

Case Study on the Market Environment of Wal-Mart

THE MARKET ENVIRONMENT OF WAL-MART TABLE OF CONTENTS Title page …………………………………………………...