Wal-Mart Summary

Summary for Wal Mart

Wal-Mart was established by Sam Walton. After he passed away, it was taken over by David Glass and Soderquist. After taking over by them, the sale of Wal-Mart increased greatly and opened more stores. However, they faced the challenge in sustaining the phenomenal growth as the growth dropped below 10% for its first time.

Unlike its competitors opening stores in big cities, Wal-Mart discounter stores were mostly opened in rural areas where company could expand further in the future. Also company made sure that they had their own warehouses so that they could reduce the cost and sell goods at attractive prices. Its key strategy is “Always low price”. Compared to its competitors, the average price of goods in Wal-Mart is always lower than that in competitor stores. Also Sam emphasized on reducing the costs. Company’s business trip cost is restricted to less than 1 percent the purchase. Unlike competitors, Wal-Mart spent less on advertisement as Wal-Mart display their products based on consumer preference in the region. In addition, consumers can return any dissatisfactory goods to any Wal-Mart store without any question asked. To maximize sale volume and inventory turnover, and lowering expense, wal-mart empowered store managers to set the price based on local market condition. To further lower operating expenses, Wal-Mart built its stores within lower period of time and at lower price as well.

Wal-Mart is known as no-nonsense negotiator. They centralized their buying with no single supplier accounting for more than 2.4 percent purchase. Also it never purchase from companies with unethical practices. Moreover, other than seller-buyer relationship, Wal-Mart became a partner with its large suppliers.

Wal-Mart was branded into different types of stores including Sam’s Club, Wal-Mart Store, Supercenters as Sam’s club sells more premium goods and products.

Wal-Mart was also famous for its national brand strategy as most of sales is from nationally advertised branded products. Together, it had “Buy American” programme as encouraging customers to buy local brands. However, it introduced private label lines at different levels.