Wal-Mart Stores, Inc. is the American corporation that operates discount department stores. In terms of revenue it happens to be the world's largest public corporation and the evaluation was made by 2008 Fortune Global 500. It was started by Sam Walton in 1962, and incorporated on October 31, 1969. In 1972 it got a position on the New York Stock Exchange. It is the single largest private employer in the U.S. along with which it is the largest grocery retailer holding an estimated 20% market share of the retail grocery and consumables business. It is also the owner and operator of the North American company, Sam's Club.
Walmart:
Every day Low Price concept, (EDLP), prices are 20% to 30% less than competitors.
Required additional sales of $37 Billion each year to maintain the growth rate of 17%.
To have 17% growth in next 10 years, it should achieve a sales of $1080 Billion (1 Trillion), another $862 Billion; $758 from domestic operation and $322 Billion from International operation.
Out of total sales of $218 Billion, 4140 Billion was from Retail Division (over $62 Billion from Super center, and $60 Billion from Discount stores), $29 Billion from Sam's club, and $35 Billion from International operation.
[...] Walmart Super centers fully penetrated only approximately 24% of US States and 30% of top 250 markets in US. Approximately 34% of 50 states and 37% of top 250 markets remained under penetrated. This presented room for growth and was expected to have a full penetration of 75%. Neighborhood Market: Credit goes to Lee Scott. A traditional Supermarket plus Drug store, i.e. Walmart Neighborhood Market, was introduced to provide grocery coverage in areas too small for a Super center, and a more convenient alternative to Super center and thus targeting that business, which were not getting purely because the Super center may not be as close to customer or convenient for small shopping trips. [...]
[...] Wal-Mart can control the Convenience-type market through the implementation of the Neighborhood Market concept. Wal-Mart can continue it's domestically and international expansion. Threats: Jobs being shipped overseas Competition E-commerce: Unfamiliarity with the new web based business may put Wal- Mart at disadvantages with its competitors. Environmental Interest Groups: Expansions often entail building new stores in uninhabited areas. Economic Climate: As the stock markets and interest rates fluctuate so do sales revenues. Market Demographics While Wal-Mart seems unstoppable, there are a few red flags. [...]
[...] Walmart should make every effort to have their advertising continue to reflect Sam's message of inclusion and respect. Wal-Mart should stick to its knitting. From the start, Wal-Mart's advertising focus was all about Every Day Low Pricing. Wal-Mart can spend the least on advertising, Wal-Mart has engendered a trust with customers that they will always find that low price, and chances are good that a product will always be in stock. The consumer understands this and responds. Advertising may not rank high in terms of dollars spent, but in its most basic form. [...]
[...] However Walmart should continue its strategy and tactics, like continuous innovation, adding of new products and services to the existing category based on the changing needs of the customers, excellent customer service, maintaining dominance in the market, creating entry barriers to competitors, experimenting new ideas as the market condition changes and new opportunities arises, changing marketing strategies in other countries based on the prevailing situation there, and also overcoming some weaknesses mentioned below. Domestically, the company's sales last year ($218 Billion in 2001) represent only about of a U.S. [...]
[...] Further expansion and study of the concept will be needed to make those determinations. This format is a crucial part of Wal-Mart's strategy to significantly increase its share of the retail food industry over the longer term. But Wal-Mart doesn't need to rush the concept. The company could take several years to fine-tune its real estate strategy before initiating any type of large-scale expansion. The company's other divisions are cranking out record profits, with additional growth forecast. The International division is growing rapidly, and a strong dollar makes expansion through acquisition inexpensive. [...]
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