The Walmart INC Research  Case Study

The Walmart INC Research  Case Study

Instructions/Descriptions

1. Overview of Walmart INC

Walmart INC is a multinational corporation that mainly deals in the retail sector. Founded by Sam Walton 57 years ago on the 2nd of July 1962, the corporation which is American based owns and runs a series of discount department stores, grocery stores and hypermarkets both in the United States and in other foreign countries.

Currently, the company has its headquarters in Bentonville in Arkansas. Aside from the hypermarkets and other department stores, the corporation also owns and operates a chain of warehouses under the name Sam’s Club.

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As of January, the company is estimated to have 11,503 stores and clubs spread out across 27 countries all over the world. All of these stores and clubs operate under different names in the different parts of the world in which they are located. In Canada and America, Walmart corporation runs its operations using the name Walmart.

In the Central parts of America and Mexico, it uses the name Walmart de México y Centro América. In other parts of the world like the United Kingdom, you will find Walmart as Asda, in Japan they are known as the Seiyu group and operates as Best Price stores in India.

All of these companies are under the leadership of a chairman and the president of the corporation. Currently serving as the chairman is Greg Penner and the Chief Executive Officer who also doubles up as the president of the corporation is Doug McMillon (Walmart, 2020). The company however, is a family owned business with the heirs of Sam Walton holding a majority of the shares with 51% of the total company. this includes both the individual holdings and their enterprises, Walton Enterprises.

The corporation was according to the fortune global list named as the world’s largest corporation with annual revenues of the company standing at US $514.405 billion in the same year. This revenue consists of all the cumulative revenues from the different stores and warehouses owned by the corporation.

America alone contributed to 65% of this total revenue. In as much as the corporation faces competition from other different retail shops, it can be seen as a monopoly in the market. The corporation is also the leading private employer around the globe and has about 2.2 million employees spread all over their outlets in different parts of the world (Frue, 2018).

Among the products offered by Walmart stores include electronics, movies and music, footwear, sports and fitness equipment, home and furniture, pet supply, home improvement, health and beauty supplies, toys, jewelry, auto supplies, craft supplies, photo finishing, grocery and party supply.

These are offered in more than one of the various stores and warehouses spread across the country. Also, it offers financial services, Walmart 2 Walmart, pickup today, Walmart.com and Walmart money card services.

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Although the corporation has most of the products and services under one store and warehouses, it still receives competition from both the United States and in the foreign markets. In North America for instance, the company faces stiff competition from different grocery stores like Aldi, Kroger, Publix, Winn Dixie among others. It also experiences stiff competition in foreign markets especially the German country and the Asian countries like Japan and China who prefer their locally available stores for production of some delicacies.

1. Demand Analysis

Demand as a concept is based on the theory of the consumer choice. There are many different stores from which people can opt to buy their grocery and products from, rather than Walmart. These include competitive grocery stores like K-mart. Walmart has come up with strategies to ensure that they retain their position as the number one preferred outlet for their customers.

How Walmart has managed to retain its customers and even attract more is by the fact that Walmart sells almost everything under one roof. From the variety of products, they offer in their retail stores, Walmart has been able to retain their customers.

One could get different supplies from auto spares to toys and fitness and sport supplies all under one store. This makes Walmart a preference for most of the customers that are in the habit of wanting to buy different classes of products in less time or with limited movement.

Walmart stores have also found a way to penetrate into the customer base. It is hypothesized that almost 90% of the American population live in proximity to the Walmart stores. Walmart has been able to open different stores from Sam’s warehouses to Walmart supercenters, discount stores and neighborhood stores in many different parts of the country and different countries worldwide. With this strategy of getting the markets close to its customers, the demand remains constant or increase.

The low prices in the Walmart stores has also made them be a preferred store in comparison to its competitors and has helped them maintain an edge over its competitors. The founder, Sam, made a strategy of lowering the marginal profits while at the same time increasing the produce volume.

This way, in as much as there is little marginal profit being obtained from the sale of a single product, there is still an overall increased profit from the bulk in which the produce is sold. This way, they maintain low prices that are able to reach a wide range of customers. By maintaining low priced products and pocket friendly products, the demand for their products and services remains very high.

Finally, by using electronic commerce tools like using barcodes and radio frequency identification on their products, the have been able to create a good inventory management system. They have a track on what items are needed, in what quantity and at what time in all their stores throughout.

It is therefore impossible to heart that there are items that are out of stock in the Walmart stores. This efficiency and reliability have helped keep them ahead of their competitors in the market and makes them be demanded for by the customers (Hyde, 2019).

III. What Walmart got wrong

Over their 57 years in the market, Walmart has gotten a lot of things wrong particularly in the human resources department (Shannon, 2016). To begin with, Walmart has had a bad reputation of not allowing its workers to become members of unions.

Walmart has been labeled to be one of the countries that have a strict policy of anti-union stance. Workers are not at the liberty of joining any labor or trade union without victimization from the corporation. In 2005, labor unions negatively portrayed the corporation through media adverts with the famous one called the Walmart watch advert.

Walmart has also been accused of paying their employees low wages. According to a research that was done, the employees in Walmart do chores that are done by 1.5 to 1.75 of employees in other retail stores. the workers were however being payed less by the Walmart corporation. This brought a cry among the labor departments who have demanded that the hourly wages be increased for the workers who work at the corporation.

Another example where Walmart has failed is in the working conditions of its employees. A lawsuit was presented against Walmart for the poor conditions of working by the workers in the company. The court asserted that approximately 200,000 workers in Walmart were working overtime with denied resting breaks and lunch breaks.

These workers were denied overtime pay where they worked overtime. Also, there were reports of workers in the nightshift being locked in the stores. these poor conditions are a negative image portrayed by Walmart.

In 2011, four employees of Walmart made a lawsuit against the company after they were wrongfully terminated. This came after they were fired for disarming and subduing a shoplifter who had attacked and held hostage one of them. They were fired because they went against the company’s policy that stated that they were to disengage and withdraw in the case of a situation involving firearms. This termination was wrongful and portrayed a bad image of Walmart.

Finally, a 2009 case where one of the employees of Walmart was fired for using medical marijuana is an example where Walmart has been accused of mistreating employees with prescriptions. The employee has an inoperable brain tumor and was using the medically prescribed marijuana yet the company fired him. These examples are the few where Walmart has been criticized of not taking into account human resources management.

1. What Walmart got right

Walmart is one of the leading supermarkets across the globe. They have succeeded in expanding its outlets across the globe and also helped in creating employment to millions of people in all the outlets. There are different strategies that the industry has employed in order to remain competitive in the market because it is very easy for supermarkets to close as soon as they open.

Walmart has stayed true to its purpose. As Walton put it, the purpose was to save the its customers money so that they could live better. It has therefore kept this promise by still selling low priced goods which are affordable to many people.

This way, it has created a loyal customer base in all of its outlets. Walmart is also not left behind when other industries are going digital. For example, in the 80’s, it was among the first supermarkets to utilize the barcode technology which had been introduced to the market to ensure that goods could be detected by a system. This way, they were able to key in goods sold in the systems faster and also prevent theft of goods in the supermarket because this would cause an alarm to go off (Efron, 2017).

It also adopted the radio frequency identification technology (RFIT) which helped them to monitor the goods sold and what to replenish in the stores. This made processes to be carried out faster and also helped them to stay competitive in the digital world. It has an advanced supply chain. When it comes to this area, Walmart is commonly referred to as the industry leader. The processes of manufacturing to the distribution of goods are well organized. This helps in reducing costs which are normally experienced during storage and transportation of the goods.

The processes are conducted smoothly. In the 1980’s, Walmart decided to deal directly with the manufacturers. This promoted the bargaining power of Walmart and helped them acquire goods at a relatively cheaper price. They were able to acquire goods which had been customized to fit their customers’ preferences.

It also motivates its employees using the 10-foot rule which suggests that if any employees are at this distance from any customer, they are supposed to help them if they are facing any challenges in locating some of the goods. This has made them to acquire loyal customers because of the good treatment they receive.

1. Conclusion

In conclusion, Walmart is a retail company that deals in the basic requirements of daily livelihood of the customers. It has managed to grow over the 57 years it has been in the market to penetrate into the customer base. It is currently the worlds largest company in terms of revenue and can be attributed to the strategies it has employed to retain its customers.

While the company has some good strategies to ensure the customers get good services and high-quality products at pocket friendly prices, it has been criticized for various reasons most of which point out to mistreatment of its workers. All in all, the company has incurred a lot of successes in the retail market as can be seen from this case study.

References

Efron L. (2017). Why Wal-Mart Is Winning In A Losing Industry. Retrieved from https://www.forbes.com/sites/louisefron/2017/05/31/why-wal-mart-is-winning-in-a- losing-industry/#104ed4cb44d5

Frue K (2018) SWOT Analysis of Walmart. Pestle Analysis. Retrieved from https://pestleanalysis.com/swot-analysis-of-walmart/

Hyde R. R (2019) How Walmart Model Wins With “Everyday Low Prices” Investopedia. Retrieved from https://www.investopedia.com/articles/personal-finance/011815/how- walmart-model-wins-everyday-low-prices.asp

Shannon P. (2016). Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy. Retrieved from https://www.bloomberg.com/features/2016-walmart-crime

Walmart (2020) About Us. Retrieved from https://corporate.walmart.com/our-story

Walmart. (2020). Where in the world is Walmart? Retrieved from https://web.archive.org/web/20140104115055/http://corporate.walmart.com/our- story/our-business/locations/#/united-kingdom

The Walmart INC Research  Case Study

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