Running head: WALMART

Walmart An Assignment Submitted by Name of Student Name of Establishment Class XXXX, Section XXXX, Fall 2012

TITLE OR TOPIC IN CAPS Assignment Title According to Walmarts Global Sustainability Report for the year of 2010 which can be found on the companys website, Walmart is trying to double its efficiency and substantially increase its market presence by the end of 2015. After being successful in the US market with over 4,300 stores nationwide, the company decided to start its business abroad. Today, Walmart operates in 26 countries outside the USA, has over 5,500 international stores and is still growing (the data is available on Walmart website). The objective of this case is to analyse present and past activity of Walmart in order to determine its main trends that resulted into profitable growth and development. By analysing the history of the company, its presence in the market, and its activity comparing to main competitors, it is easy to get a good picture of the business and clear understanding of its future success. The very first Walmart store was opened in 1962 by Sam Walton in Rogers, Arkansas. By 1967, there were 25 stores operating. The company went public in 1970 which was a great start for accumulating larger amounts of capital in order to expand the presence even more. As a result, by 2005, there were 3,800 stores opened. International presence of the company occured in 1991, when the first Walmart appeared abroad. Also, in regards of Sams Club which is also a part of the Walmart empire, the first one was opened in 1983 introducing new customers and attracting even more buyers. After the year of 2005, the company started to grow extremely fast, and its total sales were extremely high. For example, in 2007, the sales of Walmart rose to $345 billion. (Barley, 2008)

TITLE OR TOPIC IN CAPS Despite the fact that the company had been experiencing a continuous growth and development for a long time, there were some major controversies also. Walmart was being criticized for environmental violations, child labour, illegal workers, poor working conditions, and lower than average salaries. There were some communities that even rejected the presence of Walmart stores in their neighbourhoods. A storm of a bad press followed including several book publications and releases of documentaries on how bad working conditions in Walmart were and how harmful for the environment all Walmart production was. Of course, such bad publicity resulted into a loss of over $16 billion. However, Walmart still managed to maintain its leadership position in the market. In terms of the companys strategic profile, Walmart has three main business segments such as Walmart Stores, Sams Club (wholesale retailer), and Walmart International. Walmart is also a large online retailer, has over 2,500 Supercenters, 1,000 Discount stores, and over 100 Neighbourhood markets which have a pretty small format focusing mainly on groceries and produce. As far as Sams Club is concerned, it operates like a retail warehouse and also has an online store. Discount stores are also extremely important for the company as, according to the latest data, the number of their customers is growing very fast. Walmart International has managed to add over 1000 new stores in the past five years. Main international operations are located in Argentina, Brazil, Canada, Puerto Rico, the UK, China, Japan, and Mexico. It is also expected to open its first store in India in about a year. Many international subsidiaries play a very important role in providing the company with higher than average sales in the regions of their presence. For example, the UK-based Asda subsidiary brings in the largest share of the

TITLE OR TOPIC IN CAPS companys international revenue, at 37.4 %. Walmart in Mexico provides next largest share, at 23.6% of Walmart International sales. (Barley, 2008) Walmart has been very much concentrated in the product diversification lately. Offering different range of products in the stores has become one of the major factors for the company to improve its overall performance. As an example it would be fare to mention that walmart.com offers more than 1 million different products for its customers to choose from. The number of units and products is constantly growing, and list of product types includes appliances, electronics, furniture, jewellery, and office products, plus healthcare, business, personal and financial services. (Barley, 2008) Being among the leaders in the industry for quite some time, Walmart has practiced a switch of its main policies and directions many times. After decades of harsh criticism of its operations, the company managed to improve working conditions and remunerations of its employees and, according to the latest research, the company is standing much higher in the ranking of best workplaces in the USA than it has ever had in the past. For the last 10 years, Walmarts net income has quadrupled, revenues have tripled. At the same time, operations and general expenses have increased, however, working conditions and employee satisfaction have improved much more comparing to the previous years. Overall, general environment proves to be favourable for both current and future growth of the company. The industry where Walmart is operating is constantly improving and offering new and better solutions, products and services. Among the main competitors of Walmart, it is important to mention Target, Costco, Kroeger, and Family Dollar stores. Currently, Walmart holds a number one spot among 100 largest general merchandise

TITLE OR TOPIC IN CAPS retailers in America. While other retail stores also managed to increase their profits in many segments, none of them was able to beat the Walmarts competition. In order to understand the situation in the market, it is important to define the state of business of the competitors. Costco, a wholesale retailer, runs over 600 warehouses in 38 states and six countries. Its main benefits are from a limited number of products sold in high volumes and convenient real estate locations. The Kroeger and Co is one of the largest retailers in the States, and it operates almost 3,000 supermarket and multidepartment stores. In the past five years, it has experiences a drop in its income. However, a new policy which was started two years ago is expected to attract more customers in the future. Target Corporation, basically the major competitor of Walmart, currently operates over 1,400 stores and has one of the most popular online businesses, target.com. It has grown a lot in the past decade, and is expected to increase its revenue next year by 15%. At a department level, there are several stores that compete with Walmart in certain niches. Such stores are Safeway, Best Buy, Home Depot, Ace Hardware, Kohls. Several of them like Borders and Circuit City did not manage to deal with economic slowdown and experienced severe income loses and store closures. Walmart is growing fast, and it is obvious that its business is only going to grow bigger in the future. Taking into account its previous experience, it is fair to say that Walmart managed to deal with many obstacles and difficulties and now is experiencing better than ever growth in revenues.

TITLE OR TOPIC IN CAPS References Barley F. (2008). Walamrt Stores Inc. Arizona State University. Business Line. (2012). Walmart may open first India store in 12-18 months. Retrieved from < http://www.thehindubusinessline.com/industry-andeconomy/marketing/article3922399.ece?homepage=true&ref=wl_home>. Fishman J. (2009). The Wal-Mart Effect: How the Worlds Most Powerful Company Really Works and How Its Transforming the American Economy. New York: Penguin. Sweeney J. (2012). Walmart grocery opens in San Ramon. Retrieved from < http://www.insidebayarea.com/ci_21585835/walmart-grocery-opens-sanramon?source=most_emailed>. Walmart. (2010). Global Sustainability Report. New York. Walmart. (2012). Retrieved from <http://www.walmart.com>. Zook M. & Graham M. (2006). Wal-Mart Nation: Mapping the Research of a Retail Colossus. London: Routledge.