CASE STUDY ON THE SUCCESSFUL JOURNEY AND GLORY OF WALMART STORES

VARUN

KESAVAN,

MANAGEMENT

M.PHIL

RESEARCH

ENTREPRENEUR

SCHOLAR,

DEVELOPMENT,

BHARATHIAR

SCHOOL

BHARATHIAR

OF

UNIVERSITY,

COIMBATORE. Email Id varunkesavan@yahoo.com

Wal-Mart

Stores,

Inc.[8] (/wlmrt/), doing

business

as Walmart,

is

an

American multinational retailing corporation that operates as a chain of hypermarkets, discount

department stores and grocery stores. Headquartered in Bentonville, Arkansas, the company was
founded by Sam Walton in 1962 and incorporated on October 31, 1969. As of October 31, 2016,
Walmart has over 11,593 stores and clubs in 28 countries, under a total of 63 banners.[1][2][9] The
company operates under the name Walmart in the United States and Canada. It operates
as Walmart de Mxico y Centroamrica in Mexico and Central America, as Asda in the United
Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations
in Argentina, Brazil, and Canada. It also owns and operates the Sam's Club retail warehouses.[10][11]

Walmart is the world's largest company by revenue, according to the Fortune Global 500 list in 2016,
as well as the largest private employer in the world with 2.2 million employees. It is a family-owned
business, as the company is controlled by the Walton family. Sam Walton's heirs own over
50 percent of Walmart through their holding company, Walton Enterprises, and through their
individual holdings.[12] It is also one of the world's most valuable companies by market value,[13] and is
also

the

largest grocery retailer

in

the

U.S.

In

2016,

62.3 percent

of

Walmart's US$478.614 billion sales came from its U.S. operations.[14]

The company was listed on the New York Stock Exchange in 1972. In the late-1980s and early1990s, the company rose from a regional to a national giant. By 1988, Walmart was the most
profitable retailer in the U.S., [15] and by October 1989, it had become the largest in terms of revenue.

[16]

Geographically limited to the South and lower Midwest up to the mid-1980s, by the early-1990s,

the company's presence spanned from coast to coastSam's Club opened in New Jersey in
November 1989 and the first California outlet opened in Lancaster in July 1990. A Walmart in York,
Pennsylvania opened in October 1990, bringing the main store to the Northeast.[17]

Walmart's investments outside North America have seen mixed results: its operations in the United
Kingdom, South America, and China are highly successful, whereas ventures in Germany and South
Korea failed.

HISTORY OF WALMART

1960s: Retail Revolution

Sam Walton's strategy was built on an unshakeable foundation: The Lowest
Prices Anytime, Anywhere.
1962
On July 2, 1962, Sam Walton opened the first Walmart store in Rogers, Ark.

1967
The Walton family owned 24 stores, ringing up $12.7 million in sales.

1969
The Company officially incorporated as Wal-Mart Stores, Inc.

1970s: Walmart Goes National

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In the 1970s, a decade of incredible growth, "Mr. Sam" began to take Walmart
national, providing his vision's widespread appeal.
1970
Walmart became a publicly traded company. The first stock was sold at
$16.50 per share.

1971
The first distribution center and Home Office opened in Bentonville, Ark.

1972
Walmart was listed on the New York Stock Exchange (WMT). With 51 stores,
Walmart recorded sales of $78 million.

1975
Inspired by a visit to a Korean manufacturing facility, Sam Walton introduced
the Walmart cheer.

1979
The Walmart Foundation was established.

1980s: Decade of Firsts

In the 1980s, the first Sam's Club opened, serving small businesses and
individuals, and the first Walmart Supercenter opened, combining a
supermarket with general merchandise.
The Walton family established the Walton Family Foundation.

Walmart reached $1 billion in annual sales, faster than any other company at
that time.
Walmart had 276 stores and employed 21,000 associates.
1983
The first Sams Club opened in Midwest City, Okla.
Walmart replaced cash registers with computerized point-of-sale systems,
enabling fast and accurate checkout.
1984
Sam Walton did the hula on Wall Street, making good on a promise to
associates after the company achieved a pre-tax profit of 8% for the previous
fiscal year.
1987
The company installed the largest private satellite communication system in
the U.S., linking the company's operations through voice, data and video
communication.
1988
The first Walmart Supercenter opened in Washington, Mo., combining general
merchandise and a full-scale supermarket to provide one-stop shopping
convenience.
David Glass was named CEO.

1990s: America's Top Retailer

By 1990, Walmart was the nation's number-one retailer. As the Walmart
Supercenter redefined convenience and one-stop shopping, Every Day Low
Prices went international.
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1991
Through a joint venture with Cifra, a Mexican retail company, Walmart went
global, opening a Sams Club in Mexico City.

1992
While receiving the Medal of Freedom, Sam Walton articulated the companys
mission of saving people money so they can live better, shortly before passing
away at age 74.
Rob Walton became chairman of the board.
Walmart employed 371,000 associates in 1,928 stores and clubs.
1993
Walmart celebrated its first $1 billion sales week.

1994
Walmart expanded into Canada with the purchase of 122 Woolco stores.
1996
Walmart opened its first stores in China.
1997
The company celebrated its first $100 billion sales year.
1998
The Neighborhood Market format was introduced with three stores in
Arkansas.
Walmart entered the United Kingdom with the acquisition of ASDA.

2000s: New Millennium

Walmart entered the new millennium dedicated to offering customers a
seamless shopping experience, whether they are online, in a store or on a
mobile device.

2000
H. Lee Scott, Jr. succeeded David Glass as CEO.
Walmart.com was founded, allowing U.S. customers to shop online.
Walmart employed more than 1.1 million associates in 3,989 stores and clubs
worldwide.
2002
For the first time, Walmart topped the Fortune 500 ranking of America's
largest companies.
Walmart entered the Japanese market through its investment in Seiyu.
2005
Walmart took a leading role in disaster relief, contributing $18 million and
2,450 truckloads of supplies to victims of hurricanes Katrina and Rita.
Walmart made a major commitment to environmental sustainability,
announcing goals to create zero waste, use only renewable energy and sell
products that sustain people and the environment.
2006
Walmart introduced its $4 generic-drug prescription program.
2007
Walmart.com launched Site to Store service, enabling customers to make a
purchase online and pick up merchandise in stores.

2009
Mike Duke became CEO.
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Walmart entered Chile with the acquisition of a majority stake in D&S S.A.
For the first time, Walmart exceeded $400 billion in annual sales.
2010
Bharti Walmart, a joint venture, opened its first store in India.
Walmart committed $2 billion through the end of 2015 to help end hunger in
the United States.
Walmart launched a global commitment to sustainable agriculture, aiming to
strengthen local farmers and economies, while providing customers access to
affordable, high-quality food.
2011
With the acquisition of MassMart in South Africa, Walmart surpassed 10,000
retail units around the world.
2012
Walmart celebrated 50 years of helping people save money so they can live
better.
2013
Walmart acquires Bharti Walmart Private Limited, including the Best Price
Modern Wholesale cash and carry business in India.
Walmart U.S. announces it will hire any honorably discharged veteran within
their first year off active duty. Walmart projects hiring over 100,000 veterans in
the next five years.
Walmart commits to buying $250 billion in goods manufactured in the United
States over the next 10 years.

2014
Doug McMillon succeeded Mike Duke as CEO.
The company employs 2.3 million associates worldwide and serves more than
200 million customers each week at more than 11,000 stores in 27 countries.

2015
In February, Walmart announces a $2.7 billion investment over two years in its
U.S. workforce, including raising its minimum wage to $9 an hour,
implementing new training programs, and giving associates more control over
their schedules.
Walmart acquires 100% stake in Yihaodian, an e-commerce business in
China, up form the 51% stake since 2012.
Rob Walton retires as Chairman of the Board of Directors for Wal-Mart Stores,
Inc. He continues to serve as a Director.
Greg Penner Succeeds Rob Walton as Chairman of Wal-Mart Stores Inc.

2016
Walmart announced a deal to acquire e-commerce website Jet.com for US$3.3 billion[82][83] Jet.com
co-founder and CEO Marc Lore will stay on to run Jet.com in addition to Walmart's existing U.S. ecommerce operation. The acquisition is structured as a payout of $3 billion in cash, and an additional
$300 million in Walmart stock vested over time as part of an incentive bonus plan for Jet.com
executives.
Walmart announced it would partner up with IBM (IBM) and Tsinghua University to track the pork
supply chain in China using block chain.

Operating divisions
8

Walmart's operations are organized into four divisions: Walmart U.S., Walmart International, Sam's
Club and Global eCommerce.[86] The company offers various retail formats throughout these
divisions, including supercenters, supermarkets, hypermarkets, warehouse clubs, cash-and-carry
stores, home improvement, specialty electronics, restaurants, apparel stores, drugstores,
convenience stores and digital retail.[9]

Walmart U.S.

Walmart U.S. is the company's largest division, accounting for US$298.378 billion, or 62.3 percent
of total sales, for fiscal 2016.[14] It consists of three retail formats that have become commonplace in
the United States: Supercenters, Discount Stores, Neighborhood Markets and other small formats.
The discount stores sell a variety of mostly non-grocery products, though emphasis has now shifted
towards supercenters, which include more groceries. As of October 31, 2016, there are a total of
4,648 Walmart U.S. stores.[1][2]

The president and CEO of Walmart U.S. is Greg Foran.[87]

Walmart Supercenter
Walmart began building Supercenters in 1988 and are around 182,000 square feet
employing about 300 associates. Walmart Supercenters offer a one-stop shopping
experience by combining a grocery store with fresh produce, bakery, deli and dairy products
with electronics, apparel, toys and home furnishings. Most Supercenters are open 24 hours,
and may also include specialty shops such as banks, hair and nail salons, restaurants, or
vision centers.
9

Walmart Discount Store

Since Sam Walton opened his first discount store in Rogers, Ark., in 1962, they have built
hundreds across the U.S. Smaller than a Supercenter, discount stores employ about 200
associates and offer electronics, apparel, toys, home furnishings, health and beauty aids,
hardware and more in about 106,000 square feet of open, brightly lit space.

Walmart Neighborhood Market

Walmart Neighborhood Markets were designed in 1998 as a smaller-footprint option for
communities in need of a pharmacy, affordable groceries and merchandise. Each one is
approximately 38,000 square feet and employs up to 95 associates. Walmart Neighborhood
Markets offer fresh produce, meat and dairy products, bakery and deli items, household
supplies, health and beauty aids and a pharmacy.

Distribution Centers
Walmart's 150+ distribution centers are hubs of activity for our business. Their
distribution operation is one of the largest in the world servicing stores, clubs
and direct delivery to customers. Walmart transportation has a fleet of 6,100
tractors, 61,000 trailers and more than 7,800 drivers.

10

The distribution center network ships general merchandise, dry

groceries, perishable groceries, along with other specialty categories to our
consumers daily.

There are 6 disaster distribution centers, strategically located across the

country and stocked to provide rapid response to struggling communities in
the event of a natural disaster.

Each distribution center is more than 1 million square feet in size and
employs 600+ personnel unloading and shipping over 200 trailers daily.

Every distribution center supports 90 to 100 stores in a 150+ mile

radius.

Walmart International

As of October 31, 2016, Walmart's international operations comprised 6,289 stores [1][2] and 800,000
workers in 26 countries outside the United States. There are wholly owned operations in Argentina,
Brazil, Canada, and the UK. With 2.2 million employees worldwide, the company is the largest
private employer in the U.S. and Mexico, and one of the largest in Canada. [6] In fiscal 2016,
Walmart's international division sales were US$123.408 billion, or 25.8 percent of total sales.
[14]

International retail units range from 4,000 to 185,000 square feet (370 to 17,190 square metres),

wholesale units range from 35,000 to 70,000 square feet (3,300 to 6,500 square metres) and other
units (including drugstores and convenience stores) range up to 2,400 square feet (220 square
metres).

11

Sam's Club

Sam Walton opened the first Sam's Club in 1983 to help small business
owners save money on merchandise purchased in bulk. Since then, Sam's
Club has grown rapidly to serve families and entrepreneurs through more than
650 clubs in the U.S., 100 international clubs, SamsClub.com and mobile
applications. Today Sams Club is committed to being the most valued
membership organization in the world by saving members money on the items
they buy most and surprising members with the unexpected find anywhere,
anytime.

Sam's Club employs about 100,000 associates in the U.S. The average club
is 134,000 square feet and offers high-quality bulk groceries, consumables
and general merchandise. Sams Club also offers specialty services, including
travel, auto buying, pharmacy, optical, hearing aid centers, tire and battery
centers and a portfolio of business operations support services. The president
& CEO of Sam's Club is Rosalind Brewer.

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Sam's Club commitment towards small business owners

Serving small business owners and entrepreneurs as members for 33 years,
Sams Club is uniquely positioned to support small business growth and
prosperity through business initiatives, philanthropy, research and stakeholder
engagement. With more than 650 clubs today, Sams Club serves about
500,000 small business owners every day, the majority of whom are
microenterprises with fewer than seven employees.

Global e - Commerce

The world's largest retailer is also the world's largest, fastest-growing and
most dynamic ecommerce organization. Based in California's Silicon Valley -with operations in Bangalore, India and Sao Paulo, Brazil -- Walmart Global
eCommerce leads all online and mobile innovation for Walmart.
With the best and brightest technologists, including @WalmartLabs, they are
creating a seamless experience that lets customers shop anytime and
anywhere using online, mobile, social and stores.

13

Big data, social and mobile

Walmart has some of the best data scientists and the largest collection of
commerce data in the world. They are using that, along with social insights, to
deliver a personalized shopping experience -- understanding not just what
customers want and need, but also where they want it and how they want to
experience it.
Mobile transforms the retail experience by bringing together online and stores
- putting power directly in the customers' hands.

eCommerce Websites Globally

Their largest website, Walmart.com, sees 45 million visits a month and is
growing every year. With their mobile apps, shipping options like Home Free,
Site to Store, Pick up Today, Ship from Store and Same Day Delivery, they are
connecting the experience between online and U.S. stores.

Walmart operates ecommerce websites in 10 countries:

Walmart.com (in the United States)

Argentina

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Brazil

Canada

Chile

China

Japan

Mexico

South Africa

United Kingdom

Technology

Open Source Software

Many Walmart technology projects are coded in the open and available through the Walmart
Labs GitHub repository[196] as Open Source software under the OSI approvedApache V2.0 license. At
the time of writing (November 2016), 141 public Github projects are listed.

15

During a migration of the walmart.com retail platform to Facebook React and Node.js, the
Electrode[197] project was created to power the e-commerce platform which serves 80 million visitors
per month and 15 million items.

Electrode provides various developer enhancements and tools for the developer including Node.js
configuration and feature management.

Alex Grigoryan[198] of Walmart Labs released a statement [199] on Medium.com 3 October 2016
explaining the details of the applications and the scale that they operate at Walmart.

Big data analytics

As the largest retailer in the U.S., Walmart collects and analyzes a large amount of consumer data.
The big data sets are mined for use in predictive analytics, which allow the company to optimize
operations by predicting customer's habits. Walmart's datacenter is unofficially referred to as Area
71.

In April 2011, Walmart acquired Kosmix to develop software for analyzing real-time data streams.
[200]

In August 2012, Walmart announced its Polaris search engine.

The amount of data gathered by Walmart has raised privacy concerns.

Charity
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Sam Walton believed that the company's contribution to society was the fact that it operated
efficiently, thereby lowering the cost of living for customers, and therefore in that sense was a
"powerful force for good", despite his refusal to contribute cash to philanthropic causes. [204] Having
begun to feel that his wealth attracted people who wanted nothing more than a "handout", he
explained that while he believed his family had been fortunate and wished to use his wealth to aid
worthy causes like education, they could not be expected to "solve every personal problem that
comes to [their] attention". He explained later in his autobiography, "We feel very strongly that WalMart really is not, and should not be, in the charity business," stating "any debit has to be passed
along to somebodyeither shareholders or our customers." [205] Since Sam Walton's death in 1992,
however, Walmart and the Walmart Foundation dramatically increased charitable giving. For
example, in 2005, Walmart donated US$20 million in cash and merchandise for Hurricane
Katrina relief. Today, Walmart's charitable donations approach US$1 billion each year.[206]

10 Golden Success Mantra of Walmarts Victory

1. Commit to your business.

Believe in it more than anybody else. If you love your work, you'll be out there
every day trying to do it the best you possibly can, and pretty soon everybody
around will catch the passion from you like a fever.

17

2. Share your profits with all your associates, and treat them as
partners.

In turn, they will treat you as a partner, and together you will all perform
beyond your wildest expectations.

3. Motivate your partners.

Money and ownership alone aren't enough. Set high goals, encourage
competition, and then keep score. Don't become too predictable.

4. Communicate everything you possibly can to your partners.

The more they know, the more they'll understand. The more they understand,
the more they'll care. Once they care, there's no stopping them.

5. Appreciate everything your associates do for the business.

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Nothing else can quite substitute for a few well-chosen, well-timed, sincere
words of praise. They're absolutely free and worth a fortune.

6. Celebrate your success.

Don't take yourself so seriously. Loosen up, and everybody around you will
loosen up. Have fun. Show enthusiasm always. All of this is more important,
and more fun, than you think, and it really fools competition.

7. Listen to everyone in your company.

And figure out ways to get them talking. To push responsibility down in your
organization, and to force good ideas to bubble up within it, you must listen to
what your associates are trying to tell you.

8. Exceed your customers expectations.

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Give them what they want and a little more. Make good on all your
mistakes, and don't make excuses apologize. Stand behind everything you
do.

9. Control your expenses better than your competition.

This is where you can always find the competitive advantage. You can make a
lot of different mistakes and still recover if you run an efficient operation. Or
you can be brilliant and still go out of business if you're too inefficient.

10.

Swim upstream.

Go the other way. Ignore the conventional wisdom. If everybody else is doing
it one way, there's a good chance you can find your niche by going in exactly
the opposite direction.

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QUESTIONS
1. What are the various challenges present for Walmart stores?

2. Which kind of technology can be adopted for Walmart stores in near future?

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References
1. http://corporate.walmart.com/our-story/history/10-rules-for-building-a-

2.
3.
4.
5.
6.
7.
8.

business
http://corporate.walmart.com/our-story/our-history
http://corporate.walmart.com/our-story/our-business
http://stock.walmart.com/investors/our-strategy/
http://corporate.samsclub.com/small-business
https://en.wikipedia.org/wiki/Walmart
http://corporate.walmart.com/our-story
https://www.walmart.com/

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