Digging up the Views with Wal-Mart

Digging Up the Views with Wal-Mart

Wal-Mart has been praised for its low prices and huge variety; they have also taken a hit about poor benefits and effects on the community. Every aspect will not be overlooked about the world’s largest and richest company.

Sam Walton was the shrewd businessman behind the world's largest retailer. After working his way through the University of Missouri as a newspaper delivery boy, he got a job in Des Moines, Iowa, as a management trainee for J.C. Penny at a salary of $75 a month. He went into business with his brother Bud, and by 1960, the Waltons' 15 stores were taking in $1.4 million a year. But Walton soon saw a challenging new competitor arise, the discount store. The Walton brothers opened their first Wal-Mart in 1962, in Rogers, Arkansas. Specializing in name brands at low prices, the chain of Wal-Mart stores sprang up across rural America. (Browne 23)

Inspired by workers he saw in a tennis ball factory in Korea, Walton introduced the famous "Wal-Mart Cheer" to employees, whom the company refers to as "associates." Walton's management style was popular with employees and helped to spur growth in the 1980’s. The superstore was putting a hamper on traditional mom and pop stores. Sales grew to $26 billion by 1989, compared to $1 billion in 1980.

By 1990, Wal-Mart was the largest U.S. retailer, with 1,700 stores. One year later Wal-Mart entered the international market for the first time with the opening of a unit in Mexico City. Within five years, Wal-Mart would enter Puerto Rico, Argentina, Brazil and China. Since then, Wal-Mart has built stores in Canada, Germany, Korea and the United Kingdom. Sam Walton remained active in managing the company as C.E.O. and president until 1988, and chairman until his death at the age of 74 in 1992. (Browne 44)

Wal-Mart Stores, Inc. is the world's largest retailer and the largest company in the world based on revenues, income, assets, and market capitalization. In the financial year ending January 31, 2002, Wal-Mart had $247 billion in sales and $8 billion in income. It employs over 1 million people in the United States at 3,400 stores and 1.4 million people worldwide at 4,500 retail units in 10 countries: the United States, Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea, Germany, and the United Kingdom.

Wal-Mart currently opens a new mega store every two business days and has expanded, on average, into one new country each year. In 2000, Wal-Mart launched a revamped ecommerce site which would translate into Internet sales. Some analysts think that the aggressive strategy to place large stores in underserved areas that has served Wal-Mart so well may not translate to the online world. The world's biggest retailer entered the European market in December 1997, but operations aren't yet reaching the levels of growth needed to make the company's investment pay off. As of March 2001, Wal-Mart is receiving a return on their investment of just over six percent in Europe, as compared to a 23 percent return in the United States. Still, in the year 2000, sales increased 16 per cent to $191.3 billion, making Wal-Mart a fearsome force in the retailing world. (Creighton 2)

Wal-Mart operates large discount retail stores selling a broad range of products such as clothing, consumer electronics, drugs, outdoor equipment, guns, toys, hardware, cd’s and books. Its typical products are basic, mass-market equipment, rather than premium products stocked at specialist stores. Wal-Mart also operates "Supercenters" which include grocery supermarkets. Sam’s Club stores are also owned by Wal-Mart; these are "warehouse clubs," which require a paid membership to access. (Walton 1)

Each Wal-Mart store has an employee, often an older person, known as a "greeter", whose primary responsibility is to welcome people to the store. One Wal-Mart training video encourages employees to think of themselves not as employees but as "associates" and their superiors as "servant leaders." The training video “You've Picked a Great Place to Work” promotes the essential feeling of family for which Wal-Mart is so well-known. Employees start the work day with a gathering and the "Wal-Mart cheer". Wal-Mart is financially successful by a number of measures. For example, Wal-Mart is now the #1 grocery chain in the United States, with 14 percent of all grocery sales in the country and Wal-Mart controls 20 percent of the retail toy business. (1)

Sam Walton, believed in servant-leadership, which makes Wal-Marts mission to serve associates and customers with compassion and integrity. Wal-Marts emphasis is on their associates, children, families, the local community and other local programs that improve the quality of life in their communities.