Describe The Firm And The Industries In Which It Competes 

This project is an analysis that examines Wal-Mart Stores, Inc. as it pertains to what kind of organization it is, what the primary functions are, what the organization goals and objectives are, along with a look at the financial reports as well.  In this project, the top 3 competitors will also be examined and compared to the organization and its divisions.  The key success factors and potential technological changes that could impact these factors will be discussed in this project as well.

Wal-Mart Stores, Inc. was founded by Samuel Moore Walton and James Lawrence Walton on July 2, 1962 and is headquartered in Bentonville, AR (CNN Money).  The organization is an international corporation that operates retail stores in various formats around the world and operates through three divisions: Walmart U.S., Walmart International and Sam’s Club (CNN Money). The Walmart U.S. division is comprised of the company’s mass merchant concept under the Walmart or Wal-Mart brand, as well as their online component www.walmart.com.  This division also offers financial services and related products, including transactions such as money orders, prepaid cards, wire transfers, check cashing, bill payment and more. The Walmart International division is comprised of several variations of retail stores, restaurants, wholesale clubs, including the popular Sam’s Clubs, and other retail websites that operate outside the U.S.  This division operates in three major classifications: retail, wholesale and others such as discount stores, supermarkets, supercenters, hypermarkets, retail websites, warehouse clubs, restaurants and apparel stores.  The Sam’s Club division is comprised of the warehouse membership clubs in the U.S. along with those purchased through their online component, www.samsclub.com (CNN Money).  This division also offers brand name goods in five merchandise categories namely grocery and consumables, fuel, technology, office and entertainment, home and apparel and health and wellness.

According to CNN Money, the top three competitors for Wal-Mart Stores, Inc. are Macy’s, Inc., Kohl’s Corporation, and Dillard’s Inc. Macy’s, Inc. was founded on March 6, 1929 and is headquartered in Cincinnati, OH (CNN Money).  Macy’s primary operation is department stores but also provides services through their online component under two brand names: Macy’s and Bloomingdale’s (CNN Money).  Both entities sell a wide range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and many more consumer goods. In comparison to Wal-Mart’s division of Sam’s Club, Macy’s division for Bloomingdale’s has seven outlet stores and also provides services through its subsidiaries, which include Macy’s Systems and Technology, Inc. and Macy’s Merchandising Group, Inc. (CNN Money).  Macy’s Merchandising Group, Inc. additionally designs and markets Macy’s private label brands and specific licensed brands.  These private label brands currently offered consist of 34 brands including, but not limited to, American Rag, Charter Club, Greg Norman for Tasso Elba, Holiday Lane, Hotel Collection, Hudson Park, John Ashford, Martha Stewart Collection, Material Girl, Style & Co., Style & Co. Sport, Tasso Elba, and Via Europa (CNN Money).  Reported in their financial records for the year-to-date is a 9.64 percent increase in revenues as opposed to Wal-Mart’s .28 percent year-to-date increase.  Although Macy’s sector is in retail trade like Wal-Mart, its main industry is reported as department stores instead of discount stores like its competitor.  The next industry competitor to consider is Kohl’s Corporation and how it measures up to Wal-Mart Stores, Inc.

Kohl’s was founded in 1962 and is headquartered in Menomonee Falls, WI.  Kohl’s Corp. owns and operates family-oriented department stores that offer exclusive brand apparel, shoes, accessories and home & beauty products through its department stores (CNN Money).  The corporation’s stores typically carry consistent varieties of merchandise and are sometimes tailored to specific regional preferences.  Like its competitors, Kohl’s Corp also offers on-line shopping via its website www.Kohls.com which provides a convenient and simple on-line shopping environment that does not deflect from the organization’s brands (CNN Money).  As of year-to-date, Kohl’s has decreased its revenues by 1.25 percent and has gone from 19.3 billion dollars in revenue and income in 2013 to 19 billion dollars so far this year (CNN Money).  The last of the top three competitors for Wal-Mart Stores, Inc. has shown a great increase in its financial revenue and has consistently raised its operating income over the past 4 years and is known nationwide as Dillard’s.

The company was founded by William Thomas Dillard in 1938, is headquartered in Little Rock, AR and operates as a fashion apparel, cosmetics and home furnishings retailer (CNN Money).  Dillard’s operates its business through two divisions: Retail Department Stores and General Contracting Construction. Dillard’s, Inc. retail division offers a wide variety of merchandise and products from brand sources other consumer goods through their stores, clearance centers and online markets. What makes this competitor stand out from the others is that it also operates general contracting construction companies, such as CDI Contractors LLC and CDI Contractors, Inc. for constructing and remodeling stores (CNN Money).  Unlike Macy’s and Kohl’s, Dillard’s has had a huge increase in their revenue year-to-date by 9.16 percent.  They have consistently and progressively grown their revenue and income since 2011 from 6.1 billion dollars to 6.7 billion dollars and have managed to level out their operating expenses over the past two years (CNN Money).  Wal-Mart on the other hand, annually continues to grow in revenue and in operating expenses but both are due to the organization’s multifaceted supply and demand.  There are several key factors that Wal-Mart has that contribute to its overall success including, but not limited to, everyday low prices, selection, sustainability, and access.

The Key Success Factors Of Wal-Mart

Wal-Mart has become a success because of the detailed attention given to consumer needs.  The key factors discussed in this section are Wal-Mart’s every day low prices, product selection, sustainability and access.  Since beginning in 1962, Sam Walton’s philosophy has always been, “Always low prices” because he knew that if he could sell product essentials that people used every day at competitive prices, he’d be successful in the retail and discount store industry (Matthews, 2012).   This strategy caused the organization to begin offering the possible product price and deal every day instead of every once in a while.  Products such as toothpaste and toilet paper became an irresistible marketing strategy for consumers of these kinds of every day goods (Matthews, 2012).  Although other industry competitors began to adopt this strategy as a result of seeing how profitable Wal-Mart became, the organization coined the term “Wal-Mart – Always low prices. Always,” and has made it a vital part of every day consumer lives.   The second essential key factor of success for this organization is the selection of products made available to consumers.  Wal-Mart is known for being a one-stop-shop where consumers can shop for groceries, household toiletries, clothes, jewelry, electronics and toys for their children all while getting their vehicle serviced.  The third essential key of success is its sustainability.  In 2005, Wal-Mart announced its plans to transform into a green corporation that would be supplied by 100 percent renewable energy and cease creating waste (Matthews, 2012).  An example of how the corporation would accomplish this is reducing packaging or selling toilet paper without cardboard rolls in the middle of them (2012).  Of course, this also created a ripple effect in the industry because competitors figured that if Wal-Mart could do it then they would be able to as well.  The last essential key of success discussed in this project is access.  Access can be viewed from two spectrums as the first is in regards to location and the second is mobile access.  With over 11,000 retail units in the world, 4,322 of them are in the United States causing Wal-Mart to be the largest distributor in its industry (Wal-Mart, n.d.).  Even the smallest towns have a Wal-Mart store within driving distance and this creates a level of access that causes consumers to feel appreciated and continue to shop at the store.  The other aspect of access is one that has become more common within the past 5 years and that is the consumer’s ability to access products electronically.  This also can be viewed as a technological change that has impacted current key success factors.

A Technological Change That Has Impacted Current Key Success Factors

Some consider Wal-Mart to be the quintessential 20th century American company that has revolutionized the retail industry with critical inventions (Matthews, 2012).  By using cutting-edge innovations like information technology, Wal-Mart has revolutionized supply-chain management and according to Matthews, Wal-Mart foreshadowed 21st century innovation through its understanding of power of access (2012).  Wal-Mart is a company that is able to connect producers with consumers around the world with unimaginable efficiency and is a force for interconnectivity and globalization in a way that even many Silicon Valley firms aren’t (Matthews, 2012).  As shown above, Wal-Mart has been a leader in its industry because of its detailed attention to consumer needs, every day low prices, product selection, sustainability and access.   This will continue to occur if appreciative inquiry is used to monitor past organizational accomplishments to determine the best practices for overall success.

References

CNN Money. (n.d.). Dow Jones industrial average. Retrieved from http://money.cnn.com/data/dow30

Matthews, C. (2012). Wal-Mart at 50 Years: How Retail Giant Changed the World. TIME.com. Retrieved from http://business.time.com/2012/07/02/ten-ways-walmart-changed-the-world/slide/all/

Wal-Mart Locations Around the World. (n.d.). Retrieved from http://corporate.walmart.com/our-story/our-business/locations/

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