‘The Sacrifice of Savings’
By Luke Meyer
Background
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Sam Walton founded
Wal*Mart in 1962
Wanted to have discount
stores available to ‘small
town’ folk
Believed in treating
employees good
Walton had an intimate
knowledge of the
competition
Experienced intense
growth in a relatively short
time (stores in 47 states by
1994)
Wal*Mart Annual Sales
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1/31/72
$44.0 Million
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1/31/80
$1.2 Billion
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1/31/92
$43.9 Billion
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1/31/02
$217.8 Billion
S.W.O.T. Analysis (Strengths)
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Guaranteed low prices of
products
Substantial growth
Convenience factor – wide
range of products all in one
store and consumers are
able to shop on-line
Hours of operation
‘Traiting’– making products
available based on
customer preference
Location, location, location
Stengths Contd…
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Intimate knowledge of the
competition
Major contributor (see PDF
of 2004 contributions)
Diversification of stores –
Sam’s Clubs &
Supercenters)
International Operations
Proficient IT support –
tracks how products are
performing store by store
S.W.O.T. Analysis (Weaknesses)
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Hierarchal
advancement –
unequal opportunities
Early acceptance/use
of micro-managing
techniques
Low wages
Benefits system –
unaffordable health
care for employees
Weaknesses Contd…
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Lack of flexibility –not
as supple as specific
product focused
competitors
Immigration violations
Closing down U.S.
plants
Poor substitutes to
name brand products
Wal*Mart Greeter
Weakness or Strength???
S.W.O.T. Analysis (Opportunities)
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Mergers – forming strategic
alliances with other global
retailers
Expand globally by
implementing more stores
overseas
Work on changing the antiWal*Mart attitude – ex.
reverting back to the “Buy
American” strategy
Having more products
available to purchase online
S.W.O.T. Analysis (Threats)
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Competition from other
discounters
Concentrated price
competition – outsourcing
to low cost regions of the
world
Remaining non-unionized
Management complacency
– management is only
promoted within their
internal group
Threats Contd…
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Being #1 makes you a target for
publicity which is…
-Wal*Mart’s PR bloopers
http://money.cnn.com/galleries/2007/biz2/0701/gallery.101dumbest_wal
art/index.html
-Wal*Mart, The High Cost of Low Price
http://www.walmartmovie.com/wmtv/
-The Daily Show on Wal*Mart
http://www.onlisareinsradar.com/archives/002392.php
not always a good thing
Recommendations
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Re-evaluate internal and
external values, policies,
procedures etc.
Weed out bad
management – those who
employ unequal
opportunities
Cut spending and invest in
associates
Re-adopt buy ‘America
Made’ (only 15% off all
Wal*Mart products are
made in the USA)