‘The Sacrifice of Savings’ By Luke Meyer

Background 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 1/31/72$44.0 Million 1/31/80$1.2 Billion 1/31/92$43.9 Billion 1/31/02$217.8 Billion

S.W.O.T. Analysis (Strengths) 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… 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) Hierarchal advancement – unequal opportunities Early acceptance/use of micro-managing techniques Low wages Benefits system – unaffordable health care for employees

Weaknesses Contd… 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) Mergers – forming strategic alliances with other global retailers Expand globally by implementing more stores overseas Work on changing the anti- Wal*Mart attitude – ex. reverting back to the “Buy American” strategy Having more products available to purchase on- line

S.W.O.T. Analysis (Threats) 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… Being #1 makes you a target for publicity which is… -Wal*Mart’s PR bloopers art/index.html -Wal*Mart, The High Cost of Low Price -The Daily Show on Wal*Mart not always a good thing

Recommendations 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)