A strategic management paper on Wal-mart
Abstract Sam Walton, a leader with an innovative vision, started his own company and
made it into the leader in discount retailing that it is today. Through his savvy, and
sometimes unusual, business practices, he and his associates led the company forward for
thirty years. Today, four years after his death, the company is still growing steadily.
Wal-Mart executives continue to rely on many of the traditional goals and philosophies
that Sams legacy left behind, while simultaneously keeping one step ahead of the
ever-changing technology and methods of todays fast-paced business environment. The
organization has faced, and is still facing, a significant amount of controversy over several
different issues; however, none of these have done much more than scrape the exterior of
this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to
strike a comfortable balance between increasing its profits and recognizing its social and
ethical responsibilities.
Why is Wal-Mart so Successful? Is it Good Strategy or Good Strategy Implementation? —
In 1962, when Sam Walton opened the first Wal-Mart store in Rogers, Arkansas, no one
could have ever predicted the enormous success this small-town merchant would have.
Sam Waltons talent for discount retailing not only made Wal-Mart the worlds largest
retailer, but also the worlds number one retailer in sales. Indeed, Wal-Mart was named
Retailer of the Decade by Discount Store News in 1989, and on several occasions has been
included in Fortunes list of the 10 most admired corporations. Even with Waltons death
(after a two-year battle with bone cancer) in 1992, Wal-Marts sales continue to grow
significantly.
The Wal-Mart Philosophy — Wal-Mart is successful not only because it makes sound
strategic management decisions, but also for its innovative implementation of those
strategic decisions.
Regarded by many as the entrepreneur of the century, Walton had a reputation for caring
about his customers, his employees (or associates as he referred to them), and the
community. In order to maintain its market position in the discount retail business,
Wal-Mart executives continue to adhere to the management guidelines Sam developed.
Walton was a man of simple tastes and took a keen interest in people. He believed in three
guiding principles: 1. Customer value and service; 2. Partnership with its associates; 3.
Community involvement (The Story of Wal-Mart, 1995).
The Customer — The word always can be seen in virtually all of Wal-Marts literature. One
of Waltons deepest beliefs was that the customer is always right, and his stores are still
driven by this philosophy. When questioned about Wal-Marts secrets of success, Walton
has been quoted as saying, It has to do with our desire to exceed our customers
expectations every hour of every day (Wal-Mart Annual Report, 1994, p. 5).
The Associates — Waltons greatest accomplishment was his ability to empower, enrich, and
train his employees (Longo, 1994). He believed in listening to employees and challenging
them to come up with ideas and suggestions to make the company better. At each of the
Wal-Mart stores, signs are displayed which read, Our People Make the Difference.
Associates regularly make suggestions for cutting costs through their Yes We Can Sam
program. The sum of the savings generated by the associates actually paid for the
construction of a new store in Texas (The story of Wal-Mart, 1995). One of Wal-Marts
goals was to provide its employees with the appropriate tools to do their jobs efficiently.
The technology was not used as a means of replacing existing employees, but to provide
them with a means to succeed in the retail market (Thompson & Strickland, 1995).
The Community — Wal-Marts popularity can be linked to its hometown identity. Walton
believed that every customer should be greeted upon entering a store, and that each store
should be a reflection of the values of its customers and its community. Wal-Mart is
involved in many community outreach programs and has launched several national efforts
through industrial development grants.
What are the Key Features of Wal-Marts Approach to Implementing the Strategy Put
Together by Sam Walton — The key features of Wal-Marts approach to implementing the
strategy put together by Sam Walton emphasizes building solid working relationships with
both suppliers and employees, being aware and taking notice of the most intricate details in
store layouts and merchandising techniques, capitalizing on every cost saving opportunity,
and creating a high performance spirit. This strategic formula is used to provide customers
access to quality goods, to make these goods available when and where customers want
them, to develop a cost structure that enables competitive pricing, and to build and
maintain a reputation for absolute trustworthiness (Stalk, Evan, & Shulman, 1992).
Wal-Mart stores operate according to their Everyday Low Price philosophy. Wal-Mart has
emerged as the industry leader because it has been better at containing its costs which has
allowed it to pass on the savings to its customers. Wal-Mart has become a capabilities
competitor. It continues to improve upon its key business processes, managing them
centrally and investing in them heavily for the long term payback.
Wal-Mart has been regarded as an industry leader in testing, adapting, and applying a wide
range of cutting-edge merchandising approaches (Thompson & Strickland, 1995, p. 860).
Walton proved to be a visionary leader and was known for his ability to quickly learn from
his competitors successes and failures. In fact, the founder of Kmart once claimed that
Walton not only copied our concepts, he strengthened them. Sam just took the ball and ran
