“Basic History Overview”
Wal-Marts history is one of innovation, leadership and success. It started with a single
store in Rogers, Arkansas in 1962 and has grown to what is now the worlds largest – and
arguably, the most emulated – retailer. Some researchers refer to Wal-Mart as the industry
trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000
stores and more than 750,000 employees worldwide. Wal-Mart operates each store, from
the products it stocks, to the front-end equipment that helps speed checkout, with the same
philosophy: provide everyday low prices and superior customer service. Lower prices also
eliminate the expense of frequent sales promotions and sales are more predictable.
Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross
docking has enabled Wal-Mart to achieve economies of scale which reduce its costs of
sales. With this system, goods are continuously delivered to stores within 48 hours and
often without having to inventory them. This allows Wal-Mart to replenish the shelves 4
times faster than its competition. Wal-Marts ability to replenish theirs shelves four times
faster than its competition is just another advantage they have over competition. Wal-Mart
leverages its buying power through purchasing in bulks and distributing the goods on its
own. Wal-Mart guarantees everyday low prices and considers them the one stop shop.
Case Overview
The case study starts off with quotes from Wal-Mart executives with their thoughts of how
employees/consumers should feel about the arguably most innovative retailer. “Wal-Mart
employees who do not think globally are working for the wrong company.” “Wal-Mart
must think and act as if its a global company. Otherwise, it cannot grow enough in the
United States to maintain its stock price. It needs to be in South America. It needs to be in
Asia. It needs to be in Europe.”
Wal-Mart has taken their mind and cash over the last 20 years to become the worlds largest
retailer. Wal-Mart had a base of 2,200 stores in the 80s, closing out of the 90s with a bang
of 3,600 stores and $4.4 billion in net income. Spurred by NAFTA, Wal-Mart took
advantage foreseeing potential growth in the foreign markets. Currently they have stories
in the following countries: Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea,
United Kingdom, and in 1998 a controversial Germany. Most analysts believed Wal-Mart
would move into eastern European countries however Wal-Mart confounded the analysts
when they purchased a 21-unit Werkauf chain in Germany. Why Germany they ask? The
