Running head: WALMART SUPPLY CHAIN 1
Executive Summary
Walmart Company was established in 1962 by Sam Walton. The company has enjoyed many
successes by installing over 11,000 stores globally. Since the time Walmart became an
international brand, Walmart has survived through the market through its main strategy of EDLP
(everyday low prices). The strategy has been the core means of operation for Walmart as
Walmart has penetrated the market with lower prices than the actual retail prices. The
procurement and distribution play an integral role in the Walmart company for it involve the
process of acquiring the various goods and also finding an effective method of distributing the
products from the various stores to their consumers. The first strategy was reducing supplier
costs. Walmart’s emphasis on this strategy is to cut out the intermediary from the business. The
presence of an intermediary is a cost consideration for it shall involve paying for the
intermediary services. Managing the inventory also needs an understanding of the types of
inventory present at Walmart. Understanding the type of inventory is crucial in the supply chain
for each inventory serves its integral purpose in the supply chain. The most notable information
technology methods that Walmart uses is the CPFR (collaborative planning, forecasting, and
replenishing system, as well as the vendor, managed inventory. These two information
technology systems have been a success in merging the company with the suppliers and
distributors.
Introduction
In 1962, Sam Walton established one store in Arkansas as it later became the first-ever Walmart
stall in America. The first stall that Sam Walter opened was located in Roger in Arkansas.
During the launch of the first Walmart stall, Sam Walton had the objective of making a change
for the American citizens by offering retail services for his customers. Moreover, Sam Walton
had the same objective of making a change in the lives of Americans by promising a good
WALMART SUPPLY CHAIN 2
livelihood and a life where the customers would engage with Walmart and have value for their
hard-earned money.
Company History
Sam Walton opened the first Walmart stall in Roger, Arkansas in 1962. After years of engaging
in business, Walmart managed to open a further 24 stores in America. The stores came five years
later after the establishment of Walmart and managed to generate approximately twelve million
dollars in sales (Inc., 2020).
After the major success followed by the increased sales in the store, Walmart becomes an
incorporated company in 1969. It was during this time that the name of the business changed to
Wal-Mart Stores, Inc. The following year, 1970, the Wal-Mart stores entered the stock market as
a publicly-traded company where the initial stock or the initial public offering being sold at
$16.50 per share (Inc., 2020).
During the following year, Walmart launched its first distribution center in Bentonville,
Arkansas as well as their Home Office in the same location. In 1972, due to its vast and
immediate success, Walmart becomes listed on the New York Stock exchange market. By this
time, the Walmart stores had intensively expanded and they were now having fifty-one stores
and engaging in over 75 million dollars in sales during 1972.
As the Walmart store kept on rising and mushrooming in most parts of the country, their
business operations kept on making more sales as they were able to make sales reaching one
billion in their yearly sales in 1980. By that time, Walmart not only increased in annual sales but
also managed to open more stores as they reached two hundred and seventy-six while employing
around twenty-one thousand associates by that time. In addition, it was among the first
companies to make over a billion annual sales during the same time (Inc., 2020).
The retail service for Walmart continued to escalate as it was able to open other centers in
Washington and Missouri. Furthermore, they continued to open more stores in Mexico by 1991.
In a1992, Walmart had a total of over three hundred and seventy thousand associates while
opened 1928 stores both locally and internationally. With the increased business intensity,
Walmart was able to make a billion-dollar sales in one week during 1993. Further expansions of
Walmart continued in Canada and China as it was able to make it’s first a hundred-billion annual
sales back in 1997 (Inc., 2020).
By 2000, Walmart was able to employ more than one million people as the number of stores
increased to 3989 both locally and internationally. With the increase in sales and revenue
generation, Walmart became among the top 500 companies in America where Walmart topped
the listing in 2002 (Inc., 2020).
By 2015, Walmart had already surpassed the 10,000 worldwide stores as it scaled its operations
in over 27 countries and having over 11,000 stores as well as offering employment to over 2.3
million associates globally. Furthermore, there was an increase in the minimum wages to nine
dollars per hour as the company ventured into training programs for the associates. The company
also had a weekly customer base of over two hundred million (Inc., 2020).
WALMART SUPPLY CHAIN 3
In 2018, Walmart Stores Inc changed its name again to Walmart Inc. where the company
proposed and implemented a new minimum wage of eleven dollars an hour as the company
focused on reaching out on maternity and parental care (Inc., 2020).
Vision and Mission of Walmart
Walmart has an objective of being the biggest, most established as well as the most established
retail company in the world. The vision of Walmart revolves around offering a wide supply of
products within the affordability capacity of the consumers with a general business idea of
offering efficiency in their services to have a global outreach and increase their capital
investment.
Walmart has a mission of improving its operational scales and encouraging both regional and
global retaining services. While encouraging such retaining services, Walmart has made the
mission achievable by adding on the aspect of saving the retail prices to their customers.
Company Structure
The company as well as the organizational structure is responsible for steering the activities of
Walmart. The main activities in the Walmart Company entail and revolve mainly through their
key retailing business. The main company structure helps the company make policies that play a
key role in handling the operations of the business (Lombardo, 2019).
An analysis of the Walmart organization culture determines the process of solving the challenges
arising in the working environment. Furthermore, the same company structure is essential for
adopting and equipping the company’s long-term goals as well as adapting to the changes in the
business model and also changes in the international market. Evidence for such success is the
transitioning nature of the business since its launch in 1962. Furthermore, an effective company
structure has made the company survive in the competitive market and competition from other
companies like Apple and Amazon (Lombardo, 2019).
The main company structure for Walmart is the hierarchal functional organizational structure
where the structure incorporates both the hierarchical structure and the functional structure. The
hierarchical system of Walmart involves section heads where there are supervisors in charge of
the employer. The employees address the issues to their immediate supervisors. The functional
section of Walmart is where the employees are in their respective duties and obligations. In the
functional company structure, there are departments involved in their respective functions such
as information technology, marketing (Lombardo, 2019).
For the success of the company, the hierarchical functional structure has to make the necessary
sanctions, policies, and rules that have a huge influence on Walmart. The hierarchical functional
structure has the main role of monitoring and taking charge of all the entire operations of the
Walmart business (Lombardo, 2019).
The company structure has four key cultural components. They include the following
(Lombardo, 2019);
• Customer services. For a company like Walmart, the customers are the main component
of the business. The customers are the main consumers in the business, meaning that
Walmart should mainly focus on their customers.
WALMART SUPPLY CHAIN 4
• Respect for employers. Walmart priorities on its employees by positive interactions with
their staff. The respect for the employees makes each of them maximize their
productivity and fulfill their roles with diligence.
• Striving for excellence. Through their interactions with the employees, supervisors, and
the organization, Walmart strives to achieve the most of the business and the contribution
of each member in the Walmart workforce.
• Action with integrity. Walmart engages in ethical business practices while maintaining
honesty, transparency, and integrity in both the operation of the business and the process
of making decisions for the company.
Analysis
Walmart Business Strategy
Walmart is listed among the most successful companies in the world due to its ability to stay
relevant and able to change with changes in both the business structure and international market.
Since the time Walmart became an international brand, Walmart has survived through the market
through its main strategy of EDLP (everyday low prices). The strategy has been the core means
of operation for Walmart as Walmart has penetrated the market with lower prices than the actual
retail prices (Pratap, 2020).
The EDLP strategy involves selling its vast products at a slightly lower price than the actual
retail price in both the regional market and international markets. This strategy is effective in the
current market structure of offering convenient products, quality products, and at a lower price
for affordability (Pratap, 2020). The EDLP method is an effective strategy for it makes the
