Wal-Mart Stores, Inc (Wal-Mart), headquartered Bentonville, AR, was founded by Sam Walton in 1962, with his first store opening in Rogers, AK. To date, Wal-Mart leads the world in the retail industry and is the world’s largest company with 3,700 stores nationwide, 1,500 stores throughout the world, and Wal-Mart employs 1.6 million associates worldwide. Wal-Mart divisions include Wal-Mart Supercenters, Discount Stores, Neighborhood Markets, and Sam’s Club Warehouses and Wal-Mart also operates online. Wal-Mart’s corporate management strategy is to sell high quality and brand name products at the lowest price possible (Vance, 119). To keep low prices, Wal-Mart reduces costs by using advanced electronic technology and warehousing. Wal-Mart deals directly from manufacturers in turn eliminating the middleman (Vance, 72).
Wal-Mart’s international division accounts for over 25% percent of its sales and that percentage is steadily increasing. In 2010, Wal-Mart was the number one retailer in Mexico as well as Canada. Wal-Mart also operates wholly owned subsidiaries operating in Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom. Wal-Mart has majority-owned subsidiaries operating in five countries in Central America, and in Chile and Mexico; with joint ventures in India and China (walmart.com). Wal-Mart’s strategic sales and planning have made them the largest retailer not only in the world but in history.
In 1991, Wal-Mart went global by opening its first international store in Mexico. After announcing going global, Wal-Mart received much criticism. Despite the criticism, Wal-Mart continued to move forward, however, Wal-Mart did encountered problems along the way such as high prices, lack of building spaces, poor transportation to deliver goods, stocking prices and had conflicts with suppliers. Since then Wal-Mart has developed strategies to fit in with needs and desires of that individual country.
Europe is one country where Wal-Mart could not stay afloat. Wal-Mart failed to see they could not expect to adopt the same practices in Europe or any of the other countries where Wal-Mart is located, used in the United States. The same strategy of low cost did not apply to Europe because there were already low-cost stores in Europe. Europe laws also mandated that stores close a certain time at night, so Wal-Mart could not 24 hours in Europe. Also, most of the stores were not opened on Saturday and Sunday in Europe.
One of the reasons Wal-Mart failed in Germany is they failed to do the needed research for that country’s retail market. Taking such a risk could affect the company’s ability to operate within that country and could significantly impact profits. The important thing to do is to thoroughly research potential political risks and take an assessment. That research should include extensive knowledge of the country’s government. Managing political risk help the company protects the company’s investments and operations. It will also help management anticipate the possible business risk implications caused by political change or instability in that country (www.pwc.com).
Wal-Mart stakeholders are labeled into 2 groups, market and non-market. The non-market group is composed of stockholders, Wal-Mart Executives, wal-mart employees, wal-mart communities, customers, non-profit organizations, online and gasoline retailers all who own Wal-Mart shares and are interested in their investments. The non-market group consists of unions, international retail stores, and politicians. These individuals have an economic stake political stake in what course the company takes. To sum it up, Wal-Mart stakeholders are the customers, associates and suppliers (walmartstores.com).
Code of Conduct
Wal-Mart’s code of conduct promises to ensure that its worker is provided a workplace free of and its customers. The purpose of Wal-Mart code of conduct is protecting themselves as well as the employees. It in factories, Not only will it bring opportunities for a better life in the countries where Wal-Mart operates but will also strengthen the outcome of positive labor and environmental practices.
The Wal-Mart foundation provides many non-profit organizations with funding. One of these organizations is the Hunger Relief foundation. The Hunger Relief Foundations assist in feeding the hungry worldwide. The Wal-Mart foundation is committed in helping to combat hunger by providing meals to those who do not know where their next meal is coming from. As of date, Wal-Mart has taken the lead in Hunger Relief by providing hunger relief grants to communities throughout the United States.
Monitoring and protecting their investment, Wal-Mart should continue using the same strategies they are currently using and that is keeping prices at low cost which gives them a huge advantage among their competitors. Although Wal-Mart refuses to become unionized, it is something that Wal-Mart should consider.
Saving money by providing the lowest prices on everything from food to gardening equipment, and everything in between, was the goal Sam Walton envisioned when he opened his first Wal-Mart store. Today, Wal-Mart is the number one retailer in the United States. It is at the top of the Fortune 500 listing. Wal-Mart’s is proud of its ability to maintain lower prices. Wal-Mart will continue to leverage volume buying power will never compromise on commitment and quality merchandise. Wal-Mart will continue to reign as the industry’s leader in retail and as the world’s largest company (walmartstores.com).