Wal-Mart is one of the largest retail companies in the world. It was founded in 1962 by Sam Walton. The headquarter of this company is situated in the United States. The main aim of the company is to provide consistent discounts, loyal customer service, and fast friendly service. Walmart’s targets to expand its business in large cities as well as spread retail stores throughout the world. The retail stores of Walmart are divided into four divisions Walmart Supercentres, Discount Stores, Neighborhood Markets, and Sam’s Clubs warehouses. More than 100 million customers are visiting these Wal-Mart Stores.
It is very uncomfortable for small merchants and communities in America. Wal-Mart reaches their town and provides low-cost offers and best customer service. It is a very bad condition for small merchants and businessmen in America. To downtown merchants, Wal-Mart just comes and takes over all the small stores.
The purchasing power, aggressive marketing and provide low prices to the customer by Wal-Mart, tend to pull out the business by the small merchants. Gradually the dream of Wal-Mart company to become the largest retailer in the world is full filing day-by-day. But, they increase their business by the wrong actions and do not respect the culture or language of the communities.
Timeline events of Wal-Mart company
- 1960:- Sam Walton opened his first discount store in Rogers, Arkansas.
- 1981:- Wal-Mart become the largest company in America.
- 1981:- After becoming the largest company in America, they opened their stores in a small Louisiana town.
- 1983:- Wal-Mart opened its stores in Pawhuska and Oklahoma.
- 1986:- Wal-Mart claims that he can restore more than 4000 jobs to American Communities.
- 1989:- They drive a campaign about Environmental awareness that Wal-Mart is aware of land, water, and air.
- 1990:- There are some activist groups against the expansion of Wal-Mart’s store.
- 31st December 1990:- Wal-Mart’s closed its stores in Louisiana.
- 5th November 1991:- Wal-Mart opened up its store in Lowa City.
- 6th October 1998:- Wal-Mart’s founder Sam Walton created a family charity named Walton Family Charitable Support Foundation.
- June 1999:- Wal-Mart takes over the Asda Chain, now they have stores and depots across the United States.
- 2001:- Wal-MArt becomes the world’s largest retailer, got a huge sales of $191 billion.
- July 2003:- Wal-Mart opened its stores in Beijing and till now they have 22 stores in China and counting.
- 2006:- Wal-Mart closed its stores in Germany.
- July 2007:- Wal-Mart is operating more than 2500 retail units in Wal-Mart International and more than 500,000 employers in some countries.
- 2007:- By the ending of this year, they got a net $45 billion sales.
- 2008:- Wal-Mart’s opened its wholesale facility in India.
This timeline can make a clear understanding of the ending of this case study.
Business Model of Wal-Mart
The business model of Wal-Mart is based to eliminate the middleman from the distribution channels. The advantage after removing the middleman is to provide benefit to the consumer by providing products at lower costs. The main motive of the Walmart business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.
The main marketing strategy of the company is based on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price.
Wal-Mart has three important sections:-
Wal-Mart U.S is operated in the U.S. They provide customers with products and services that are not present physically in stores. They provide their services via the website and mobile application. The website of Wal-Mart company has a special feature that provides a third party to sell products. The company operates its business in various platforms like supermarkets, discount stores, neighborhood markets, and e-commerce websites.
Wal-Mart International is also divided into three sections which are retailers, wholesalers, and other small projects. These sections are also divided into various sections such as supermarkets, warehouses, electronics, apparel stores, drug stores, digital retailers, and many more.
It is the online platform of Wal-Mart’s company i.e., “samsclub.com”. This club is consists of memberships of the only warehouse retailer operations. This section includes warehouse clubs in the U.S, as well as samsclub.com.
Revenue Generation:- How Wal-marts earns
The earning model of Wal-Mart’s deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning. Wal-Mart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business. The two main sources of revenue are Product revenue and Service revenue.
Wal-Mart has a wide range of products in various categories:-
- In the grocery category, they have products like Daily needs products, dairy products, frozen foods, bakery, baby products, beauty aids, and many more.
- Health and wellness category have products like Pharmacy products and clinical services.
- Entertainment category has products like electronics products, toys, cameras, movies, music, videos, and books.
- Stationary, paints, and hardware, Automotive, sporting goods, crafts, and seasonal merchandise.
- Apparel categories include apparel for men, women, boys, girls, shoes,jewellery, and accessories.
- Home appliances include home furnishing services, home decor, livings, and horticulture.
Wal-Mart also provide services to generate revenue in various fields:-
- They provide financial services like prepaid cards, money orders, wire transfer, money transfer, bill payments, and so on.
- VUDU movie streaming services:- This is a subscription-based OTT platform for buying and renting movies, watching TV shows on demand.
- Clinical Sevices include primary health care, Physical and Wellness checks, Clinical lab tests.
- Health Insurance services
Wal-Mart’s Marketing Strategy
Walmart business strategy analysis is one of the most important parts of any business whether it is small or large. It is very important to make an effective marketing plan to survive in the market. Wal-Mart uses the principle of business marketing penetration method which is used to capture the market by offering lower prices and competitive prices to the consumers.
The company follows the cost leadership which makes a huge profit for the company. The company provide low prices to the consumer and treated all the customer as king of the market to maintain the relationship between Wal-Mart and the customer.
According to Wal-Mart, there are four factors that drive the customer’s choice of retailer are:- Price, Access, Experience, and assortment.
In 2018, Wal-Mart takes 77% stakes in India’s largest e-commerce company Flipkart and makes the world’s biggest purchase of an e-commerce company. Flipkart is one of the leading Indian e-commerce brands.
The three main reasons for the acquisition of Flipkart is Flipkart’s leadership in some lucrative sections, it’s a payment platform and the company’s talent pool.
Wal-Mart’s world’s largest company is to continue to expand its business by improving its strategies day-by-day. The main reason in success of Wal-Mart is the EDLP system i.e., Everyday Low Price. They are working aggressively to maintain the profits, market shares, and providing low prices to consumers.
One more reason for the success of Wal-Mart’s is purchasing products from local manufactures in a bulk in one go and selling in small quantities. Buying from local manufactures is the benefit for both. Buying more products from local manufacturers means they are creating more jobs and they reduce the unemployment rate. They should provide good quality products at a lower price to maintain a good relationship with customers and continue to get profits in business.