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WAL-MART OPM 864 Final Project April 29, 2003 By Jason Winne, Alan Powe & Walter Howard Background Wal-Mart is in the business of serving customers. In the United States, their operations are centered operating retail stores and membership warehouse clubs. International, they are centered on retail stores, warehouse clubs and restaurants. Their business is to offer customers quality merchandise at low prices. Wal-Mart mission is to be the place where prices are low and value and customer service are high everyday. Customers do not have to wait for a sale to realize savings because Wal-Mart carefully controls expenses to maintain their low price structure. Wal-Mart has stores in all 50 states, seven foreign countries and one U.S. territory. They feature more than 40 general-merchandise categories including an apparel & accessory department, lawn & garden center, health & beauty aids department and electronics. Many stores also feature a pharmacy, shoe department, fine jewelry and a Tire & Lube Express Service. Wal-Mart is able to lower the cost of merchandise through negotiations with suppliers and by efficiently managing their distribution network. The key to Wal-Mart’s success is their ability to grow their base business. In the U.S. they grow their base business by building new stores and by increasing sales in their existing stores. International, they grow by building new stores, increasing sales in their existing stores also. History Sam Walton, the founder of Wal-Mart owned variety stores. As Sam Walton expanded he began to experiment with large variety stores, which he named Walton’s Family Centers. The first Family Center store opened in 1962 in St. Robert, Missouri, a town with a population of 1,500. The original store, which was 13,000 square feet size, had to be increased to 20,000 square feet in less than a year, and its annual sales volume of $2 million made it the nation’s second largest Ben Franklin store in terms of sales. The St. Robert outlets demonstrated that a store in a small town could attract a large number of customers from considerable distances and generate a substantial volume of business if it offered a wide assortment of goods at reasonable prices. Based on the success of the St. Robert store, Walton opened a second, 13,000 square foot Family Center in Berryville, Arkansas, a town with a population of 2,000, and a third such outlet in Bentonville. By 1962, Walton and his brother owned and operated 16 variety stores in Arkansas, Missouri, and Kansas, making theirs the largest independent variety-store chain in the nation. From Sam Walton’s ideas and management techniques is how Wal-Mart got created. The reason for its popular success it still follows Sam Walton's values: by hometown identity, each person is welcomed personally, each store honors a graduating high school senior with a college scholarship, bake sales to benefit a local charity, associates determine where charitable funds are donated, and the prices are low and customers do not have to wait for a sale to see savings. Wal-Mart goes according to what Sam Walton believed, "Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community." (The Wal-Mart Story). Market Analysis Wal-Mart and each of its operating segments had net sales (in millions) for the three fiscals years ended January 31, 2003 as follows: Fiscal Year Wal-Mart Stores SAM’S CLUB International Other Total Company Total Company Increase from Prior Fiscal Year 2003 $ 157,121 $ 31,702 $ 40,794 $ 14,907 $ 244,524 12% 2002 139,131 29,395 35,485 13,788 217,799 14% 2001 121,889 26,798 32,100 10,542 191,329 16% Wal-Mart net sales grew by 12% in fiscal 2003 when compared with fiscal 2002.
Approximate Word count = 2253
Approximate Pages = 9
(250 words per page double spaced)
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