Wal-Mart

Principles of Management

Introduction Wal-Mart (Wal-Mart Stores, Inc.) is currently ranked not only as America’s largest, but also as the world’s largest company (Soderquist, 2005). The store’s three business segments, Wal-Mart International, Wal-Mart Stores and Sam’s Club all operate in discount retail industry. Currently Wal-Mart’s leadership is facing challenging issues including an invariable customer base, a declining same store base and a crumbling reputation. However, Wal-Mart’s history is a living example of innovative and successful leadership. The company started with a single store in 1962, in Rogers, Arkansas and it has grown into what is now regarded as the world’s largest retailer. Wal-Mart runs each store with the products stocked in the store, to the front-end equipments, helping to speed up checkouts. Using the same philosophy in all its stores to provide low prices and superior customer service, Wal-Mart can sell at low prices and thus eliminate expenses associated with frequent sales promotions as well as have predictable sales. Wal-Mart has invented its own unique inventory system, the cross-docking system that has enabled the company to achieve economies of scale, thus reducing the cost of sales. In this system, goods are continually delivered to Wal-Mart’s stores within 48 hours and without the store having to inventory them. This allows the stores to replenish their shelves four times faster than its competitors. Wal-Mart stores boost their buying power by purchasing in bulk and distribute goods without involving third parties. This paper seeks to analyze Wal-Mart’s stakeholders, the internal and external environment, its opportunities and threats and the company’s core competencies and competitive advantages. The paper will finally give a recommendation.

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