Wal-Mart Strategic Audit
Strategic Management 479
Wal-Mart Executive Summary
Wal-Mart was founded in 1962 by a man named Samuel Moore Walton. He was considered “one of the most influential retailers of the century” (Wheelen & Hunger, 740). Sam Walton started his retail career in management in 1940 with J.C. Penney Co. His training and hard work at J.C. Penney Co. led him to his great Wal-Mart idea. He decided that small town populations would welcome, and make profitable, large discount shopping stores. When Sam Walton created Wal-Mart in 1962, he declared that three policy goals would define his business: “respect for the individual, service to customers, and striving for excellence” (Walmartstores.com).
Wal-Mart stores “sold nationally advertised, well-known-brand merchandise at low prices in austere surroundings” (Wheelen & Hunger, 738). The 1970’s marked significant growth for Wal-Mart with its first Wal-Mart Distribution Center as well as the Wal-Mart Home Office. By the end of 1979, there were 276 Wal-Mart stores in 11 states and in 1991, the firm had 1,573 stores in 35 states to include the international market. Wal-Mart sales growth continued into the 1980s. Wal-Mart was divided into three business segments: Wal-Mart stores, Sam’s Clubs, and the International Division.
In 1983 the company opened its first three Sam's Wholesale Clubs and began its expansion into bigger city markets. Wal-Mart Supercenters were large combination stores that included a full-line grocery center, a general merchandise discount store, banks and some even offered a food court of restaurants. Wal-Mart’s international expansion accelerated management’s plans for expansion and notoriety. In 2000, Fortune magazine named it as one of the “100 Best Places to Work” and in 2002, “Wal-Mart officially became the world’s largest company based on its $245 billion in sales” (Wheelen & Hunger, 731).
Wal-Mart’s winning strategy in the United States was based on selling brand products at low cost while still offering the customer a quality product. Wal-Mart is in the business of selling everything customers need in their everyday lives. This includes the consumer goods listed above as well as food-service items. Wal-Mart took pride in its domestic strategies and programs that were based on a set of two priorities: 1) “Customers would be provided with what they want, when they want it, all at a value”. 2) “Treating each other as we would hope to be treated, acknowledging our total dependency on our Associate-partners to sustain our success” (Wheelen & Hunger, 747).
In the year ending January 31, 2006, Wal-Mart’s financials reflected the following: (all dollar amounts are in millions)
· Total revenue - $315, 654
· Net income - $11,231
· Total assets - $138,187
· Total liabilities - $48,826
· Total shareholder’s equity - $53,171. According to the 2006 consolidated balance sheets total liabilities and...