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Overview When Sam Walton founded the first Wal-Mart in 1962, the idea of bringing in a discount-shopping store into rural America was almost unheard of, except for the local five and dime stores. When Walton noticed that he had a lot of competition from regional discount chains, him and his wife Helen traveled the country to study other new retailing concepts, and were convinced that it was the wave of the future. With Walton's vision, Wal-Mart grew to be a multi-billion dollar, international company, operating about 4, 600 stores around the world. Wal-Mart competes in many industries that include: 5331 - Retail-Variety stores, 5411 -Grocery stores, 5311 -Department stores, 5812 -Eating Places, 5399 -Miscellaneous General Merchandise store, and 5912 -Drug stores and Proprietary stores. Since there are several industries to choose from, our group chose to go with retail-variety stores, SIC code 5331. These establishments are primarily engaged in the retail sale of a variety of merchandise in the low and popular price ranges.
Sales are made on a cash and carry basis, with the open-selling method of display and customer selection of merchandise. Wal-Mart's milestones began in 1962 when the first Wal-Mart was opened in Rogers, Arkansas. Seven years later the company incorporated as Wal-Mart Stores, Inc. Then a year later they opened the first distribution center and home office in Bentonville, Arkansas, and also went public on the New York Stock Exchange. Several years later, in 1988, the first super center was opened.
Then in 1991, the first international unit was opened in Mexico City. By the turn of the century, Discount Store News had named Wal-Mart "Retailer of the Century" and made Fortune magazine's lists of the "Most Admired Companies in America" and the " 100 Best Companies to Work For. " They were also ranked on Financial Times' "Most Respected in the World" list. In 2002, Wal-Mart became number one on the Fortune 500 list and was presented with the Ron Brown Award for Corporate Leadership, a presidential award that recognizes companies for outstanding achievement in employee and community relations. Mission Statement Wal-Mart Stores, Inc. does not have a formal mission statement. This is because Kim Ellis, the Public Relations Coordinator, said that they believe the customers are more interested in other aspects of the business, and they, the company, are focused on meeting their basic consumer needs.
Since Wal-Mart does not have a mission statement our group has created a mission statement that they might use. It discusses all nine components of a mission statement. This is the mission statement we have established: Our first responsibility is to provide all consumers the best products and services with guaranteed satisfaction under one roof. Wal-Mart provides a wide array of products like toys, electronics, groceries, jewelry, ladies, men, and children's apparel, and hard goods at reasonable prices. We will continue to offer scholarships to deserving high school graduates in hopes of providing students with a well-deserved education.
Consumers have been conveniently provided with on-line shopping, but also with the concept of "one-stop shopping. " The Wal-Mart team is devoted to everything that Wal-Mart has accomplished as a universal competitor. We are dedicated to recruiting, rewarding, and retaining employees of good moral standing by providing benefits for excellent performance, providing clean environments to work in, and by providing equal opportunity for all individuals. We will continue to offer the highest quality products at the lowest price to strive to be the best in the retail industry. Components of Mission Statement In the mission statement we target our customers by saying: "Our first responsibility is to provide all consumers the best products and services. " Their customers are their number one priority. Customers keep Wal-Mart in business, so of course they would want to offer them their best products and services. The mission statement targets products or services by saying: "Wal-Mart provides a wide array of products like toys, electronics, groceries, jewelry, ladies, men, and children's apparel, and hard goods. " Wal-Mart has so many different types of products and services that a list of the basic departments needed to be listed.
These products are their main service. Their concern for public image is stated: "We will continue to offer scholarships to deserving high-school graduates. " Wal-Mart intends to make the future better. They want to see more high-school graduates go on to college and make something of themselves. By offering scholarships, it helps these graduates to pursue their dreams for a better future. The mission statement mentions technology in that: "Consumers have been conveniently provided not only with the use of on-line shopping. " On-line shopping is becoming the main way for a lot of people to do their shopping.
Technology is making on-line shopping as easy as possible so people do not have to leave the privacy of their own homes and, in turn, they get to spend more time with their families. The mission statement aims at markets by saying: "Wal-Mart is accomplished as a universal competitor. " Wal-Mart has stores worldwide. They have conquered the international market. They are the number one retail-variety store in the world. The mission statement shows a concern for employees by saying: "We are dedicated to recruiting, rewarding, and retaining employees of good moral standing. " They want their employees to know that they actually have a reason for coming to work. Without employees, Wal-Mart would not exist.
They show their employees that they care about them and their needs. The mission statement talks about self-concept with the statement: "By providing benefits for excellent performance, providing clean environments to work in, and by providing equal-opportunity for all individuals. " Wal-Mart hires anyone who is capable of doing their job. You see this each and every time you walk into a Wal-Mart or see a commercial on television. The mission statement talks about their philosophy in that "We will continue to offer the highest quality products at the lowest prices. " Wal-Mart's slogan is low prices everyday. If a competitor has a product at a lower price Wal-Mart will match it, just so they can live up to their philosophy. The mission statement talks about the concern for survival, growth, and profitability in that they "Strive to be the best in the retail industry. " Wal-Mart does this each and everyday by opening new stores and having the lowest prices.
Hardly anyone goes to a store and buys a product at a higher price when they know they can get it for less. This is how they are striving to be the best. External Analysis: Opportunities Economic An opportunity available to the industry is the free trade zone. When the government enters into new trade agreements with foreign countries, businesses in the United States have the ability to offer products from these countries in their stores.
This simply increases the markets available to retailers. Social, cultural, demographic, and environmental An opportunity facing the industry is that customers want ease of shopping. To provide the ease of shopping the industry is guaranteeing that the customers will find what they want when they want it. This is supported by convenient presentation and the right level of service every time the customer shops. Political, legal, and government An opportunity facing the industry is that the Asian market is virtually untapped by the retail world. By having an untapped market it gives a huge opportunity for companies to expand.
It promises unlimited potential for growth and profits. Technological An opportunity facing the industry is that internet shopping is growing. To take advantage of internet shopping, the industry is focused around the customer. The customer receives friendly site designs, efficient order fulfillment, fast delivery and professional customer response.
They process returns, refunds, and rebates quickly. Competitive An opportunity facing the industry is that the value of money is weakening. The weakening value of money will help the industry because it reduces the ability of foreign manufactures to offer discounts. External Analysis: Threats Economic A threat is that the economy is very slow right now. There is no way of preventing it and no way to change it.
This impacts all businesses and causes profit margins to be reduced as price-cutting ensues to attract more consumers. Social, cultural, demographic, and environmental A threat is customer theft. Manufacturers are fighting back against customer theft by embedding paper clip sized antitheft tags, called electronic article surveillance labels, inside products and packaging. Called source tagging, the process offers several major benefits. For one, merchandise tagged on the factory floor during manufacture or packaging lets retail employees spend less time in the storeroom applying labels and more time on the show floor helping customers.
Also, high-theft merchandise previously displayed behind glass can now sit out in the open, boosting sales significantly. Another social, cultural, demographic, and environmental threat is employee theft. Along with antitheft labels there are radio-frequency circuits that are hidden in packages and go unnoticed. The only time they will go off is when the bar code scanner does not deactivate the circuit, which means they stole it. This helps to prevent the two forms of employee theft, which are sweat hearing and sliding.
Sweat hearing is when the employee charges the customer less than the actual price and sliding is when the employee covers the barcode at the point of sale. Political, legal, and governmental A threat is the Chinese regulations. China has one of the largest populations in the world; however, the Chinese government does not take kindly to opening their country to foreign establishments. Also, there is rampant corruption among the Chinese, and they have no generally accepted accounting principles. Technological A threat facing the industry is that technological advances may make the products obsolescent. As technology advances, products being sold today are gone tomorrow; this provides less products for retailers to sell.
Competitive A threat is that the industry is not following consumer taste. To overcome the threat of not providing consumers wants the industry is expanding rapidly in the urban centers while traditional "wet markets" are being edged out as the middle-class enlarges and young people flock to the cities. Competitive Profile Matrix A competitive profile matrix identifies a firm's major competitors and its particular strengths and weaknesses in relation to a sample firm's strategic position. The ratings are as follows: 1 major weakness, 2 minor weaknesses, 3 minor strengths, and 4 major strengths. (Figure 1 in the appendix) Compared together, Wal-Mart, Target and Kmart are very close competitors. They are all retail-variety discount stores making their existence known throughout the world, except Target, which you cannot find globally.
These three companies are constantly vying for the reputation as the lowest priced retailer. In the competitive profile matrix, the most critical success factor would be advertising with a weighted score of 0. 25. Advertising for these competitors is very critical if they want to compete against each other for the best quality products at low prices. With this, Target was scored the highest with a rating of 4 while both Wal-Mart and Kmart are rated as a 3. This is because Target does a lot more advertising then Wal-Mart and Kmart.
The next most critical success factor is global expansion with a weighted score of 0. 20. This is somewhat important if you wanted to keep up with the competitors. Wal-Mart was found to be rated the highest with a 4 with Kmart was rated next with a 3, and finally Target rated as a 2. Wal-Mart was ranked the highest because they are found around world, while Kmart was ranked next because they are only found in a few other countries. Target, ranking last, does not have any global branches. This is only a minor weakness because they really do not have to go globally because of how well they are keeping up with the competitors within the United States.
Price competitiveness and financial position are ranked next on the competitive profile matrix with a weighted score of 0. 15 each. Wal-Mart, ranking the highest in both cases with a 4, is above all competitors. This is because they price reasonably with lower prices then all the competitors and their financial position is great. Target is ranked next with a rating of 3 in both price competitiveness and financial position. Target is known to have somewhat high prices and people tend to see that and want to go shopping elsewhere like Wal-Mart.
Their financial position is not that great with the minor strength, but they are keeping up with their major competitor, Wal-Mart. Finally, Kmart is found to have a rating of a 3 in price competitiveness, and a rating of 2 in financial position. This is because Kmart does keep up with the prices of competitors, but they do get pricey in some areas. Their financial position is a minor weakness because of the Martha Stewart scandal and their bankruptcy.
Her products were being sold a lot until the scandal came out. Now they are pricing her products really low just to get the inventory sold. Next, product quality and customer loyalty is found on the competitive profile matrix to have a weighted score of 0. 10. Target is found to have a rating of 4 in product quality. In customer loyalty they have a rating of a 3.
This is because products found in Target tends to be top brand products, but at the same time, customers see these products somewhere else for a lower price and they tend to go to that place instead. Wal-Mart is ranked next with a rating of 3 in both product quality and customer loyalty. Wal-Mart may not have top brand products but the quality is fairly good. Customer loyalty is also ranked as a 3 because some people do like to get better products no matter how much it costs.
Kmart, ranked last with a 2. This is because they do not carry quality products. People tend to go...
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Research essay sample on Wal Mart Stores Mission Statement
