“Wal-Mart Stores Inc. is the largest company in the United States” . Wal-Mart originally opened in 1962 in Rodgers Arkansas, by Sam Walton. Sam Walton stayed dedicated to making a difference in the lives of customers from all. “Walton knew that by keeping costs low and prices lowest, he would have a successful retailing model” (Springer, 2010, pg. 20). “His leadership laid the groundwork for the company to become one of the world's largest and most successful corporations that have ever existed, and the largest food retailer in the U.S” (Springer, 2010, pg. 20). “The company changed food retailing in ways that have forced all other players to react in one way or another to the company's unwavering focus on being a low-price leader” (Springer, 2010, pg. 20). “However, in spite of topping the Fortune 500 list, the company has been battling a drop in sales at its US stores for the last several quarters and in spite of profits and increases in revenues at its global operation, Wal-Mart Stores has been struggling in the US” (Business Wire). In my current position as a mutual fund manager and looking to invest in a superior company. Based on researching Fortune 500 companies I was drawn to Wal-Mart to see how this company has managed to stay in the top of the 500 Fortune list.
SWOT Analysis The best way to learn more about this billion dollar business is to conduct a SWOT Analysis. “SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture” (Business Wire). “This involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective” (Business Week). Wal-Mart is such a large company with more than two million employees throughout the US it is important to see how the company continues to stay profitable.
Wal-Mart Strengths The strengths of the company starts with the “market leader with an unprecedented scale and wide product assortment Wal-Mart is the largest retailer in the world” (DataMonitor, 2011, pg.5). “The company was ranked first by Fortune 500 on the list of America’s largest corporations, as well as on the list of world’s largest corporations in 2011” (DataMonitor, 2011, pg.5). “The company had more than $400 billion in revenue, over $25 billion in operating income, 8,970 stores, and more than 984,949 square feet of space at the end of the FY2011” (DataMonitor, 2011, pg.5). There are no companies that can compete with Wal-Mart size. “The company dominates the US retail landscape and is growing internationally at a constant pace” (DataMonitor, 2011, pg.5). “Wal-Mart being a market leader is able to replicate its best practices constantly on an unmatched scale both in the US and across the world” (DataMonitor, 2011, pg.5). The companies “large scale relative to most vendors leads to favorable terms on everything from products on its shelves to store leases and distribution agreements” (DataMonitor, 2011, pg. 6). “These competitive advantages generate positive economic returns and market share gains” (DataMonitor, 2011, pg.6). “Also, Wal-Mart stores offer a large variety of nationally recognized as well as private label merchandise across several categories, including grocery, entertainment, hard lines, health and wellness, apparel, and homewares” (DataMonitor, 2011, pg. 6). “The company dominant position and vast range of products has continued to allow the company to swiftly shift to the product mix to meet demands and benefits from increased sales” (DataMonitor, 2011, pg. 7). For example, “by changing the floor space allocation, Wal-Mart can benefit from low-income consumers’ growing preference for consumables staples instead of discretionary items” (DataMonitor, 2011, pg. 6). Wal-Mart continues to maintain its market