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Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large discount department stores and a chain of warehouse stores. Wal-Mart was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart is the largest majority private employer and the largest grocery retailer in the United States. It also owns and operates the Sam's Club retail warehouses in North America. Wal-Mart has 8500 stores in 15 countries, with 55 different names. The company operates under its own name in the United States, including the 50 states. It also operates under its own name in Puerto Rico. Wal-Mart operates in Mexico, in the United Kingdom,Japan and India.

Brief History Lesson
Sam Walton a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.

Walton was extremely successful in running the store in Newport, far exceeding expectations. However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors.


On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.

Wal-Mart has made some considerable changes to market itself as a company with a strong commitment to being green. As the company has pursued a responsible corporate social reputation though, it has realized significant savings.
Wal-Mart adopted a scorecard program to review the way each product is made, its merchandising, and its recycling availability. Wal-Mart even began offering promotions and benefits to vendors that scored well on the sustainability scorecard.
In such cases, Wal-Mart saved money on gas for transportation, packaging costs, and other costs, which meant it earned greater profits.

Wal-Marts security uses SSL which is Secure Sockets Layer, technology protects your online transactions and help increase trust in your Web site in the essential ways. An SSL Certificate enable encryption of sensitive information during online transactions. Each SSL Certificate is unique credential identifying the certificate owner. A Certificate Authority authenticates the identity of the certificate owner before it is issued. Wal-Mart has set up a fire wall to protects against authenticity and integrity of the information. Wal-Mart wants to see chip-and-pin payment cards adopted in the United States in the effort to better secure financial transactions.

Wal-Marts Business Strategies

According to Porters Five Forces Model Wal-Mart focuses on overall cost leadership . Overall cost leadership requires firms to develop policies aimed at becoming and remaining the lowest-cost producer and/or distributor in the industry. Company strategies aimed at controlling costs include construction of efficient-scale facilities, tight control of costs and overhead, avoidance of marginal customer accounts, minimization of operating expenses, reduction of input costs, tight control of labor costs, and lower distribution costs. The low-cost leader gains competitive advantage by getting its costs of production or distribution lower than those of the other firms in its market.

It is understood that Porters Five Forces Model helps business people understand the relative attractiveness of an industry and the industry's competitive presseures in terms of buyer power, supplier power, threats of substitute products or services, threat of new entrants, and rivalry among existing competitors.

Buyer Power: Walmart does an excellent job in reducing buyer power and creating a competitive advantage by making it more attractive for customers to buy from them than from their competitors.

Supplier Power: Walmarts supplier power is extremely low becasue Wal-Mart purchases in such large quantities, it nutralizes supplier power.

Threat of Substitute Products or Services: Wal-Mart focusing on ensuring that their customers are happy and that their suppliers are delivering quality products at a low cost. They ensure that they remain ahead of their competitors and in doing so, it would make it difficult for new entrants and the competition to match their prices.

Threat of New Entrants: To create entry barriers, Wal-Mart would have to increase market research on what customers are actually purchasing and ensure that they are able to deliver, and become the only person offering that product at a price the customers and afford.

Rivalry: Is relatively low because Wal-mart has such low prices which has created a problem for years and fierce competition has made it tough for competitors to make a profit.

In achieveing a Low Cost Leadership strategy Wal-Mart relies heavily on a Supply Chain Management System, an IT system that supports activities by automating the tracking of inventory and information among business processes and across companies. Wal-Mart strives to ensure that all their suppliers are using Electronic Product Codes and for those who do not have the capability they work with them to find packages that are within their price range. This allows for a successful ensuring that customers get what they order in a timely manner. It allows for logistics, fulfillment, production, revenue and profit, cost and price efficiency.

With operations all over the country and several thousand suppliers, supply chain management and IT-based supply chain management systems are critical necessitites in ensuring a positive flow of goods, with limited inconsistancies.

As an Overall Cost Leadership company, their strategy is that of a bottom-line company. A bottom-line strategy optimizes manufacturing processes, decrease transportation costs, and reduces cost of human capital, and minimizes errors in a process.

Wal-Mart relys on IT enabled tight supply chain management systems to squeeze every penny possible out of the procurement, distribution, and warehousing of its products. They use business intelligence systems to predict what customers will want and when they will want it. Wal-Mart is currently using ERP, which incorporates, Customer Relationship Management system; they are also in the process of implementing SAP to strengthen their business skills. Philosophical Approach could be the Matrix, where there is collaboration across the board to ensure customers’ needs are satisfied. They have in-out flows, which is from computers to suppliers.