Wal-Mart: Staying On Top of The Fortune 500
Wal-Mart: Staying On Top of The Fortune 500
Fortune 500
Background
Last year, Wal-Mart had revenues of $191
billion. Wal-Mart's 2002 sales topped $218
billion, with sales growth at 13.8 %. Its 2002 net
income was $ 6.7 billion, a growth of 6 %.
Wal-Mart has 1,283,000 employees, as of 2002;
a growth of 11.2 %
Wal-Mart is the largest retail store in the United
States,
continue
During the 1970s, the retail industry became highly competitive, but, at the same
time
the economy became weak due to inflation. Sears was the leading retailer in the
nation,
during the 1970s, however, the recession of 1974-1975 and inflation affected Sears
adversely. Sears targeted middle class families and expanded its overhead. Wal-
Mart's strategy was to compete with its rivals and lower overhead expenses.
Compared
with Sears, which consisted of more than 6,000 distribution centers, Wal-Mart had
only
2,500 comparable units.
Timeline
1962 Wal-Mart opened the first store In Rogers, Ark.
1970 Wal-Mart opens first distribution center and home office in
Bentonville, Ark.
1970 Wal-Mart traded stocks as a publicly held company
1971 Wal-Mart in five states: Arkansas, Kansas, Louisiana, Missouri
and Oklahoma.
1972 Wal-Mart approved and listed on the New York Stock Exchange.
1973 Wal-Mart in Tennessee.
1974 Wal-Mart stores now in Kentucky and Mississippi, Texas
becomes 9th.
1977 Wal-Mart entered Illinois. 11th state: Alabama.
• 1996 Wal-Mart enters China
• 1997 Wal-Mart replaces Woolworth on the Dow Jones Industrial Average
• 2000s
• 2000 Wal-Mart ranked 5th by FORTUNE magazine in its Global Most Admired All-
• Stars list.
The company uses its size, financial power, immense resources to dominate retail.
That translates into effective use of strategy whether its operating a local store, to
acquiring another retail chain in another country. The power and size of the company
enables it to realize its goals with ruthless efficiency.
The strategy is very clear and direct. It was put into place in the 1960's by Sam Walton,
and refined over the decades. The company is proud of its strategy and even
incorporates it within its moniker "Always Low prices, Always."
The public message of the company is consistent, and has been so over time. Founded
by Sam Walton, the company has grown considerably. The core message is that Wal-
Mart is a "family friendly" store, and that it is good to its customers, and that it is an
"terror" in the words of one union representative who has accused the company of old-
fashioned union-busting tactics.
Stakeholder Analysis
• Market Stakeholders
1. The Stockholders
2. The Wal-Mart Executives
3. The Employees
4. The Communities where Wal-Mart is located
5. Consumers
• Non-Market Stakeholders
1. Labor Unions
2. International Retail Stores
3. Politicians
Political/Public Affairs Strategy
Public Affairs
Wal-Mart's power position relative to the key policy issues and
stakeholders is one of
domination. The size, wealth, and financial power of the
company is impressive. It is
the largest retailer in the United States. It is the largest political
donor in the retail
sectors. This dominance, and the company's finances, coupled
with retaining the top
lobby shops in the US give the company an advantage in
Washington.
PACs and Giving Strategy
Wal-Mart has a Political Action Committee: Wal-Mart Stores INC PAC for Responsible
Government. In 2001, up to February 2002, Wal-Mart has contributed $461,000 to
federal candidates. The donations are distributed roughly 75% to Republicans, and
25% to Democrats. The total donations by PACs in the retail sector in 2001-2 thus far
totaled $1.5 million. Wal-Mart is the top political contributor among all retail sector
PACs, totaling $600,000 in total contributions. In 2000, a Presidential election year,
Wal-Mart PAC gave $457,050. (FEC and www.opensecrets.org) The giving strategy to
political campaigns is substantial. Mostly to the Republicans.
Conclusion
• In conclusion, Wal-Mart is the number one retailer in the United States and is at the top
• of the Fortune 500 listing. Wal-Mart operates in many countries world-wide and is
• moving into new countries every year.
• Wal-Mart is also expanding as a retailer. They have expanded into many other sectors
• of the marketplace, including groceries, gas stations, electronics, and auto
• maintenance. Each year, Wal-Mart finds new ways to grow and offer more services to
• their customers.
• Each year, the number of people who have a stake in Wal-Mart also grows. Each year,
• more claims are made against Wal-Mart by the unions and other businesses that have
• been forced out of business. Wal-Mart is often able to uncut many other local industries
• and more and more local businesses are shutting down when Wal-Mart moves into
• town. The unions are filing more court claims against Wal-Mart because they
• encourage their workers not to join unions.