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As a result, he and wife, Helen put up ninety-five percent of the capital for the first Walmart in Rogers, Arkansas.
Five years after opening, Walmart had evolved into twenty-four additional locations in Arkansas. Looking to expand into other parts of the nation, in 1972, Walton listed the growing chain on the New York Stock Exchange to raise additional capital. What resulted was the widespread growth of the company to 276 stores in eleven states by the end of the decade (Walmart Stores, Inc- History Timeline, 2008).
The 1980’s became a decade of rapid growth for Walmart Stores, Inc; its business model split into two segments: Walmart retail stores and Sam’s Clubs. Walmart stores developed into three sizes: neighborhood markets at 47,000 square feet, discount stores at 100,000 square feet and super-centers at 187,000 square feet. The first three Sam’s Club opened in 1984; this model provides merchandise at “member-only” prices while catering to both small businesses and large families.
The company’s first international undertaking was a joint venture in Mexico in 1992. Since then, Walmart has progressed into Central and South Americas, Asia and Europe. The company has stores in Argentina, Brazil, Canada, Germany, South Korea, Puerto Rico, the United Kingdom, China and Japan. As a result, the corporation has earned high praise and recognition since its inception from the likes of Forbes Magazine and other organizations.
The reach of Wal-Mart being so widespread, it is difficult to ascertain a group of individuals not influenced by the retailer. Over 176 million people visit Walmart each year while 84 percent of Americans claimed to have shopped at a Walmart store in the last year (Ferrell, Fraedrich, & Ferrell, 2008). With over 2.1 million associates, 7,800 stores and clubs and thousands of suppliers, the store’s list of stakeholders is almost innumerable.
Walmart demands that its suppliers focus on efficiency through technology; its merchandising-track system is called radio-frequency identification (RFID). The system ensures that suppliers are informed when their products are sold. As a result, replacement products may be shipped to guarantee that stock is never low. The retailer requires that all suppliers have to install the system costing some companies as much as $9 million.
Despite these hardships, companies are hard-pressed to discontinue its relationship with Walmart. Walmart has high-volume relationships with several companies whose success depends on its association with the retailer. For instance, twenty-eight percent of Dial Corporation’s business comes from its affiliation with Walmart. Other large suppliers include Revlon, Proctor & Gamble, Kraft Foods, General Mills and Kellogg’s. These companies sell more than twelve percent of its product through Walmart.
Wal-Mart’s key strategy is to keep prices low and the company fully expects its suppliers to do the same. As a result, it requires its suppliers to lower...