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Walmart Retail Analysis

2127 words - 9 pages


Homework Assignment #1

Prepared by Basak Alemdag


Business description

Walmart is an American retail corporation that runs chains of large discount department stores in various countries. It is currently the largest retailer in US and in the world and also the world's third largest public corporation according to the Fortune Global 500 list in 2012. Today, Walmart operates in 15 countries with a total of 8500 stores. It is well-known for its low-cost structure.

Founded by Sam Walton in 1962, the company is headquartered in Bentonville, Arkansas. Walmart is still a family-owned business, run by the Walton Family ...view middle of the document...

S., frequent Walmart shoppers were rated the most politically conservative. In 2006, Walmart took steps to expand its US customer base, announcing a modification in its US stores from a "one-size-fits-all" merchandising strategy to one designed to "reflect each of six demographic groups – African-Americans, the affluent, empty-nesters, Hispanics, suburbanites and rural residents. Around six months later, it unveiled a new slogan: "Saving people money so they can live better lives". This reflects the three main groups into which Walmart categorizes its 200 million customers: "brand aspirationals" (people with low incomes who are obsessed with names like KitchenAid), "price-sensitive affluents" (wealthier shoppers who love deals), and "value-price shoppers" (people who like low prices and cannot afford much more).

Walmart has also made steps to appeal to more liberal customers, for example, by rejecting the American Family Association's recommendations and carrying the DVD Brokeback Mountain, a love story between two gay cowboys in Wyoming.

Type of store and geographic distribution

Until the mid 1980s, Walmart was geographically limited to the South and Lower Midwest of the United States. During the early 1990s Walmart expanded its reach from coast to coast - Sam's Club warehouse stores opened in New Jersey and in California, and a Walmart in York, Pennsylvania was opened in October 1990 bringing the main store into the Northeast.

As mentioned in the beginning, today Walmart has 8500 stores in 15 countries, operating under 55 different names. The company uses the “Walmart” name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price.
It has stores in Argentina, Brazil, and Canada. Walmart's investments outside North America have had different results – not all of them were successful ventures. Its operations in the UK, South America, and China are highly successful, whereas ventures in Germany and South Korea were unsuccessful.

Another interesting fact is that Walmart is the biggest private employer in the world with over two million employees.

Economy affect on this business

Being able to provide lower costs in many items, Walmart has managed to do well in times of economic crisis.

During the 2008 financial crisis, the overall retail industry is experienced a sale slowdown due to consumers reducing their spending. According to an article on Business Week, the real consumer spending declined by 3.7% in the third quarter of 2008 and that was the “largest drop since the 1980 credit controls”.

A lot of retailers were so severely affected that they have to close its stores. For example, Circuit City closed all its stores in March 2009 and Steve and Barry’s closed its anchor store that year as well. Some retailers have to reduce the selling prices to boost their sales. Costco reduced its average price on TVs...

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