Company_Profile

Company Profile: Wal-Mart Stores, Inc., the U.S. retail legend, was founded by Sam Walton in 1962 in Arkansas. After forty years of development, Wal-Mart has become the largest private employer and the world's largest retail chains store. Currently, Wal-Mart has opened more than 8,000 stores in 15 countries in the world, under 53 brands. More than 210 million customers visit Wal-Mart's store per week. In 1991, Wal-Mart's annual sales exceeded 40 billion U.S. dollars and became the one of the world's major retail companies. According to the service industry classification list published in May 1994’s "Fortune" magazine in U.S., Wal-Mart's annual sales is up to $ 67,340,000,000 in 1993, with growth of over 11.8 billion compared the previous year. This figure exceeded Sears which was the No.1 in 1992 and made Wal-Mart the nation's top retailers. Wal-Mart's sales continue to grow in 1995 and created a world record for the retail industry, achieving annual sales of 93.6 billion U.S. dollars, which was ranked fourth largest U.S. companies in the "Fortune" magazine 95. In fact, Wal-Mart's annual sales is equivalent to the sum of all U.S. department stores, but still maintains a strong trend of development. So far, Wal-Mart has 2,133 Wal-Mart has stores, 469 stores and 248 Sam's Club Wal-Mart shopping plaza, located in the United States, China, Mexico, Canada, United Kingdom, Puerto Rico, Brazil, Argentina, South Africa, Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua and other 14 countries. Wal-Mart in China Wal-Mart came to China in 1996 and opened the first Super center and SAM'S CLUB in Shenzhen, Guangdong Province. Nowadays, there have been 86 stores in 46 cities, with a total investment of over RMB1.7 billion. Across China, Wal-Mart employs more than 38,000 staffs. As an outstanding corporate citizen, Wal-Mart actively gives feedback to the community and has donated funds totaling more than RMB26 million and similar supports to local charities and welfare organizations over the past ten years. In China, as elsewhere, we follow the Wal-Mart tradition of building our business one store and one customer at a time. We strive to provide our customers with friendly service and a wide selection of quality products at Every Day Low Prices. With each Wal-Mart store we bring advanced retail know-how to the local market. By fostering a healthy, competitive environment, we hope to constantly improve our business operations and customer service in order to contribute to the prosperity of the local economy. Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. At Wal-Mart, we always work with our suppliers to grow together. In the August 2006 Supplier Satisfaction Survey published by Business Information of Shanghai, Wal-Mart ranked first across several supplier satisfaction indexes. Wal-Mart's mission： Company mission, is the role and responsibilities that an enterprise should be in the social and economic development. It is the fundamental nature and raison d’être, that corporate business areas, business ideas, for the establishment of business goals and strategies provide the basis for the formulation. Wal-Mart's mission is to provide opportunities for ordinary people, so that they can buy with the same things as rich people. Corporate strategic objectives： Strategic goal is to achieve an enterprise in the pursuit of its mission in the course of long-term results, in some of the most important areas of further specific corporate mission. It reflects the business activities of enterprises in the period of time the direction and level to be achieved. Wal-Mart's strategic goal is to locate in low-income groups, saving is always better than rivals. Every Day Low Price. Corporate social responsibility: CSR refers to the enterprise liable to create profits for shareholders, whom we must also take on employees, consumers, communities and the environment. Corporate social responsibility requires the enterprises to go beyond the traditional goal of profit as the only concept in the production process emphasized the value of human attention, emphasis on the consumer, the environment, contribution to society. Wal-Mart plans to focus on corporate social responsibility embodied in five areas, including environment, sustainable development, back to the community, care of children, support education and disaster relief. Since entering China, Wal-Mart's total of donations to various charitable cause more than 6,000 million Yuan of funds and goods nationwide. Also, Wal-Mart employees participate into social welfare undertakings accumulated over 180,000 hours nationwide. Investigate the economical, social and global environment in which organizations operate. The economical environment that business enterprises are facing includes the socio-economic conditions and operating conditions, trends, industrial structure, transportation, resources, and so on, which are the important factors restricting the survival and development. Modern enterprises are facing to complex social and economic environment, to achieve corporate financial goals. They must correctly handle the relationship between business and the parties to fully consider the interests of all parties and reach the trade-offs between them. The proper handle with the interests of any party will give an adverse impact on enterprise development and affect the business goals. As a retail business, Wal-Mart put different interest groups into contact, from the purchase, distribution to sales, from daily operations to the social welfare activities. These interest groups include customers, managers, employees, suppliers, government and so on. 1. Customers. Customers are the source of wealth. Having good customer resources is a prerequisite to achieve business goals, especially for retail customers directly to commercial enterprises like Wal-Mart. Wal-Mart has always taken "meet customer needs" as its first principle. So Wal-Mart has such a statement: first of all, customer is always right, Secondly, if customer is in error, please refer to the first. Because of this, Wal-Mart customers in ensuring there is no wastage of resources, through their own efforts and from the competitors get to explore a large number of loyal customers, these customers bring stable sales revenue to Wal-Mart and help to maintain a sustained growth for decades. 2. Managers. Management is the core and backbone of company's leadership who is able to effectively inspire. It is also an important condition for the development of enterprises. In addition to strengthening communication with the manager's thinking so that they are fully aware of the importance of their enterprises, Wal-Mart also uses the allotted stocks ways to reward managers since early stage. When its first issue of stocks in 1970, Wal-Mart gave the company’s top management placement and later formed a fixed system. Now, the stock’s market value has risen several times. It now appears that the incentives approach combining business development and individual welfare play a significant role. Managers recognize now that the hard work will be to the appreciation of company stock and also for their future to get more payment. This greatly aroused the working enthusiasm for the realization of business goals and lay a good foundation. 3. Employees. Retail is a typical "people" business, which employs from the initial number of retail workers to over 100 million employees now, across the United States and is the largest private employer. To ensure that the interests of employees, effective incentives are important factors in the success of Wal-Mart. Wal-Mart uses mainly two aspects of spiritual and material effective management of employees. The first one is strengthening the spirit of encouragement. In Wal-Mart, employees are called Associate. Company treats and respects every employee, surely their values, leadership, good communication with staff, which greatly stimulates the enthusiasm of staff to work hard. Second one is the development of a specific set of employee benefits programs. The "employees are the Associate" is the concept of concrete. They have three plans: profit-sharing plan is "to ensure that employees work for the company to share profits"; Employee Stock Purchase Plan is "to allow employees to buy at below market value stock"; and Loss Award is "for efforts to reduce losses staff of the additional bonuses. 4. Suppliers(这里单词用的是供货商，但下面的内容是讲股东，shareholder或者stockholder，你看着情况改，要改的话下面凡是提到supplier的地方都要同样改) Suppliers provide funds to the enterprise fund component that play an important role. After lending companies with the capital, suppliers generally want business people to hard work, returning with interest on time and recovering principal finally. To maintain the good credit, timely repayment of principal and interest is the best way to ensure the interests of suppliers. Before issuing stocks in Wal-Mart, the loan is the most important source of funding for Wal-Mart. From the first $ 1,800 loans to buy ice cream machine starts in 1946, Wal-Mart has always maintained good credit with on-time payment. Therefore, these bank loans provide Wal-Mart the ample financial support and a sufficient guarantee of bank loans is crucial to smooth and rapid development to the early Wal-Mart. 5. Government Government authority presents in the formulation of economic policy, macro regulation and control as the representative of the nation, providing a variety of public services, production and operation to the enterprises directly or indirectly. For multinational companies like Wal-Mart, it is important to to establish a good relationship with governments, which will affect its further development, expansion and corporate objectives. In response, Wal-Mart establishes a good relationship between the local governments through a series of strategies. Investigate the behaviors of organizations and the market environment Whether in the past or now, Wal-Mart faces to adverse market environment and they have taken the right approach. In 1962, just one year after Wal-Mart was set up, it has been a great success. Its stores in Bentonville have reached 70 million turnover. Even so, Wal-Mart was nothing but a small company in the U.S. retail industry. When Wal-Mart opened, there were four big retail stores to enter this field, including Kresge Company, Kmart Corporation, Wu Erke chain stores and Dayton - Hudson companies in the U.S.. These four companies were the large ones at the time. As a result of some strong companies joining, the market was made very competitive. As a low-cost retailer, Wal-Mart was facing severe challenges. For example, in the first five years, Kmart had 250 stores, while Wal-Mart had only 19. Kmart had more than 800 million U.S. dollars sales, while Wal-Mart had only 900 million U.S. dollars. Although faced to adverse market conditions, Wal-Mart still adhere to a philosophy that "as long as the store can provide the most complete product, best service, the customer will come". In addition, this can bring a good reputation, excellent service and the ultimate success of the Wal-Mart. Sam also used a "small profits" strategy. His "pants theory" is the best illustration of Wal-Mart's marketing strategy. Sam once said: "pant’s purchasing price is 0.8 U.S. dollars and the selling price is 1.2 U.S. dollars. If the price is reduced to $ 1, I can earn half of the money I could earn. But the quantity can be three times". In Sam's leadership, Wal-Mart continues to achieve great success in the market. By 1980, the Wal-Mart had 276 stores with 1.248 billion U.S. dollars sales income, being the largest U.S. retail company. Since then, Wal-Mart continues its success in the U.S. In 1991, Wal-Marts finally got 32.5 billion U.S. dollars retail sales and, in the first place, the competitors were behind it. After then, Wal-Mart began to step the pace of internationalization, with more and more stores and becomes the world's largest and most significant results of the company. Wal-Mart's marketing strategy is correct in the following aspects. 1, low-cost From the beginning, Wal-Mart always uses low price strategy. Its low price strategy is not the same with other businesses. Generally, low price refers to the reduction or non-cyclical, specific business purpose for the temporary or one of expediency. For example, seasonal clearance is often for the introduction of new products. Wal-Mart's low price strategy is a marketing strategy, which is not limited to the implementation of one or a few commodities, but for all the cheap goods being sold. The low price strategy is not only a moment or a period of time but over the years. It is not only in some areas or certain areas but in all regions. Wal-Mart's low prices are to reduce marketing costs and cost-based commodity circulation. 2. Emphasis on science and technology Wal-Mart has their own satellites to manage their own logistics. Wal-Mart invests 2,400 million to establish its own satellite communications system so that suppliers, stores, distribution centers and corporate headquarters are linked together. Thus, Wal-Mart has timely access to the information they need. The company's computer network was completed in 1977, which can handle payroll, customer information and order delivery. The company's headquarters can reach the stores and distribution centers for fast and direct communication. In 1979, the first data processing and communications center was completed which was located in Bentonville headquarters. Although it only occupied 1,500 square meters, the entire company can achieve a computer network and 24 hours of continuous communication. It was said that Wal-Mart's information system is the largest civilian system. In the storage of the company's satellite communications, everyday’s sales can be found. The total amount of credit card in any region or any store can also be found. All commodity sales will be saved up to 65 weeks of goods inventory records. Wal-Mart's computer system and its directly connection to manufacturers, brokers and other intermediaries skip the steps from branch to collect the order, summary order, issued orders, distribution of goods to store. The entire process takes only a few hours, greatly improving the operating efficiency and accuracy. At the same time, it requires suppliers to hang tags on the goods and transport from the depot directly to the store site to reduce storage and data processing costs. Particularly, in the process, Wal-Mart did not put the savings into their own pockets. They transfer the profit to the customers. This fully explains: "Technology is the first productive force." 3. Marketing Communications U.S. department stores do some advertising 50 to 100 times a year but Wal-Mart only do 12 times in average. It's advertisement is only one-third of Kmart's in the United States which is the second-largest chain stores its sales per square meter is the third largest chain store doubled than Sears. Compared to other big store, its advertising costs are the lowest, but its sales are the highest. Why can Wal-Mart's reach this' (1) More public before the public and establish a good image. Since 1987, the company states the "United Way" charity and donates more than 6,000 million, in helping American children at the hospital. Not only that, the founder of Wal-Mart, Mountain Muwo Hamilton, also owns "Sam the United States selected" commodity by a certain percentage of the turnover for the establishment of scholarships to help students in mathematics and computer studies. (2) Organizing new community activities to increase visibility. For example, Wal-Mart stores in Silas, California set up a float procession or parade in the region to participate in activities. Wal-Mart's players wear the uniform of the company, pushing the truck through the streets, attracted a lot of people. In Georgia, a branch of the county, they are in a procession of floats and let seven employees dressed as fruits and vegetables. They loudly shout the slogan contest Wal-Mart. The result is not only to obtain the first prize but also let everyone remember the name of Wal-Mart. (3) The success of promotions. For example, Wal-Mart's opened 52 stores in Hot Springs, the local Kmart store has only one (who is the second largest U.S. retail stores). In the absence of competitors, Kmart’s prices were very high to the community which gave Wal-Mart opportunities. They went into with 3500 box of detergent with the price dropping from $ 3.97 to $ 1.99 and sold out within a week. (4) Store in the launch of "advertising products." Wal-Mart stores will launch from time to time some "advertising goods", primarily toothpaste, soap, shampoo and other necessities of daily life. This is because: first of all these goods are so common that any business is not easy to take a monopoly advantage; Secondly, because of daily necessities, people have a better understanding of its price. The lower price will draw the customer's attention immediately. The fact is that the "advertising commodity" is better than advertising. Because it is more direct stimulus to consumer desires. At the same time, the customer will spread the goods between the price information. So when customers have come to Wal-Mart, the tend to buy other merchandise. Explore the significance of international trade Wal-Mart relies on its nearly perfect method of cost control as the world's retail overlord. But, low-cost strategy in China has failed. Wal-Mart entered China in 1996, after a decade of development, operating conditions are not so good and it is still at a loss. Why is the recognized world retail giant still at a loss in the land of China even after 10 years' If compared to the grand occasion in the United States, it is simply a heaven and a ground. Wal-Mart's cost control advantages are gained from the specific performance. Its "three lows" mode of operation, namely, low purchasing price, low cost, low-fare, is highly dependent on the automated logistics systems and information systems which are built in the U.S. high-tech, high- income, high consumption and other environments. But, in China, many factors constrain its development and application. 1. To save the cost of the negative business impact. Wal-Mart's fixed office costs account for only 2% of turnover. The low-cost operation specifications result in directly that Wal-Mart only pays employees a very low salary. As a result, it leads to the staffs work in negative emotions. The smiles are replaced by casual or even bad attitude. It is also reposted that in some countries Wal-Mart even hires illegal immigrants and child labor fatalities. 2. Goods distribution and high-tech nature of the unity in our country will be restricted In China, Wal-Mart's highly automated logistics system does not produce the necessary effect. In the US, the easily accessible by highways, more than 3,000 Wal-Mart stores and a rational distribution center provide the necessary conditions for cost control. But the low level of development of China's highways makes Wal-Mart distribution to be unable to reach the level in the United States. Also, Wal-Mart has only two distribution center located in Shenzhen and Tianjin, which makes a distribution center around the practice of intensive construction of stores in China cannot be implemented. 3. In China, a strong information system does not reveal Wal-Mart has its own powerful information system. With its own commercial satellites, Wal-Mart's information systems can quickly and easily achieve a global network. Since 1980, Wal-Mart began to force the suppliers of information systems with its docking, which is Wal-Mart's information systems can play a role in the United States an important factor. But at this stage, China's business environment limits Wal-Mart’s advantages in this aspect. Most of the domestic low levels of supplier information and Wal-Mart have only a simple data exchange. Also, because of policy restrictions, Wal-Mart's satellite communications system in China cannot play a role in its global procurement system. The global logistics system cannot effectively share the role of the background aspects in China's market like it does in other foreign countries and cannot achieve the desired efficiency. Difficult to achieve inter-regional distribution chain, Wal-Mart has greatly affected the implementation of the policy of low prices. 4. Localization has been repeatedly ignored Wal-Mart in China had copied its fantasy world to every store which is consistent with the concept of business model and culture, but failed. The problem here is: the system can be re-established but they cannot simply be copied. The construction of enterprise culture is not written in the manual, shouting slogans or achieved through meetings education. Corporate culture is a business philosophy in the development process and is the accumulation of values and ethics. It permeates every employee in corporate thinking. If the same is to accept the ideological education of the customer first, with the performance of Wal-Mart employees there may be different, so the problem is the Wal-Mart corporate culture that emerged in China, where many of the problems cause. This paper discusses how Wal-Mart is from a small shop to a Fortune 500 company and its business achievements. Its unique marketing strategy, its high-tech infrastructure and its grasp of the different market environment are also discussed. They are worth in analyzing, understanding and learning. Certainly, Wal-Mart has also failed but it will improve from failure. So, such an enterprise it is and to be successful.