When Sam Walton opened the first “Wal-Mart Discount City” back in 1962 in Rogers, Arkansas, he envisioned opening a discount store that offers one-stop shopping for all its customers. But little did Walton know that his vision will lead his Wal-Mart business in becoming the single largest retail operation in world, with sales of $217.8 billion in 2001 (Wheelen, 2002).
The numbers, contrary to the store prices, are anything but low – the Company operated 1,478 Discount Stores, 1,471 Supercenters, 538 SAM’S Clubs and 64 Neighborhood Markets in the United States alone. Wal-Mart also had established international presence in eight countries and Puerto Rico (Bhatnagar, 2004).
Depending on location, Wal-Mart Stores, Inc. operates its retail business in various formats: Wal-Mart Stores, SAM’S CLUB and International. But in a time where discount retailers like Kmart and Sears are struggling year after year, Wal-Mart Stores continue to thrive with impressive sales figure. So to better understand the Company’s secret to success, we must analyze Wal-Mart’s marketing strategies and key success factors.
While much of Wal-Mart’s success can be traced back to Sam Walton’s philosophy in entrepreneurship, there are a number of primary factors that help Wal-Mart to become the domestic as well as global phenomenon – emphasis on customers, strong relationships with employees, strategic expansion, and “Buy American” program.
Emphasis on Customers
Although there are similarities between Wal-Mart and its competitors like Kmart and Sears, it’s the differences that made Wal-Mart a preferred choice for customers looking for a one-stop shop of quality discounted merchandise. From employees wearing blue vests to better identify themselves to the customers, to architecting the store layout so to provide wider aisles, to welcoming shoppers at the door with a people “greeter”, they are all measures implemented with customer in mind. While product pricing may be a significant factor for consumers, Wal-Mart was about to further differentiating itself by emphasizing the “people first” philosophy as a competitive advantage for success.
Strong Relationships with Employees
The “people first” philosophy also applies to Wal-Mart’s employees. Since the training days at J.C. Penney, Walton had learned about the importance of employee in the company’s road to success. Modeling the Wal-Mart training program on “the Penney Idea”, Walton emphasized the need to strengthen the relationship between the Company and its employees. The “partnership” concept was born with corporate strategies putting emphasis on human resource management, and employee involvement in company affairs is unusually high compare relative to the industry. In fact, words like “we,” “us,” and “our” are as integral to the corporate language as “everyday low price”.
Wal-Mart continues to expand its operation aggressively during the 1980s and 1990s. While new stores were established in smaller communities (5,000 to 25,000) in population, the Company also expanded by locating stores in neighboring areas. As soon as its business operation matures, Wal-Mart will seek to move to an adjacent area. This strategy is proven to be a great success for the Company because it helps maintain a healthy level of growth as well as leveraging its increasing buying power with suppliers.
“Buy American” Program
The Company stresses the importance of “made in U.S.A” when it comes to carrying product lines on the sales floor. Not only does this program help American manufacturers compete with foreign companies in domestic sales, it also offers customers values by producing and selling merchandise at a competitive price. This is an excellent marketing strategy for the discount retail giant, especially since 2001 with the September 11 attack.
Wal-Mart Stores, Inc. had forever changed the way retail industry operates. Indeed, the Company had faced some setbacks in the years past; it had also experienced tremendous gains from its aggressive marketing and expansion strategies. Although Sam Walton may not longer be the Chairman and CEO of his beloved discount retail store, his entrepreneurial spirit remains evident in all the Wal-Mart locations to this day.
Bhatnagar, P. (2004, January 9). Wal-Mart: No longer a home run? Retrieved on
Novemeber 11, 2004 from
Wheelen, T. ; Hunger, D. (2004) Cases in Strategic Management and Business Policy.
Upper Saddle River: Pearson Prentice-Hall