Wal-Mart Stores Inc.

Introduction:

​Wal-Mart Stores Inc., a large retail and wholesale store, was started by Sam Walton in Bentonville, Arkansas in 1950.1 Walmart is separated into three segments; Walmart US, Walmart International, and Sam’s Club. Walmart does business in five different merchandise areas; grocery, entertainment, health and wellness, hard-lines, apparel and home.2 The headquarters for Walmart is based in Bentonville Arkansas where Sam Walton started his first store.1 Walmart US has stores in all fifty states plus Puerto Rico and the District of Columbia. The international sector of Walmart is based in twenty-six countries outside of the United States, including China, Brazil and Japan.2 Walmart is known as the largest retail company in the world and is growing every day.

​Walmart has a very specific mission statement that is upheld in all aspects of the business, “We save people money so they can live better.” This statement is backed up by their EDPL or Everyday Low Prices strategy.1 The mission statement is accompanied by a purpose statement by their founder Sam Walton, “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.”1 Walmart intends to fulfill these statements by implementing various principles and strategies, such as the Sundown rule, where all questions are answered on the same day they are asked; and the grass roots process, where suggestions are taken not just from upper management, but also from the sales floor and front lines.1 According to Walmart CEO, Mike Duke, Walmart has five priorities that they are following to fulfill their mission. These priorities are: “Grow by adding customers, opening new stores and acquiring other retailers, keep costs low and pass the savings on to customers, build a global Internet business, develop talent, including a greater focus on women and minorities, and expand the company sustainability effort.”3 Walmart strives every day to give its customers the lowest prices and the most product choices.

Walmart has many competitors in the retail and wholesale industry. There are direct competitors such as Target, K-mart and Big Lots, as well as smaller local grocery stores in each and every city. Walmart has many different products, everything from electronics to auto supplies. All of these different products give Walmart many different competitors. Best Buy is competition in the electronics area, while Walgreens competes in the pharmaceutical and convenience areas. Amazon is Walmart’s biggest competitor for online retail sales, while Target remains as their biggest physical retail competitor. With their large variety of product areas, Walmart has many competitors but still holds the number one position in the retail industry.

There are many factors that affect Walmart and the retail industry. General economic factors such as inflation, taxes, and increasing interest rates affect Walmart as much as they affect other companies. Shipping costs affect Walmart as well. Walmart has one of the largest distribution facilities in the world, opening two new plants in Fort Worth, Texas and Lehigh Valley, Pennsylvania, in the last year.4 The daily fluctuations of gas and oil prices have a large effect on Walmart’s shipping process. Increasing internet shopping will also have an effect on Walmart’s business plan. Internet usage in the world has grown by almost thirty-one percent since 20105, and of all the internet users, forty-one percent have purchased a product online.6 The continuous growth in the number of online shoppers should affect how Walmart does business.

Analysis of Current Technology:

​Hardware: Walmart uses many different kinds of hardware in their everyday business. Computers are used for managers and other employees while scanners are used to read barcodes for checking out products. Barcode scanners give Walmart a quick and efficient way for employees to check out customers. These scanners also help to give Walmart data about customers and products that help them to increase profits. RFIDs or radio frequency identification devices, are used to do inventory of all the stocked products. Walmart began using RFID tags in 2007 to track pallets of their merchandise through the entire shipping process which helped to cut down on excess inventory and prevent out-of-stock occurences.7 Walmart also gives customers the ability to scan and purchase their own item without the help of an employee. These devices are called self-checkout counters. Self-checkouts speed up the shopping process for both the retailer and the customers. Walmart uses all of its hardware to increase the efficiency and ease of the shopping process for its customers.

Software: There are two types of software: system software and application software. Walmart uses both to increase ease and efficiency in everyday business. System software is used in stores for communication between employees and customers as well as for the cash registers used to check out the customers. Walmart also uses application software for its main Walmart mobile application as well as its Savings Catcher application. The applications help Walmart to not only sell products to customers over the internet, but also to give quick and efficient customer service. With the app a customer can send a quick email with a question or problem, or give reviews on products. The software helps to gather information for Walmart’s databases. The more information that Walmart can gather, the better their chance is to having increased sales.

​Databases: Walmart has the largest retail database system in the world. Starting with less than a 320 gigabyte database; Walmart now has more than 500 terabytes of information in their databases. All of this information is supported by NCR’s Teradata division.8 Customers can use this database to look up products and prices to improve their purchasing decisions. The database helps both customers and suppliers. Walmart can help suppliers with their Retail Link system by allowing suppliers to access a large amount of real-time, up to date information to help improve operations.8

​Networks: Walmart uses the largest network in the world to do a large portion of its business, that network is the internet. They use the internet for customer service, selling products to customers and even for ordering merchandise from their suppliers. On a smaller scale, Walmart has been using their SMART Network to help improve the shopping experience of their customers in store. The SMART Network is a network of TVs placed in specific locations throughout the store. The TVs are used to play ads and show customers specific products in different locations throughout the store.9 Walmart also has a mobile network in place where customers