Essay about Wal-Mart

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The founder of the Wal-Mart chain, Sam Walton was born in March 1918 in the town of Kingfisher, Oklahoma. Graduating from the University of Missouri, Sam enlisted in the Army for the World War II effort. Upon his return, Sam worked for a while at the J.C. Penney group of stores. He began to realize that opportunities existed in the large scale discount retailing business (nickel and dime stores). The idea and business philosophy of Wal-Mart borrowed from the nickel and dime stores of earlier times, and consisted of getting National Brands in bulk at a discount based on volume purchases; the company would then stamp its mark and resell the goods at a slight markup, this rate being however less than the other competing Mom and Pop stores …show more content…
Yet in the sphere of business, he was a radical trend-setter. Choosing to be innovative and aggressive, the founder of Wal-Mart took the large scale discount retailing business to new heights and down new avenues. Sam borrowed a lot of ideas for his early stores from Kmart and others. But it was what he chose to do differently – the ways he put his own stamp on the basic business model – that made Wal-Mart so fabulously successful. His model was the same as Kmart's, but his strategy was unique.

From the very beginning, Walton chose to serve a different group of customers. At that time, the 10 largest discounters (in 1962) focused on large metropolitan areas and cities like New York. Wal-Mart's key strategy was to put good-size stores into little one-horse towns which everybody else was ignoring. He sought out isolated rural towns with populations between 5,000 - 25,000, and correctly bet that if his stores could match or beat the city prices, people would shop at home. Since Wal-Mart's markets tended to be too small to support more than one large retailer, eventually the small local competitors went out of business, making the whole area Wal-Mart territory.

Wal-Mart also took a different approach to merchandising and pricing than its competitors. While competitors relied heavily on private label goods, second-tier brands and price promotions, Wal-Mart promised National Brands at everyday low prices. The company pursued efficiency and

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