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Running head: Fortune 500

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Running head: Fortune 500 Companies- Walmart Corporation Fortune 500 Companies: Walmart Corporation Inc. Dawn Stewart

 

Kaplan University

 

October 20, 2016 Fortune 500 Companies- Walmart Corporation 2 Introduction

 

The Walmart Inc. still ranks as the best performing company on the fortune 500 companies

 

list since 2015. Companies listed in the Fortune 500 Companies are corporations either public or

 

private that operate in U.S and exhibit the highest growth of their gross revenues. The Fortune

 

Magazine publishes the list of the top performing firms compiled in a decreasing order based on

 

the gross revenue and income. According to The Fortune 2016, Walmart has been ranked the top

 

company in their list since 2015.

 

Walmart?s history and the factors that affected its growth

 

Founded by Walton in 1962, the first Walmart was based in Rodgers, Arkansas and dealt with

 

the sale of foodstuffs and other household commodities. At startup, Walton avoided stiff

 

competition from large scale retailers by focusing on rural markets. The company?s revenue

 

earnings increased and its growth escalated in 1983. In 1988, Walmart took advantage of the

 

developments in the new format of retail shops and opened Walmart Supercenters and

 

warehouses in which people could buy merchandise and grocery products. As the new

 

supercenters and retail stores opened across U.S, the company?s focus was on cost controls,

 

customer satisfaction and attention and improving the efficiency of its distribution channels.

 

Walmart Inc. decided to go global in 1991 when it expanded its operations to international

 

markets by establishing a new retail store in neighboring countries such as Mexico (Walmart:

 

Our Story", 2016; Ghazzawi, Palladini & Martinelli-Lee, 2014).

 

Although Walmart Inc.?s founder Walton died in 1992, both his mission and low price models

 

would be hardly be forgotten because it fame had increased worldwide. Governed by their ?Save

 

More, Live Better? mission, Walmart Company became more committed to growth development Fortune 500 Companies- Walmart Corporation 3 and ensuring optimum return on their shareholders? investments. Walmart Inc. then expanded

 

their operation by opening stores in international markets such as Germany, Canada and China.

 

In 1997, Walmart Inc. had opened over 1928 retail stores globally, employed over 365,000

 

associates and celebrated sales revenue worth $100 billion. The company changed their shopping

 

experience in early 2000 by allowing their customers to shop online and outsourced their retail

 

markets to UK and Japan (Ghazzawi, Palladini & Martinelli-Lee, 2014).

 

Walmart Inc. contributed $18 million and other supplies to the 2005 Katrina Hurricane and

 

promised to contribute to environmental sustainability, adopt the use of renewable energy, and

 

made a commitment to sell products aimed at sustaining the environment and the wellbeing of

 

people. In 2006, the company also contributed to the society by introducing $4 million a drug

 

prescription program and its annual sales rose to over $400 billion. Additionally, Walmart

 

promised eradicate hunger among the U.S citizens by donating $2 billion by early 2016. Walmart

 

Inc. held another mega celebration in 2012 where it celebrated its fifty years of helping people

 

shop conveniently and save money. The company had over 10,000 stores in based in 27 different

 

nations and had employed over 200 million associates to serve more than 200 million customers

 

who presented at their stores weekly. Walmart Inc. is currently focusing on introducing a

 

?Walmart To Go? system that will allow customers to order certain items from their company

 

website and have the products delivered to their homes with a specified timeline (Ghazzawi,

 

Palladini & Martinelli-Lee, 2014).

 

Social, Economic and Political Factors Affecting Walmart Operation.

 

As Rosenfeld (2008) notes, some socialists have perception that the retail stores of Walmart

 

increases traffic jams and consumerism among communities. However, Walmart is the largest

 

for-profit company globally that sells products at the lowest in a fast rate of turnover cost. The Fortune 500 Companies- Walmart Corporation 4 company is able to achieve a competitive advantage over its competitors because it has perfected

 

in principles at various stages of distribution and the retail process that allows them offer the

 

lower costs. Nonetheless, Walmart confronts a social problem in its system of labor control and

 

low wages for their workers. Walmart has a hiring system with poor wage scales and does not

 

consider the extra hours worked by their fulltime employees who may work for over 20 hours.

 

According to Ryan (2011), the company also opposes employee unions, strictly monitors its

 

employees and exhibits prevalent cases of female discrimination. The management usually

 

compels managers of various stores to reduce the costs of labor by underpaying their employees,

 

which they successful accomplish because of the dominance in the retail market (Huang, Hansen

 

& Anderson, 2012).

 

Walmart id focused on serving a serving a low-wage economy by concentrating on lower

 

consumer prices. Because of the of the government?s failure to regulate the labor market and the

 

decreasing high paying manufacturing jobs, Walmart Inc. has been able to continue with their

 

low wage workers as well as not providing health benefits. It is therefore necessary that the

 

political leaders and law enforcers intervenes and forces Walmart Inc. to change their current

 

labor malpractices. Some communities have labor laws regarding working conditions and

 

minimum wages that prevent Walmart from investing in their environs. Accordingly, Walmart

 

should review its labor policies as well as standards and increase their wages is in order to be

 

accepted in the economy of any community (Huang, Hansen & Anderson, 2012).

 

Walmart?s recent and Present operating Results

 

Walmart?s financial performance has been improving within the past 6 years. Although the

 

company?s gross profit margin and its total operating income remained constant since 2012, there

 

has a significant increase in its net sales and gross revenue. Fortune 500 Companies- Walmart Corporation 5 Table 1: Walmart?s Recent and Present Financial Performance

 

Operating results (Millions)

 

Total revenue ($)

 

% Change of Total Revenue

 

Net Sales ($)

 

% Change of Net Sales

 

Gross Profit Margin ($)

 

Operating Income ($) 2016

 

578,651

 

2.2%

 

482,229

 

2.0%

 

27.3%

 

37,147 2015

 

476,294

 

1.6%

 

473,076

 

1.6%

 

24.3%

 

26,872 2014

 

468,651

 

5.0%

 

465,604

 

5.0%

 

24.3%

 

$27,725 2013

 

466,509

 

6.0%

 

443,416

 

6.0%

 

24.5%

 

26,491 2012

 

446,509

 

3.4%

 

418,500

 

3.4%

 

24.8%

 

25,508 Brief SWOT Analysis

 

The SWOT analysis involving the strengths, weaknesses, opportunities and threats of

 

operation is necessary to provide a better understanding of the Walmart Inc.?s strategies and

 

current position (Pahl & Richter, 2007).

 

Strengths

 

1. Walmart has a Global Supply Chain with more than 10,000 stores established in 27

 

nations worldwide, which increases their market share, revenue and profit earning and

 

purchasing power from producers and suppliers.

 

2. Walmart Inc. has a Global Organizational size that provides vast sources of revenue

 

required to finance its expansion and operation in other countries.

 

3. The company has a rich product portfolio, which allows it to serve a wide range of

 

customers regardless of their needs, demographics and interests.

 

4. Walmart focuses on a cost leadership strategy by selling their products at a lower cost

 

relative to their competitors, which has helped them to attract more customers, make

 

more sales and increase their economies of scale. Fortune 500 Companies- Walmart Corporation 6 5. The company operates as a multinational corporation other than relying on U.S markets,

 

which has led to its rapid growth.

 

Weaknesses.

 

1. Walmart Inc. as been faced with many labor lawsuits, which have not only costed it over

 

one million dollars but has tainted its corporate image (Tolle, 2015).

 

2. The company experiences high rates of employee turnover due to bad working conditions

 

and low wages, which increases its operational costs due to frequent onboarding.

 

3. Walmart has a limited differentiation of its products relative to their competitors and

 

relies on the low price strategy, which is risky for its future operations because other

 

competitors may start offering products at low prices.

 

4. The cost leadership strategy adopted by the company reduces their profit margins and the

 

strategy can be copied by competitors more easily by simply lowering their prices.

 

Opportunities.

 

1. Walmart can outsource their retail operations and establish more stores in most of the

 

developing countries where existing retailers sell their products at higher prices.

 

2. The purchasing of Walmart?s own products is likely to increase because most consumers

 

are accepting products with Walmart?s label by over 40 percent compared to other brands.

 

3. Walmart?s groceries market is likely to increase as more people advocate for healthy

 

eating

 

4. The Walmart To Go program will benefit from the increasing online shopping in U.S.

 

Threats

 

1. Walmart Inc. confronts stiff competition from other global, online and local retailers Fortune 500 Companies- Walmart Corporation 7 2. Most of the products sold by Walmart are believed to be fast foods because they have

 

been processed and there unnatural yet more U.S people are advocating for healthy eating

 

3. Local communities offers more resistance to Walmart?s initiative to establish superstores

 

in their neighborhoods for fear that their price leading strategy may cause closure of the

 

local stores (Quinn, 2005).

 

Factors that Walmart needs to Predict, Plan for and adjust to in the future

 

The future growth of Walmart Inc. is based on expansion to foreign markets, return on

 

shareholders? equity and leverage. The company?s opportunities for growth will therefore depend

 

on sales from new stores, existing stores and online shopping, which will require that the

 

company becomes innovative and make more investments in its major market segments.

 

Walmart will achieve leverage by focusing on reducing the costs of the operation, enhancing the

 

efficiency of their capital expenditure and increasing their sales. This will enable Walmart to

 

increase their shareholder?s value, while offering products at lower prices (Quinn, 2005).

 

In planning for future growth and long-term operation, Walmart should focus on factors such

 

as employing, training and retaining skilled and experienced workforce right from managers to

 

part-time employees. The company also needs to address the low wage concern in order to

 

reduce the turnover and retain most of its skilled employees. Furthermore, Walmart seeks to

 

address the changing global market and competition by hiring data analysts, entrepreneurs,

 

online shopping professionals and technology specialists. Moreover, Walmart looks forward to

 

contributing to community development by increasing their charitable donations meant to

 

improve the well-being of societies especially in societies where it operates. The company is

 

working on plans to have a sustainable supply chain worldwide and assist employees on part Fortune 500 Companies- Walmart Corporation 8 time to find full time jobs. The risk factors to should make Walmart adjust its future plans

 

include possible increase in interest rates, fluctuating rates of currency exchange and global

 

economic recession (Ghazzawi, Palladini & Martinelli-Lee, 2014). References Fortune 500 Companies- Walmart Corporation 9 Quinn, B. (2005). How Walmart Is Destroying America And The World: And What You Can Do

 

About It. Random House Digital, Inc..

 

Huang, Q., Nijs, V., Hansen, K., & Anderson, E. (2012). Wal-Mart's Impact on Supplier Profits.

 

Journal Of Marketing Research (JMR), 49(2), 131-143.

 

Ghazzawi, I. A., Palladini, M., & Martinelli-Lee, T. (2014). The Wal-Mart Stores, Inc.: An

 

American Dream That Touched the World. Journal of the International Academy for

 

Case Studies, 20(2), 13-33.

 

Tolle, N. (2015). From the Courts. Employee Benefit Plan Review, 70(1), 18.

 

Rosenfeld, Herman. (2008). Challenging Walmart: Globalization, supply chain dominance and

 

sweatshop labor. http://www.globalresearch.ca/challenging-wal-mart. Retrieved 16/09/2016.

 

Makadok, R., & Ross, D. G. (2013). Taking industry structuring seriously: A strategic

 

perspective on product differentiation. Strategic Management Journal, 34(5), 509-532.

 

Walmart: Our story. (2016). Wal-Mart Stores, Inc. http://corporate.walmart.com/our-story/.

 

Retrieved 16/09/2016.

 

Jacobs, K. (2008). Living Wage Policies and Wal-Mart. Social Policy, 38(2), 6.

 

Pahl, N., & Richter, A. (2007). SWOT Analysis. Idea, Methodology And A Practical Approach.

 


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