Wal-Mart: America's Most Successful Brand

Wal-Mart

Founded: 1962

Founder:  Sam Walton

Wal-Mart the US chain of discount stores, is a massively successful company and a retail giant holding on to the top spot on the Fortune 500 for the second year in a row in the year 2014 with annual revenues of around $250 billion.

In 2003 Wal-Mart was named by Fortune magazine as the most admired company in America and More than 100 million customers per week visit Wal-Mart stores worldwide.

Sam Walton In his book, Made in America: My Story (1992), Wal-Mart founder explained how he built the brand from its very beginnings in 1945 in Arkansas and turned it into a brand giant. At the Centre of his business philosophy was a determination to relate to customers. Number eight in his ‘Rules for Building a Business’ was: ‘Let them (your customers) know you appreciate them.’

Wal-Mart has made sure it obeys this rule in a variety of ways. It has created a homely, all-American, neighborly, personal image despite the giant size of the organization. It has deployed a variety of relationship marketing techniques, including a ‘store greeter’ whose job it is to welcome customers personally into the store and help them with a shopping cart. This human element is also backed up by some serious technology. It was one of the first companies to use cash register scanners to monitor customer behavior. Wal-Mart now deploys advanced data-mining software in all its stores in order to gauge patterns in customer spending. This information is then fed to Wal-Mart’s suppliers and used by the company to make crucial decisions about what it should and should not be stocking. However, the ultimate key to Wal-Mart’s success is scale. It tries to personalize the experience with store greeters because the stores are intimidatingly vast. They are double and sometimes triple the size of its competitors’ stores. This enables Wal-Mart to buy products in very great bulk, and therefore at cheaper prices per item. The big scale enables Wal-Mart’s ‘everyday low prices’ to be lower than those of any other store.

And the scale is getting even bigger. Its new stores are built larger each year and some of its superstores take up 350,000 square feet of floor space. However charges of monopolistic practices have been growing since the 1990s, as smaller companies are suffocated out of the market, and this could ultimately lead to a full-scale Wal-Mart backlash. There have been other problems too such as a sex discrimination class action against the company surrounding an allegation that Wal-Mart systematically pays women less than men and passes them over for promotion. Regardless of the eventual outcome, such lengthy disputes inevitably damage the company’s brand image.

However, there can be no denying that Wal-Mart’s economy of scale strategy has so far paid off. Its acquisition of Britain’s Asda supermarket chain in 1999 has without doubt strengthened its position internationally and the investment it makes in technology and store greeters is nothing compared to the growth in sales it has made over the years. Wal-Mart is now for better or worse a full-time fixture on the suburban landscape with almost 3,000 ‘big box’ discount stores across the United States and eight other countries.

Big stores equal big discounts from supplier’s equal low prices for customers and not only that but despite its enormous size Wal-Mart tries to add a human element to the store through store greeters and other tactics.

Basic principle: Respect for the Individual; Service to Our Customers and Strive for Excellence.