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Basis of Establishment of the Wall Mart’s Strategy

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Simultaneously Walton set up two other enterprises called Ben Franklin franchises and Wall – Mart Discount City. The former expanded into 15 more stores by 1962. In 1969 the company became Walt Mart Stores inc. with 15 Ben Franklin stores, 18 Wall Mart spread throughout Oklahoma, Kansas, Arkansas, and Missouri.
To-day with combined revenue reaching to 44 billion and spread throughout the 42 central and southern states the company has 1720 Wall-Marts, 208 Sam’s Wholesale Club, and 6 Wall Mart Supercentres in addition to two stores in joint ventures in Mexico.
The other factor of the success of the company is treating the employees as associate partners having access to complete information about the costs, freight charges, and profit margin. The associates play a major role in the overall and individual success of stores and achieving the company’s goals. It will be worthwhile to note here that each of the stores operates independently of the other. This kind of relationship in the organization components known as pooled interdependence. If there is poor customer service at one store and how the customers view it will have a ripple effect on the Wall-Mart as a whole.
Basis of the establishment of the Strategy:
The management of the company prominently relies on the goals achieved. It is treated as a part of the planning process. The top management provides guidelines about profits and growth. These become the basis of the setting of goals. The individual stores provide their own inputs as they have their own annual goals to achieve. However, specific tactical goals are evolved at the division and the stores level. These are then forwarded to the top corporate level for further dissemination, evaluation, and measurement for formulating a strategic overall policy.
It will be interesting to note a typical target set for an annual goal:
Opening 160 new stores. 45 new Sam’s Wholesale clubs.12 – 15 new Wall Mart Supercenter.
Increasing sales to more than 54 billion. Pursuing a Buy American plan to give preference to stocking merchandise manufactured in the United States.
The individual stores have a target to achieve a sales increase of 10% over the previous period. Once the goals are established the process of action planning is commenced to provide an outline as to how the goals are to be achieved. It is done at every level. The associates also get a share of the profit above the goals set for every store.
Monitoring: Throughout the year goals achieved are monitored as laid out. But if the Wall Mart has not been satisfied with the result those stores are sold out. The Ben Franklin stores were closed in 1976 and Wall Mart stores were replaced with it. A chain of Helen’s Arts and Crafts, the DOT discount drug chain met the same fate. Despite all the evaluation, assessment, dissemination of the in formations and monitoring quite a few of the ventures have failed.
Financial aspect: Of interest to the Board of Directors, Stakeholders, Bankers and others interested in the company:
The failures mentioned above do not give a dismal future of the company.