Wal Mart Background Essay

1012 words - 5 pages

Company background
Wal-Mart is the world's largest retailer by annual sales and number of employees, tracing its history back to 1962 when it was first opened in US (guardian.co.uk). Wal-Mart operates in 27 countries worldwide under 69 different names including the acquisition of ASDA in the UK. Wal-Mart has reached $1bn in sales in 1980 and reached $414bn in 2012 and is currently employing 2.2 million employees worldwide.
Wal-Marts stores offer merchandise such as housewares, electronics, small appliances, clothing and groceries. It has 13.4% of the market share in the US (CNBC, 2012) and 17.3% (Guardian, 2012) in the UK, being second largest retailer in the country after Tesco.
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When Wall-Mart acquired ASDA in 1999 ASDA has been using Wall-Marts strategies, the most important one-keeping the prices low. Wall-Mart has been successful in this field by cutting their costs. They are using more efficient vehicles, planning on reducing energy consumption by 35% by 2015 (your.asda.com) as well as reducing packaging which helps them in reducing costs and keeping their prices as low as possible. ASDAS main goal is to keep its prices low and they have been very successful at this. ASDA's slogan "Saving you money everyday". They also promise that your shopping at ASDA will be 10% cheaper when compared to their main competitors. They also have "Roll-back" campaign that offers temporary or permanent price reduction on thousands of products that help to save money for consumers. This strategy first started in US and was adopted in UK later on. Since the crisis economy has been unstable with high unemployment and inflation above 2% as well as recent VAT increase made consumers more cautious about spending, despite that ASDA has kept their prices low. This has increased their success in the market and is reflected on their income statement with a gradual turnover growth since 2007 despite the economic slowdown. Low prices played important role after the acquisition and has helped Wall-Mart to succeed in UK and increase their market share.
(Source: Key Note)

Differentiation strategy is when companies are"...creating differences in the firm's product or service offering by creating something that is perceived industry wide as unique and valued by customers" (Y.Zhu, 2010). It can be anything from high quality products, customer service or accurate order processing when online shopping. Shoppers have become more conscientious nowadays and good value is not always enough. Before ASDA was acquired by Wal-Mart in 1999, ASDA only sold food products and in 1989 has introduced George clothing range. (your.asda.com). After...

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