Wal-Mart's Foreign Expansion

INTRODUCTION

Wal-Mart Stores, Inc. operates retail stores in various formats around the world. In their own words - “We are committed to saving people money so they can live better. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at every day low prices (“EDLP”), while fostering a culture that rewards and embraces mutual respect, integrity and diversity”. EDLP is their pricing philosophy under which they price items at a low price every day so that the customers trust that prices will not change under frequent promotional activity.

Background

In 1945 with $20,000 in borrowed mone y, Sam Walton purchased a Ben Franklin five and d ime franchise in Newport, Arkansas (Slater 25). Six years later Walton wanted to expand, but his wife refused to live outside a small town. He opened the first Walton 5 and 10 in the small town of Bentonville, Arkansas. Eleven years later in 1962, the future of mode rn discount retailing was born as Kmart, Target, and the first Wal-Mart Discount City all opened their doors for business. Sam Walton found his market niche in small towns catering to the needs of rural and suburban families.

Lacking capital, Wal-Mart grew slowly, opening only fifteen stores in the next eight years. In 1970, Wal-Mart stock was offered on the New York Stock Exchange. By 1980, 276 stores were spread across eleven states. The rest, as they say, is history. Business was booming for Wal-Mart during the 1980’s and Wal-Mart dominated the market with 1400 stores.

Wal-M art Today

With more than 7900 stores world wide, Wal-Mart is the largest retailer in the world. The numbers tell the story of this reigning global retail king. In fiscal year ending January 31, 2006, sales were $312 billion. And the projected sales of 2010 are $405 billion. Wal-

Mart’s almost unstoppable international success sets a high standard for the future of global retailing. In his autobiography Made in America,...