Walmart a Financial History

Wal-Mart

Julianna Yount

Kaplan University

Wal-Mart

History of Wal-Mart

Without doubt, Wal-Mart is currently the world’s largest retail store. Started by Sam Walton in 1962, the company has experienced tremendous growth over the years and now has 8,000 stores in fifteen different nations. Although Wal-Mart had humble beginnings, it has managed to get a significant market share by ensuring to establish efficient supply chains and selling its products at relatively low prices. In addition, Walton intended to make more savings through the payroll, which he had realized was a significant expense in his company. Walton realized that by controlling the payroll, he could increase his profit margins remarkably. Within no time, cost cutting had become a strong culture at the company. Walton chose to lead a modest lifestyle and often framed that as a pursuit for better living standards for all Americans (Roberts & Berg, 2012). He encouraged his employees, including business executives, to reduce their expenses to ensure that the company makes maximum profits.  In 1971, he initiated a profit-sharing plan, in which employees could contribute part of their wages with an objective of acquiring subsidized Wal-Mart shares. Wal-Mart’s also became successful because it consistently relied on technology to boost its operations. By 1970s, the company was already using computers to link operations at store level to its warehouses. This move enabled Wal-Mart to stay ahead of competition because it could reduce or eliminate errors as well as keep proper track of its stock items. Upon Walton’s death in 1992, the media exposed malpractices involved in its sourcing, which caused the company’s stock to decline 3 percent. Moreover, profit margins were declining fast, which led David Glass, who was heading the company at the time, to make several ambitious investments in technology, distribution, and construction, a move that scared off investors (Frank,...