Wal-Mart vs K-Mart
WAL-MART VS K-MART: A COMPARISON OF TWO BUSINESS STRATEGIES
By Jason Ramirez
Management & Strategy
Wal-Mart and K-Mart are two of the largest and most successful retail outlets in the country. Both retailers have been around for fifty years and made their success out of low cost retailing. In 1990 Wal-Mart surpassed K-Mart as the largest retail outlet in the country. In this paper I will discuss the strategies being used by both firms, the success/failures of these strategies and conclude with a comparison of the two. Wal-Mart was founded in the early 1960’s in Rogers, Arkansas by Sam Walton. Sam Walton wanted to create a store that would provide its customers with quality products at the lowest price possible. Sam Walton told Wal-Mart associates “Customers are the reason why we're in business. And when we exceed their expectations, we're at our best. From the day the doors opened in Rogers, on July 2, 1962, Wal-Mart’s culture has been built on a common purpose: saving people money so they can live better.” (Duke, 2012 pg. 1) Wal-Mart has adopted a very successful business strategy of being the retail industry’s low-cost provider. Because Wal-Mart is the largest retailer in the world it is able to dictate the price it pays for merchandise. Wal-Mart buys its merchandise in huge volume amounts and because of this, the organization is able to get discount pricing. Wal-Mart is also very successful at cutting cost. The retail giant keeps up with technology and uses this technology to save money. For example, Wal-Mart led the way for establishing the universal bar code system and “became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain.” (Wilbert, 2012 pg.1) K-Mart was founded in 1962 by Sebastian S. Kresge. K-Mart was the original founder of the low cost provider strategy. K-Mart built its
By Jason Ramirez
Management & Strategy
Wal-Mart and K-Mart are two of the largest and most successful retail outlets in the country. Both retailers have been around for fifty years and made their success out of low cost retailing. In 1990 Wal-Mart surpassed K-Mart as the largest retail outlet in the country. In this paper I will discuss the strategies being used by both firms, the success/failures of these strategies and conclude with a comparison of the two. Wal-Mart was founded in the early 1960’s in Rogers, Arkansas by Sam Walton. Sam Walton wanted to create a store that would provide its customers with quality products at the lowest price possible. Sam Walton told Wal-Mart associates “Customers are the reason why we're in business. And when we exceed their expectations, we're at our best. From the day the doors opened in Rogers, on July 2, 1962, Wal-Mart’s culture has been built on a common purpose: saving people money so they can live better.” (Duke, 2012 pg. 1) Wal-Mart has adopted a very successful business strategy of being the retail industry’s low-cost provider. Because Wal-Mart is the largest retailer in the world it is able to dictate the price it pays for merchandise. Wal-Mart buys its merchandise in huge volume amounts and because of this, the organization is able to get discount pricing. Wal-Mart is also very successful at cutting cost. The retail giant keeps up with technology and uses this technology to save money. For example, Wal-Mart led the way for establishing the universal bar code system and “became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain.” (Wilbert, 2012 pg.1) K-Mart was founded in 1962 by Sebastian S. Kresge. K-Mart was the original founder of the low cost provider strategy. K-Mart built its
References: Cheng, A. (2012, October 10). Wal-Mart Outlines Strategy - WSJ.com. Business News & Financial News - The Wall Street Journal - Wsj.com. Retrieved December 8, 2012, from http://online.wsj.com/article/SB10000872396390443749204578048842451207454.html Duke, M. T. (2012). 2012 Walmart Annual Report - CEO Letter. Walmart Corporate - We save people money so they can live better. Retrieved December 8, 2012, from http://www.walmartstores.com/sites/annual-report/2012/CEOletter.aspx Lampert, E. S. (2012, November 15). Sears Holdings Investor Information. Sears Holdings Corporation - Corporate Website. Retrieved December 8, 2012, from http://www.searsholdings.com/invest/ Schultz, E. J. (2012, March 19). Update your user profile - Profile - Advertising Age. Advertising Agency & Marketing Industry News - Advertising Age. Retrieved December 8, 2012, from http://adage.com/article/news/kmart-lost-attention-discount-shoppers/233369/ Wilbert, C. (n.d.). HowStuffWorks "How Wal-Mart Works". HowStuffWorks "Business & Money". Retrieved December 8, 2012, from http://money.howstuffworks.com/wal-mart.htm