Texas slogan

First, the expansion process of Wal-Mart

1, hide your strength and bide your time ―― 1960s.

1962, the first Wal-Mart store was born in Rogers City, a remote town in Arkansas, USA. At that time, Wal-Mart was in the early stage of its business, facing powerful retail giants such as Sears and Kmart. Fortunately, most of the business of these large retail enterprises is concentrated in large and medium-sized cities, but they ignore small towns, because according to the common sense of American retail enterprises, it is not feasible to open discount stores in towns with a population of less than 50 thousand, so these retail enterprises. Sam walton Mingrui, the founder of Wal-Mart, seized this favorable business opportunity and boldly formulated the strategy of "encircling the city from the countryside", choosing small towns as its market segments instead of competing with the strong in big cities. Moreover, Wal-Mart's specific expansion strategy is to fill a county by state until the market of the whole state is saturated, and then expand to another state. Therefore, Wal-Mart did not develop in the first 65,438+00 years after its opening. There are only more than 50 discount department stores and more than 65,438+00 Franklin grocery stores, with an annual turnover of $80 million. Compared with more than 500 Kmart stores in the same period, this city with sales of $3 billion is dwarfed. However, sam walton did not change his established strategy easily. He still made steady progress step by step, starting with the small town market.

2. First appearance-1970s.

The 1970s was a decade of rapid expansion of Wal-Mart, and its sales revenue and profit increased by 40% every year. By the fiscal year of 1980, the number of Wal-Mart stores had reached 276, with an annual operating income of1248 million dollars and a profit of 4 10/00000 dollars, which were 40 times and 300 million dollars respectively before 10. Its figure has already gone out of the town of Fiona Fang, Fiona Fang, hundreds of kilometers in the northwest corner of Arkansas, and its footprint has begun to spread all over 65,438+00 States in the midwest of the United States. Wal-Mart's business format has also changed from grocery stores to chain discount stores. At this time, Wal-Mart is full-fledged, and it is time to expand to the whole country and challenge the national retail giants. From a strategic point of view, Wal-Mart has a solid foundation and stable cash flow in urban areas, which is its advantage. At the same time, due to the fierce competition in the supermarket industry, some supermarket chains are facing bankruptcy, which provides a good opportunity for Wal-Mart to expand its scale through mergers and acquisitions, so the SO strategy became the core of Wal-Mart's development strategy in the 1970s.

198 1 year, Wal-Mart ushered in its first M&A opportunity. Big K Group, a discount department store chain based in Tennessee, suffered losses and intends to sell it. Tennessee is located east of the Mississippi River and belongs to the south in the traditional concept of geographical division in the United States. The company is strong in this field, with 65,438+020 branches, while Wal-Mart has been developing in the midwest, with almost no branches east of the Mississippi River. Therefore, Sam wants to take this opportunity to enter the southern United States and make a breakthrough in this region. In addition, Kmart had not yet entered the south, and Sam hoped to enter the region before Kmart, but the company was too big, with more than 65,438+000 branches in nine states in the southeast. I don't know if it can be digested after swallowing it. After two years of hesitation, the Wal-Mart Executive Committee voted, and sam walton made the final decision and cast a decisive vote.

Through this key acquisition, Wal-Mart entered the southeast including Alabama, South Carolina and Georgia. Since then, Wal-Mart has rapidly expanded at the rate of adding 65,438+000 stores every year, and sometimes even reached 65,438+050 stores, a considerable part of which was achieved through mergers and acquisitions. After the merger and expansion, the number of Wal-Mart stores reached 349, distributed in the vast land of 65,438+03 states, which came from Illinois in the north, Texas in the south and South Carolina in the east. Sales revenue also jumped to $2.4 billion, becoming the second largest discount department store chain in the United States at that time, almost tied for first place with Kmart.

3. Different ―― In the 1980s,

As of 1983, Wal-Mart has 5,565,438+0 branches, but its operation center is located in the south of the traditional central and western regions. In Sam's own words, "this is the area where we do best." At the same time, in order to maintain the supply capacity, the company has established six distribution centers, with annual sales of 3.37 billion US dollars and profits of 65.438+240 billion US dollars, up by 37.8% and nearly 50% respectively over the previous year. However, until now, most of Wal-Mart's stores are located in small towns with only 5,000 to 25,000 residents, and 1/3 stores are located without any similar retail enterprises competing with them. During the period of 1985, the number of Wal-Mart stores increased to 745, distributed in 20 states, reaching the axis of Iowa in the north, New Mexico in the southwest and North Carolina and Virginia in the east, which are closer to the densely populated core areas in the northeast. 1986, Wal-Mart entered Wisconsin in the central region and Minnesota in the west of Wisconsin in the following year, which is the headquarters of Target, another successful discount department store chain. This shows that Wal-Mart has become a national company, and it is inevitable to start a frontal attack on other big companies in the industry. At this time, Wal-Mart's strategy has changed from SO to ST, on the one hand, it uses its own advantages in management and technology to open up markets in big cities, on the other hand, it needs to accept direct challenges from stronger competitors.

1987, Wal-Mart had 980 stores, distributed in nearly half of 23 states in the United States, with total sales revenue of1200 million dollars. In 1989, Wal-Mart has two states recently; Arizona in the west and Ohio in the northeast make it close to the most developed and densely populated areas in the northeast and sub-Atlantic. In this year, Wal-Mart became the third largest retail company in America, and there are still the fastest growing companies in America. By 1990, Wal-Mart had 1402 stores in 29 states, with an annual sales income of $25.8 billion, a profit of1000 million and a total business area of nearly100000 square meters. Throughout the 1980s, Wal-Mart's sales continued to double every three years, from $65.438+0.65 billion to $26 billion, ranking first in the whole retail industry and also the most profitable retail enterprise, and its annual profit soared from $5.57 million to $65.438+0 billion. It can be said that the 1980s was a glorious 65,438+00 years for Wal-Mart. It was in these 65,438+00 years that Wal-Mart realized the initial strategic concept of "countryside surrounding cities" and changed from a regional supermarket chain to a nationwide retail giant.

4. Biography of new veterans-from 1990s to present.

However, compared with successive victories in the United States, Wal-Mart's international expansion process is not smooth. In the United States, Wal-Mart has a distribution system, technological advantages and large-scale economies of scale, but these capabilities are difficult to export abroad. In addition, the system can be re-established, but the culture cannot be simply copied. Wal-Mart tried to replicate its commemorative business model and cultural concept adopted in the United States all over the world, just like carving a boat for a sword, and the result always failed again and again. For example, in Brazil, where football is popular all over the country, Wal-Mart vigorously promotes golf clubs; In the hot weather in Mexico, Wal-Mart actively promoted roller skates; In Germany, people are detained by folk customs, and Wal-Mart shop assistants greet people with smiles to show friendship, but it will make customers wonder whether they are provocative. In May and July, 2006, Wal-Mart had to withdraw from South Korea and Germany, respectively, because of its abnormal operation in Germany, Argentina, South Korea and China and fierce competition from local enterprises.

Second, Wal-Mart's experience in scale expansion

Looking at Wal-Mart's expansion process, the important factor to create Wal-Mart's early success should be its small town strategy. Wal-Mart's brilliant success began with the rural and township markets that large retail enterprises could not enter as its main service areas, and laid a good foundation for its famous low-price strategy and high-speed growth in the future. In addition to the small town strategy, Wal-Mart's successful expansion lies in its leading technological advantages and huge distribution network. Management means can increase sales, but management means can reduce costs. The improvement of modern retail management efficiency is inseparable from the application of technology. Wal-Mart regards retail as a high-tech industry. When recruiting staff at Harvard Business School, their slogan was "Retail is a high-tech industry". For example, as early as the early 1980s, Wal-Mart contacted Macomb-Hughes, drafted a contract, and finally set up a satellite system with US$ 20.04 million. Through the global network, Wal-Mart headquarters can make an inventory of the inventory, shelves and sales of each commodity in more than 6,000 branches around the world within 1 hour. With the advanced information system, Wal-Mart's expansion is even more powerful. On the one hand, it quickly and effectively expanded the scale of the enterprise, on the other hand, it reduced the cost as a whole. The leading technological advantage has enabled Wal-Mart to maintain a high profit margin in its rapid expansion.

In the construction of distribution network, Wal-Mart takes the strategy that the expansion of distribution center is ahead of the expansion of branches, and chooses the most suitable location to establish distribution center in the business district, which is very cautious. In terms of site selection, the basic principle of monopolizing the local market before attacking the next neighboring area and the strategy of setting up about 150 branches around the distribution center have been adopted, which has created a good technical environment for the construction and application of large-scale logistics distribution centers. Wal-Mart has closely coordinated the construction of distribution centers with its urban expansion strategy, and now there are more than 50 distribution centers providing distribution services to more than 6,000 stores around the world. In the United States, they are strategically distributed in various sales areas all over the country, and most of them are only one day away from the stores they serve. Of the more than 80,000 kinds of goods operated by Wal-Mart, 85% are directly supplied by its own warehouse. By contrast, their competitors need at least five days because of the lack of their own distribution network. Shopping malls are like battlefields, and business opportunities are changing rapidly. Wal-Mart seized the competitive opportunity by relying on the developed distribution network.

In addition, Wal-Mart has always maintained an extremely rational control over the expansion speed, which means that it will not lead to the lack of funds and talents for enterprises due to excessive expansion. In transnational business, Wal-Mart is also quite restrained, and its overseas investment is quite stable until the recent 1%. Although the speed is slow, it is slow and steady. When the expansion resistance from the external environment is great, Wal-Mart adopts the overseas expansion strategy from near to far and step by step, which not only effectively reduces the expansion risk, but also accumulates valuable experience for its further overseas expansion in the future.

Third, the lessons of Wal-Mart's scale expansion.

First of all, Wal-Mart's tried-and-true town strategy in China cannot be fully applied to overseas markets. Due to the special national conditions of the United States, their families own a large number of cars, and the gap between the rich and the poor in urban and rural areas is small, which makes Americans develop the shopping habit of driving to go shopping at weekends and buying a large number of goods at one time. Therefore, building stores in remote towns in other places will not have a great impact on the business performance of stores. However, in overseas countries with more complicated national conditions, especially in developing countries with underdeveloped economy and large gap between urban and rural areas, this expansion strategy focusing on villages and towns is obviously not suitable for local conditions, so Wal-Mart can only shift its expansion focus to big cities, and big cities are the most competitive places. Wal-Mart will not only encounter stubborn resistance from local retail enterprises, but also compete with foreign competitors. Without the support of rural stores, Wal-Mart has no obvious advantage in big cities. On the contrary, because of its rigid business model and corporate culture, Wal-Mart is subject to greater social environmental resistance. Secondly, due to the limitation of technical implementation conditions, Wal-Mart's technical advantages and distribution capabilities, which are regarded as the killer, cannot function normally overseas. For example, Wal-Mart encountered the problem that advanced technologies such as logistics and distribution systems could not be used in China, which affected its expansion effect.

In short, although Wal-Mart has advantages in enterprise scale, procurement channels, logistics management and informatization level, it has not taken active measures to adapt to overseas markets, but expects the external environment to change and adapt to its business model. Therefore, in the face of great resistance from the external environment, Wal-Mart's overseas expansion in Zhang Zhilu can only be difficult. Therefore, it can be said that in today's economic globalization, market competition is not just a simple contest of enterprise strength.

[References]

[1] Wang Xianqing: Wal-Mart Retail Method [M], Guangdong Economic Publishing House, 2004.

[2] Liang Bing: cultural exclusion-Wal-Mart suffered setbacks in Europe and Asia [J], Corporate Culture, 2007( 1).

[3] Li Fei: World Famous Stores [M], Economic Management Press, 2002.

[4] Lei Yu and Chen Qingsong: middlemen killers ―― An interpretation of Wal-Mart, the world's first enterprise [M], China Times Economic Publishing House, 2004.

[5] Li Jie, Xiang: Wal-Mart-the loss of yellow smile [J], operators, 2006(9).

I suggest you read the above five books, and you will get better answers. After all, we are not employees of Wal-Mart.