The Logic Behind Discount Retailing

More recently, the recession impelled many bricks-and-mortar retailers towards a damaging focus on discounting that eroded not only many stores’ price positioning but also any point of differentiation or exclusivity.

Sam Walton’s extraordinary business strategies drove Walmart to its success and their key focus was customer satisfaction. As part of their customer centric initiatives Walmart had set up a unique pricing strategy with their “Every Day Low Prices” EDLP (Karen Robson, 2013). They would offer customers their daily needs at the lowest possible price to drive Walmart’s growth in the United States (Karen Robson, 2013) . Their pricing strategy was different than other major retailers in the U.S at the time; this provided an advantage towards rapid success and expansion (Karen Robson, 2013).

In early 1960 Dayton Department Store Company decides to launch a new discount chain store. They announced that “the new store, will combine the best of the fashion world with the best of the discount world, a quality store with quality merchandise at discount prices, and a discount supermarket… 75 departments in all.” (Target, 2016)

Sam Walton was born March twenty-nine, 1918 in a small town in Oklahoma. His father was Tom Walton and his mother was Nancy Lee. Walton lived on a farm until 1923, he moved around a lot from one small town to another. He was the youngest Eagle Scott in the state of Missouri history. While finishing his degree at the University of Missouri, Walton joined J.C. Penny as a trainee in the management program in Iowa. In 1942, Walton began the military until 1945 when he completed service. By the age of 26, he took over management of his first variety store by purchasing a Ben Franklin store in Arkansas. Afterward, he purchased his second store called the Eagle right down the street from his first variety store. Sam Walton gave birth to Wal-Mart in 1962. Later that year, Walton along with his brother Bud opened sixteen stores in several states.

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

To fully understand Walmart’s business one should first study the history of Walmart’s retail company. Born in 1918, Sam Walton married his wife Helen Robson while serving in the military. After Sam’s military term ended Sam and Helen moved around until they finally settled in the small town of Bentonville, Arkansas. Bentonville is when Sam’s Walton’s 5&10 store led him to open the first Walmart in 1962 in Rogers, Arkansas (Founder of Walmart).

One of Walton’s most important, influential and successful ideas he used at the Benjamin Franklin store were his deals. He credits the success of Wal-Mart to the fact that the profit for a product would be greater if the product was sold as a package deal, “...say I bought an item for 80 cents. I found that by pricing it at $1.00 I could sell three times more of it by pricing it at $1.20.”

Sam Walton, the founder of Wal-Mart, which is the biggest retailer in the world, had coined the famous saying ‘individuals don’t win, teams do’. There are several characteristics of Sam Walton that enabled him to be successful in his life and business dealings. Sam Walton could do anything he put his mind to. This can be witnessed in his ability to transform a small town store into a 25 billion-dollar industry at the time of his death. Also, Walton difficult childhood gave him something to strive towards later on in his life.

The paper will discuss pricing strategy that Ron Johnson or J.C Penney should have followed to save their store. Price discounts and allowances (Discounts) After reading the article “What Went Wrong at J.C. Penny?” I realized that Ron Johnson failed in his makeover in attempt to rescue J.C. Penney. He drove customers away from the store, by eliminating discounts and coupons, and replacing them with everyday low prices, and brings in new and expensive brands, which in tend, decreased sales.

When it comes to retail giants, Walmart stands tallest by a very large margin. In fact, Walmart’s retail sales more than tripled their closest competitor in 2015 (“STORES top retailers 2016,” 2016). Walmart has consistently used the same marketing strategy for many years. Their “Everyday Low Price” strategy is a well-known advertisement moniker and has driven repeat sales to customers for years (Ferguson, 2015). Another familiar sign

Sam Walton was known to be industrious, always trying to get the most out of money, and had a burning ambition to succeed. This was evident in his book Sam Walton, Made in America, My Story. He was a hard working individual who helped his family through the depression, started his own business from almost nothing and changed the field of management for ever.

In the late 1940s, a man named Sam Walton was franchising Ben Franklin’s store located in Newport, Arkansas. As a retailer, Walton continuously was in search of suppliers with best deals on merchandise. Usually, if a retailer was able to get a deal from a wholesaler they would leave their store prices at the regular price and pocket the excess money. Being the innovator he was, Walton decided to pass the savings on to the consumer and make his money through the increased volume of sales. This understanding would become the foundation of Walton’s business strategy when he developed Walmart in 1962.

The recognized giants in today’s discount retail market are Wal-Mart, Sears, Roebuck and Company, and Target, and this paper compares Wal-Mart and Target. As the competition stiffens to capture market niches, these two organizations are heading for a showdown. This work demonstrates distinctive differences in company culture, promotion within the organization, lofty goal setting, and leadership styles between these two organizations. Although this paper shows a definite competitive advantage for the Wal-Mart organization, it will also demonstrate that Target

Before proceeding onward to Wal-Mart, Walton opened 14 five and dime stores somewhere between 1951 and 1962. Walton 's model rested in the conviction that rebate stores could flourish in residential communities, with populaces of 5,000 or less, and on the off chance that you sold items at the least expensive value conceivable, thus, profits would rise. He suggested to the Butler brothers of Ben Franklins that they cut their prices down the middle, and the siblings declined. Sam chose to go on alone, and that is the way Wal-Mart was conceived.

Sam Walton 's first venture as a milk boy is when he understood the value of a dollar and the knowledge of how far a dollar could take one in life. From Sam 's first five and dime stores in the 1950 's to his opening of the first Wal-Mart in Rogers, Arkansas in 1962, no one could have predicted the enormous success of this small-town merchant. Today, fourteen years after his death, Wal-Mart continues to grow and leadership of this company continues to rely on many of the traditional goals and philosophies that Mr. Walton left behind. In keeping one step