Walmart-Case Analysis

Topics: Wal-Mart, S. Robson Walton, Department store Pages: 16 (4935 words) Published: February 17, 2010
Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. It is world’s largest public corporation by revenue and is founded by Sam Walton in 1962. It is the largest private employer in the world and the fourth largest utility or commercial employer. Other key facts include: •Employs 1.8 million in over 6,700 stores in 14 countries •Serves 175 million customers per week generating an average of $6.6 billion in weekly sales Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, as well as the largest toy seller in the U.S. It also owns and operates the North American Company, Sam’s Club. Wal-Mart’s business segments are: Wal-Mart Stores, Sam’s Club and Wal-Mart International. Wal-Mart is a discount store and provides cost leadership strategy to public. According to the Fortune 500 index of the wealthiest and most powerful corporations in the world, Wal-Mart holds the number one spot, ranked by its total sales. CASE OBJECTIVE

This case objective is to study Wal-Mart’s history, external environment, internal environment, perform a SWOT analysis, analyze its business strategy, performance measures, and to provide strategic recommendations. Moreover, Wal-Mart’s “glory days are over” and its stock is “dead money”. So, what had worked in the past for Wal-Mart was no longer sustainable in the current competitive environment. The president Lee Scott wondered whether he should somehow adjust Wal-Mart’s course or to change efforts he had started over the past few years would begin to have a positive effect. These statements and facts will be addressed and discussed in the course of the paper and presentation. WAL-MART’S BACKGROUND

1962: Sam Walton founds the first Wal-Mart in Rogers, Arkansas Before opening Wal-Mart, Sam Walton traveled the country studying everything he could about discount retailing. He became convinced American consumers wanted a new type of store. Trusting his vision, Sam and his wife Helen put up 95% of the money for the first Wal-Mart store in Rogers, Arkansas.  

1972: Wal-Mart goes public
Discounters such as Kmart quickly expanded in the 1960s; while Sam only had enough money to build 15 Wal-Mart stores. In 1972, Wal-Mart stock was offered for the first time on the New York Stock Exchange. With this infusion of capital, the company grew to 276 stores in 11 states by the end of the decade. Other important dates are:

1979: The first company to reach $1 billion in sales
1983: Opened the first Sam’s Club in Midwest City, Oklahoma •1988: First supercenter in Washington, Missouri
2002: Ranked #1 on the Fortune 500 listing
Recent History
Wal-Mart’s growth soared in recent years, and since 2006, the company has added nearly one new store every day. The total retail store presence has reached 6,782 units worldwide as of February 8, 2007 due to its rapid expansion plan. As Wal-Mart’s presence continued to grow, so did its sales, to a record $345 billion in the fiscal year ended January 31, 2007. The president of Wal-Mart is currently Lee Scott. IMPORTANT PERSONALITIES AND LEADERS

Wal-Mart is comprised of very important leaders. To start, here is the history of leadership succession in Wal-Mart as depicted in Exhibit 6 of case 28: History of Leadership
Succession at Wal-Mart

1962Sam WaltonSam WaltonSam Walton
1984David GlassSam WaltonSam Walton
1988David GlassDavid GlassSam Walton
1992David GlassDavid GlassRob Walton
2000H. Lee ScottH. Lee ScottRob Walton
Decision Makers
“To review the Company’s ongoing performance, focus on initiatives to drive sales and customer service, and address broader issues,” is the job for the twenty-five senior Wal-Mart officers that meet via weekly videoconferences. The most powerful amongst them is S. Robson (Rob) Walton. There are eight senior officers that are...
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