Case Study Wal Mart
Situation and Context
Wal-Mart, a United States based company, was the second largest company in the world in 2007 with net sales of nearly $345 billion. It had spread it's activity from the general discount merchandise to food, digital photo services, vacation planning , internet access, flower deliver, DVD rentals and financial services. Wal-Mart had its strong base of operations in the US amongst the rural markets and while it was already noticing competition from Target, this competition reached fierce levels when Wal-Mart started shifting its operations towards urban areas. Wal-Mart's other competitors were Kmart which merged with Sears to become the third largest retailers. Next to these two major retailers, warehouse stores for specialty markets had become very successful and were challenging general retailers.
Wal-Mart was also faced with PR issues in the US as it had dropped before the end of 2006 to the 12th place in the rankings of Fortune magazine from being the most admired company in 2004. The low wages for its employees, the employment of mainly part-time employees and the reduced expenses associated to health-care coverage lead to this decline. There were also allegations that it didn't enforce child labor and worker-safety rules in relation with its international suppliers. By 2005 there were two unions in the US that were driving "The most relentless PR assault on Wal-Mart" according to Fortune magazine. In 2004, Wal-Mart lost up to 8% of consumers due to these issues according to McKinsey & Co.
As a response Wal-Mart had started a great PR initiative in 2005, together with the largest PR firm in the US to highlight it's new low-cost generic drug product, it's contribution to Hurricane Katrina relief and to highlight it's environmental sensitivity.
While all these events were unfolding on its home front, Wal-Mart was expanding internationally. Both in Canada and in central and south America Wal-Mart expanded and flourished. Although
Wal-Mart, a United States based company, was the second largest company in the world in 2007 with net sales of nearly $345 billion. It had spread it's activity from the general discount merchandise to food, digital photo services, vacation planning , internet access, flower deliver, DVD rentals and financial services. Wal-Mart had its strong base of operations in the US amongst the rural markets and while it was already noticing competition from Target, this competition reached fierce levels when Wal-Mart started shifting its operations towards urban areas. Wal-Mart's other competitors were Kmart which merged with Sears to become the third largest retailers. Next to these two major retailers, warehouse stores for specialty markets had become very successful and were challenging general retailers.
Wal-Mart was also faced with PR issues in the US as it had dropped before the end of 2006 to the 12th place in the rankings of Fortune magazine from being the most admired company in 2004. The low wages for its employees, the employment of mainly part-time employees and the reduced expenses associated to health-care coverage lead to this decline. There were also allegations that it didn't enforce child labor and worker-safety rules in relation with its international suppliers. By 2005 there were two unions in the US that were driving "The most relentless PR assault on Wal-Mart" according to Fortune magazine. In 2004, Wal-Mart lost up to 8% of consumers due to these issues according to McKinsey & Co.
As a response Wal-Mart had started a great PR initiative in 2005, together with the largest PR firm in the US to highlight it's new low-cost generic drug product, it's contribution to Hurricane Katrina relief and to highlight it's environmental sensitivity.
While all these events were unfolding on its home front, Wal-Mart was expanding internationally. Both in Canada and in central and south America Wal-Mart expanded and flourished. Although