Academic journal article Journal of the International Academy for Case Studies

The Wal-Mart Stores, Inc.: An American Dream That Touched the World

Academic journal article Journal of the International Academy for Case Studies

The Wal-Mart Stores, Inc.: An American Dream That Touched the World

Article excerpt

Throughout my career, I've always emphasized performance. And I'm really proud of the performance of our team around the world and the results Wal-Mart delivered for fiscal year 2010 in a year challenged by a difficult economy in all of our markets. Our results reflect the underlying strength of our business and our strategies to improve shareholder value.

Michael T. Duke

President and Chief Executive Officer

Wal-Mart Stores, Inc.

CASE DESCRIPTION

In 2011, Wal-Mart grew through the opening of additional stores across the United States and other countries. While the company sales were strong, the U.S. operating income was sluggish with a mere 3.1% growth versus a 5.5% growth in the previous year. Looking for additional growth opportunities, Wal-Mart planned to open convenience stores (c-stores) in a number of markets including urban and rural markets both in the U.S. and in its international segments.

This case is intended to demonstrate how Wal-Mart used its distinctive competencies and competitive advantage in the marketplace; what challenges it encountered; and what strategies it should adopt to sustain growth.

CASE SYNOPSIS

Can a teen named "most versatile boy " by his high school classmates become the leader of the world's largest corporation? In America, everything is possible, especially when that same teen believed "high expectations are the key to everything" (Bio True Story, 2013). As a star quarterback (Hickman High), Eagle Scout, and with a degree in Economics from the University of Missouri, Sam Walton was an enigma. Married 49 years to the same woman, and a father of four, this ardent huntsman and recreational enthusiast, retained a humble image favoring his red Ford F150 pickup (vintage 1979) with which he drove to work. However, as a man of business, Walton, known as Mr. Sam, was an unconventional yet strategic retail pioneer. Mr. Sam was innovative, decisive, and perceptive. Walton believed among other values that to be a successful in business one must "swim upstream." He advocated a company should "Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction" (Walton, 1993, n. p.). Finding this niche is exactly how Walton built an empire even surpassing the famed Sears, Roebuck & Company in 1991. In fact, while the U.S. GDP plummeted between 1990 and 1991, and the country's economy was stalled for nine months drudging through a recession, Wal-Mart managed to increase its sales by at least 40% (bio True Story, 2013).

Most recently, Wal-Mart has weathered well the economic storms of the past decade, taking no financial losses. In 2011, although Wal-Mart sustained growth, it did so only through the opening of additional stores across the United States and other countries. Further, while companywide sales were strong, the U.S. operating income was sluggish with a mere 3.1% growth versus a 5.5% growth the previous year. Looking for additional growth opportunities, Wal-Mart planned to open convenience stores (c-stores) in a number of markets including urban and rural markets both in the U.S. and in its international segments.

Thus, as the best positioned retailer in the world, Wal-Mart's strategic plan and business model were based on a productivity loop of low prices and low operating costs, which retained its competitive advantage as the low price leader. It was deemed a powerhouse in and of itself. As the number-1 retailer in the world, the company employed 21.1 million associates in more than 8,970 stores. Wal-Mart's international division, which comprised 26% of its sales, experienced a fast growth pace. Wal-Mart readily surpassed Europe's Carrefour, Metro AG and Tesco combined. It was the number-1 retailer in Canada and Mexico and operated in Asia (owning 95% of the Japanese retailer SEIYU), Africa, Europe, and South America. …

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