This website uses cookies to ensure you have the best experience. Learn more

Wal Mart Case Study

1918 words - 8 pages

Ashley Wechsler
Strategic Management- 4010-21
J. Cameron Verhaal
Wal-Mart Case Study
September 16, 2014

Sam Walton started Wal-Mart in 1962. When Wal-Mart was first introduced, it was believed to be the least likely to succeed in the discount retailing business. The central focus of Wal-Mart was on price. By 1970, Wal-Mart had expanded to 30 towns, all in small towns. In order to expand Wal-Mart beyond its small region, Wal-Mart decided to go public. By the 1990s, 100 shares increased in value from $1,650 to $3,000,000. At this time, Wal-Mart had also spread throughout the United States in both large cities and small towns. Wal-Mart had many different opportunities and threats ...view middle of the document...

This was beneficial in increasing Wal-Mart’s profits. The economic general environment posed both a threat as well as an opportunity. Target customers’ income was considerably higher. Target was considered an upscale discount retailer. In areas of higher income, Target succeeded Wal-Mart in their profits. When the population’s average income was less, the more favorable prices allowed Wal-Mart to succeed. International expansion posed a threat to Wal-Mart and other large discount retailers. They found it difficult to move to international markets and they also had trouble adapting to local differences. Wal-Mart was spending a lot of money on spreading internationally. “In 2010, 31% of Wal-Mart’s capital expenditures were spent on international operations” (Hesterly, p. 1-26).
After analyzing Wal-Mart and the overall discount retail industry, using Porter’s 5 forces, I came to the conclusion that the overall expected returns in the industry were high. I concluded that the threat of entry was relatively low. There was no government regulation. Wal-Mart was constantly looking for ways to improve their stores. Wal-Mart was able to differentiate itself from its competitors because even when a competitor was selling at a lower price, Wal-Mart had a policy that they would match all competitors’ prices. They also had economies of scale, because they were able to spread all costs over more stores. The threat of rivalry was relatively high. There are a large amount of similar firms that are competing against K-Mart. Target and K-mart were competitors regarding general discount retailers. Also Dollar General and ShopKo competed with Wal-Mart as discount retailers; however, these two companies were not of much concern. Specialty discount store competition included Office Depot, Staples, Toys “R” Us, Best Buy, Costco, and Sam’s Warehouse Club. All the products were homogenous leading to just personal choice of the consumers. The threat of substitutes was low. Wal-Mart and their competitors do not have to worry about customers switching to substitutes because of high prices. These discount retailers are known for their low prices. The threat of suppliers is relatively neutral. There is a decent amount of suppliers, known of which had unique inputs. Switching suppliers would be disadvantageous because of the costs associated with such switch. The threat of buyers was low. There continues to be a high number of buyers and products remain standard across time.
Wal-Mart and its competitors are in the mature stage of their life cycle. There is increasing competition within the industry. The growth rates are relatively stable, and the number of customers remains relatively constant. Wal-Mart needs to come up with a way to improve their service in a way that differentiates itself from its competitors. This will give them the opportunity to succeed again.
After using the VRIO framework, I concluded that Wal-Mart does not have a sustained competitive...

Other Papers Like Wal-Mart Case Study

Case Study: Wal-Mart's Foreign Expansion

897 words - 4 pages Case Study: Wal-Mart's Foreign Expansion Brief Summary of the Case: The case explores the expansion of the world’s largest retailer, Wal-Mart, internationally. Wal-Mart began its international expansion in the early 1990s in an effort to continue its growth. The company began with a joint venture in Mexio. Initially, the company tried to implement strategies similar to those that had proved so successful in the United States, however Wal

Wal-Mart Stores Essay

1342 words - 6 pages EXECUTIVE SUMMARY As the largest supermarket, Wal*Mart is facing the new challenges: it is the target for all of its competitors. Its competitors will study its business model. The management of Wal*Mart needs to find suitable solutions to sustain a stable growth rate. At the end of 1993, Wal*Mart had a market value of $57.5 billion, and its sales per square foot were nearly $300, compared with the industry average of $210. The supercenter

Wal-Mart Organizing Paper

1201 words - 5 pages ., & Snell, S. (2009). Management: Leading and Collaborating in the Competitve World (8th ed.). Retrieved from The University of Phoenix eBook Collection database. Carlson, S. (2004). Wal-Mart Case Study. Retrieved from Wal-Mart. (2011). Retrieved from Wal-Mart. (2011). Retrieved from

Wal-Mart Analysis

674 words - 3 pages . Because of its inventory system’s unmatched efficiency and accuracy, Wal-Mart knows exactly what to buy and exactly how much to pay for it. To which concepts studied in the course are Wal-Mart’s actions with Rubbermaid most relevant? In the relationship with Rubbermaid, concepts that were touched on were cost leadership, lower price bargains, and loss of buying/purchasing power. In this case, Rubbermaid’s cost of business went up and they had

Wal-Mart Supply Chain

2085 words - 9 pages ). This enabled Wal-Mart to achieve significant cost advantages by purchasing goods in huge quantities through its own logistics infrastructure (warehouses). Electronic Data Interchange – Wal-Mart was one of the first companies to use computer systems to connect to those of its suppliers ( This was a huge innovative leap because many companies were leery to partner and share information

Wal-Mart 2005

1111 words - 5 pages Seiyu brand upon market entry and abandon their own at the time. In some cases Wal-Mart neglected to adapt to local markets and forced their culture on certain regions too quickly but overall Wal-Mart’s international growth was in double digits year after year. I think the Super Center strategy is actually quite genius. Especially in the case of Wal-Mart, consumer shopping is so convenient and becomes a place that the everyday consumer can depend

Wal-Mart Goes South

1183 words - 5 pages Wal-Mart Goes South Case Analysis Introduction “Save money. Live better” is the slogan of the 1962 founded American multinational retailer corporation that runs chains of large discount department stores and warehouse stores around the world. Wal-Mart today is the world’s 18th largest public corporation according to Forbes Global 2011 list. In 1991 Wal-Mart opened its first stores in Mexico and the competition between the store and local

Chalace Lowry- Wal-Mart

1168 words - 5 pages big problem at Wal-Mart. Wal-Mart has also been accused of ethical problems where women were not being treated equal in the workforce. The nations largest-ever sex discrimination case where women had been denied training and promotion opportunities that are offered to men was against Wal-Mart. In addition women are underpaid. That is, men are paid more than women. According to Hoover’s handbook of American business, “in June 2001 a group of

Wal-Mart in China

4845 words - 20 pages China. Company Situation Analysis The initial strategy for Wal-Mart in China did not work so well. In 2004, eight years after entering China, they were listed as just the number 20 chain store in China and expansion was slow with 43 stores. “According to figures from China General Chamber of Commerce (CGCC), Wal-Mart had been losing money since it arrived in the country in August 1996” (2006, The Asia Case Research Center). Sales growth

Wal-Mart Employee Retention

1547 words - 7 pages | Wal-Mart Employee Retention | What can be change? | 5/3/2013 Contents Abstract 2 Introduction 2 Factors that make employees leave and organization 3 Factors that can retain employees within an organization 4 Wal-Mart 4 Strategies to help with Retention 6 Conclusion 7 References 8 Abstract Employees are valuable assets and retaining employees can be challenging and is a critical issue. Employee

Wal-Mart, an Organizational Analysis

1544 words - 7 pages : Gaining leverage in the 21st century. Bianco, A., Zellner, W. (2003) Is Wal-Mart too powerful? Business Week. Denisi, G (2012). HR. (1st. Edition) Cengage Learning, (P. 26-34) Goudreau, J. (2010). Forbes magazine, Work in progress. Wal-Mart Faces the Largest Sex Discrimination Lawsuit in U.S. History. MBA Knowledge Base, (1997). Case study: Wal-Mart’s failure in Germany. MSN Photos (2012). Largest Retail Chains in the World.

Related Essays

Wal Mart Case Issues And Perspectives

1012 words - 5 pages ISSUES Supply Chain / Logistics India’s transportation system is not as advanced as other countries systems’. In India many roads are not paved yet which will slow down the famous Wal-Mart supply chain. Wal-Mart’s core competency is price. One cannot find lower prices than they find in Wal-Mart on such a large assortment of products. One of the reasons that price can be Wal-Marts’ core competency relies on the efficiency

Financial Statement Analysis Case Wal Mart

751 words - 4 pages Financial Statement Analysis Case Wal-Mart Instructions (a)   | Discuss the expected effect on income (1) in the year that Wal‐Mart makes the changes in its revenue recognition policy, and (2) in the years following the change. | The SAB deals with various revenue recognition issues, several of which are common within the retail industry. As a result of the issuance of SAB 101, the company changed its method of accounting for SAM’S CLUBS

Wal Mart Mini Case Essay

1160 words - 5 pages Wal-Mart is a brand that is well known around the world, especially in the USA. Wal- Mart began in the USA in the state of Arkansas. It was founded by Sam Walton in 1962. Wal- Mart quickly became the largest retailer in the world. Defeating its competitors, Wal-Mart now has control and power of the U.S. retail industry and making huge gains as the top retailer in the world. Globalization was Wal-mart next step because of its retail

Wal Mart Case Essay

931 words - 4 pages Half a Century of Supply Chain Management at Wal-Mart Wal-Mart Stores Inc., supply chain is still a competitive advantage, but the role through which it derived has changed its competitive advantage. From the start of Wal-Mart in 1962, until the 21st century, Wal-Mart supply chain brought its strength only from cost leadership point of view. However, now it has shifted its focus from cost leadership towards focus strategy for smaller targets