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Introduction Examine the list of the largest retail corporations in America and you will find Wal*Mart Inc. at number one. From the opening of its first store in 1962 to the thousands of stores in operation today, Wal*Mart has revolutionized the world of retailing with their merchandising techniques, information and distribution systems and strong organizational culture. A general merchandise discount store, Wal*Mart works hard to achieve and maintain the lowest costs and provide value to consumers by leading the industry in price and convenience. David Glass, CEO, has seen Wal*Mart through a period of constant growth and, as a result, their enormous size and success has left the company at the head of the pack. Now, with no one else’s trail to follow, Wal*Mart must forge their own path to a successful future. Symptoms The following case facts give indication that Wal*Mart is facing strategic issues. · The growth rate of the discount retailing industry is leveling off as there are fewer new store openings and emphasis has been on refurbishing existing stores. · The industry has become concentrated with the top five firms obtaining 71% of sales. · Wal*Mart stock prices have dropped due to speculation about the firm’s future and ability to grow. · Controversy regarding Wal*Mart’s low prices has surfaced damaging the firm’s image. · Wal*Mart has experienced substantial growth and obtained nearly 70% more sales in 1993 than the next closest competitor. Key Issue Wal*Mart has achieved phenomenal success by mastering their low-cost strategy. The main issue facing Mr. Glass now is whether or not maintaining Wal*Mart’s current strategy will allow the firm to sustain their position in the industry and provide the company with sufficient growth opportunities. The symptoms reveal the discount retailing industry may be maturing. As a result, Wal*Mart must clearly define their strategic direction if they wish to maintain their position as industry leader into the next century. Analysis Strengths: A firm doesn’t make it to number one by mistake and over the years Wal*Mart has developed a number of systems and processes that have become the keys to their success. A major difference between Wal*Mart and the competition is the way the firm treats its employees, a.k.a.
Approximate Word count = 1451
Approximate Pages = 5.8
(250 words per page double spaced)
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