Wal-Mart Stores, Inc.: On Becoming the World’s Largest Company (2002)

Wal-Mart Stores, Inc.: On Becoming the World’s Largest Company (2002)

I. CASE ABSTRACT

Wal-Mart Stores, Inc. is an American-based discount retailing concern headquartered in Bentonville, Arkansas. In 2002, Wal-Mart Stores, Inc., of Bentonville, Arkansas, operated mass merchandising retail stored under a variety of names and retail formats, including Wal-Mart discount department stores; Sam’s Wholesale Clubs, wholesale/retail membership warehouses; Neighborhood Markets, small grocery/drug store formats; and Wal-Mart Supercenters, large combination grocery and general merchandise stores in all 50 states. It was not only the nation’s largest discount department store chain but also had surpassed the retail division of Sears, Roebuck and Co. in sales volume as the largest retail firm in the United States. Much of the success of Wal-Mart was attributed to the entrepreneurial spirit of its founder, Sam Walton. Sam Walton built the company from the ground up. Many considered him one of the most influential retailers of the century.

In the International Division, it operated its own stores in Canada, Mexico, Argentina, Brazil, Germany, South Korea, United Kingdom, and Puerto Rico, plus stores in China operated through joint ventures. It was also considered the largest retailer in the world, as measured by annual revenue, with sales for the year ending January 31, 2002 of approximately $217.8 billion.

Kmart Wal-Mart______ Sales Net Income Sales Net Income

FY 1990 $32,070,000, $756,000 $32,601,594 $1,291,000

FY 2000 $37,028,000 ($244,000) $191,329,000 $6,295,000

FY 2001 $36,151,000 ($2,418,000) $217,799,000 $6,671,000

Wal-Mart experienced sales growth of 20% in the fiscal year 2000. This impressive increase is a direct result of the company’s expansion program.

Kmart shows an increase of $4,081,000,000 or 12.72% while Wal-Mart’s sales increased to $217,799,000,000 (an increase of $185,197,000,000 or 568.1%), in fiscal year 2001.

Decision Date: 2002 2002 Sales: $219,812,000,000

2002 Gross Profit: $10,751,000,000

(2002 Fiscal Year was February 2001 to January 31, 2002)

II. CASE ISSUES AND SUBJECTS

Mass Merchandising Industry

Corporate Governance

The Marketing Concept

• Genesis of an Idea

• Foundations of Growth

• Becoming National

The External Environment

Domestic Corporate Strategies

International Corporate Strategies

Decision-Making in a Market-Orientated Firm

The Growth Challenge

III. STEPS COVERED IN STRATEGIC DECISION-MAKING PROCESS

Strategy Formulation Strategy Implementation Evaluation & Control

1A 1B 2 3 4 5A 5B 6 7 8

Ш Ш X Ш X X X X Ш X

Ш = Emphasized in Case X = Covered in Case

IV. CASE OBJECTIVES

1. To discuss Company Philosophy

2. To discuss Products and Services

3. To discuss Marketing Strategies and Distribution Methods

4. To discuss Facilities and Operations

5. To discuss the company’s competitors

6. To discuss the company’s market segments

7. To discuss Patents, Trademarks, and Licenses

8. To discuss the Finance issues

VI. DISCUSSION QUESTIONS

1. What are the strengths and weaknesses of Wal-Mart Stores, Inc.?