Walmart case study

When most firms were struggling in 2008, Wal-
Mart increased its revenues from $348 billion in
2007 to $378 billion in 2008. Wal-Mart’s net income
increased too, from $11.2 billion to $12.7 billion—quite
impressive. Fortune magazine in 2009 rated Wal-Mart
as their 11th “Most Admired Company in the World” in
terms of their management and performance.
Wal-Mart Stores continues to expand internationally,
particularly in emerging countries such as Brazil and
India. From 2009 to 2013, Wal-Mart plans to devote 53
percent of its international spending to emerging markets,
up from 33 percent in the prior five years. The
company plans include remodeling U.S. stores rather
than adding new stores and going to smaller stores.
Wal-Mart’s capital expenditures in the year ending
January 2010 were $5.3 billion, up from $4.8 billion the
prior year.
As electronics retailer Circuit City was declaring
bankruptcy and liquidating in 2008, Wal-Mart was
beefing up its electronics product line, directly attacking
Best Buy. The two firms today are in a dogfight to
obtain the millions of electronics products customers.
Best Buy was Fortune’s 44th “Most Admired Company
in the World” in 2009.
Wal-Mart recently revamped the electronics departments
in its 3,500 U.S. stores to make them much
more interactive and roomier. The company wants
all the business that Circuit City’s failure left and
also wants all of Best Buy’s and Amazon’s business.
Wal-Mart now carries sophisticated electronics products
such as Research in Motion Ltd.’s Blackberry
smart phones, Palm Inc.’s Pre smart phone, and
Blu-ray disc players. Wal-Mart in June 2009 began
selling Dell Inc.’s new Studio One 19 touch-screen
computers.
Wal-Mart Stores is bigger than Europe’s Carrefour,
Tesco, and Metro AG combined. It is the world’s number
one retailer, with more than 7,870 stores, including
about 890 discount stores, 2,970 combination discount
and grocery stores (Wal-Mart Supercenters in the United
States and ASDA in the United Kingdom), and 600 warehouse
stores (Sam’s Club). About 55 percent of its Wal-
Mart stores are in the United States, but the company
continues expanding internationally; it is the numberone
retailer in Canada and Mexico and it has operations
in Asia (where it owns a 95 percent stake in Japanese
retailer SEIYU), Europe, and South America. Founder
Sam Walton’s heirs own about 40 percent of Wal-Mart.
Wal-Mart is a corporate leader in sustainability. The
company in 2009 alone installed rooftop solar arrays on
20 stores and warehouses in California and Hawaii.
A Wal-Mart partner, BP Solar, installs, maintains, and
owns these systems.
Perhaps more importantly, Wal-Mart in July 2009
unveiled a new environmental labeling program that
requires all its vendors to calculate and disclose the full
environmental costs of making their products. All vendors
must soon distill that information into Wal-Mart’s
new labeling system, thus providing product environmental
impact information to all Wal-Mart shoppers.
This new Wal-Mart program may redefine the whole
consumer products labeling process globally by the year
2012.
Source: Based on Geoff Colvin, “The World’s Most Admired
Companies,” Fortune (March 16, 2009): 76–86; and Miguel Bustillo,
“Wal-Mart Puts Green Movement Into Stores,” Wall Street Journal
(July 16, 2009): Al.