Wal-Mart Stores Inc. - Success Strategies in Recessionary Environment

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Case Details:

Case Code : BSTR335
Case Length : 20 Pages
Period : 2005-09
Pub Date : 2009
Teaching Note :Not Available
Organization : Wal-Mart Stores Inc.
Industry : Retail
Countries : US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The business model that Sam Walton (company's founder) created is perfectly positioned for the environment we live in now. I do believe this is Wal-Mart's time." ¹

- Michael Duke, President and CEO, Wal-Mart Stores Inc, in February 2009.

"Business in general and a turnaround in particular all benefit from market timing. Nowhere is that more true than in Wal-Mart's case. The US economy turned down just as the company was picking up the pieces of its failed up-market strategy which included new fashion apparel, ethnic market segmentation, and centralization of store operations; most of which were either poorly executed or just plain wrong. The only thing that saved the company's bottom line from deteriorating further was the onset of the credit crisis in July 2007 and subsequent rise in oil prices as the dollar tumbled. Higher energy costs forced all retailers to increase product prices as a direct consequence of rising product costs and increased operating expenses. Simultaneously, consumers suffering acute sticker shock sought out the lowest common denominator to shop in order to balance family budgets. Wal-Mart was the obvious choice."²

- Nicholas White, President, White & Company³, a Custom Jewelry Retailer, in August 2008.

Introduction

Despite the recession, the US-based Wal-Mart Stores Inc. (Wal-Mart), the world's largest discount store retailer, reported revenues of US$ 107.99 billion in the fourth quarter ending January 2009, a 1.7 percent increase as compared to the fourth quarter that ended January 2008.

For the fiscal year 2008-09 that ended on January 31, 2009, the company reported revenues of US$ 401.2 billion, a 7.2 percent increase as compared to the fiscal year 2007-08. The net income for the year 2008-09 was reported at US$ 13.4 billion, as against US$ 12.73 billion in the previous year.

Wal-Mart Stores Inc. - Success Strategies in Recessionary Environment - Next Page>>

1] "Wal-Mart Tops $400 Billion in Sales; 'This is Wal-Mart's Time,' Says Mike Duke," www.indiaretailbiz.com, February 20, 2009.
2] Nicholas White, "Timing not Strategy Revitalized Wal-Mart," www.glgroup.com, August 13, 2008.
3] White & Company is a custom jewelry maker based in the US.

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