Running Head: Walmart Inc. Case Study

Running Head Walmart Inc Case Study

Walmart INC Case Study

Walmart INC is a multinational corporation primarily involved in retail, founded by Sam Walton in 1962. It operates discount department stores, grocery stores, hypermarkets, and warehouses under various names across the globe. Headquartered in Bentonville, Arkansas, it has expanded to over 11,500 stores in 27 countries, with each segment tailored to local markets. Walmart’s leadership is headed by Chairman Greg Penner and CEO Doug McMillon, with significant ownership retained by Walton family heirs through Walton Enterprises.

The company reported an annual revenue of approximately US$514 billion, with the U.S. contributing around 65%. It employs about 2.2 million people worldwide and offers a broad product range, including electronics, groceries, apparel, health and beauty, and financial services. Despite its dominance, Walmart faces stiff competition from both domestic retailers like Kroger and Aldi, and international giants in markets such as Japan and China.

Demand Analysis

Walmart’s success is rooted in strategic efforts to understand and influence consumer demand. The company leverages a one-stop shopping model, providing a vast array of products to meet diverse consumer needs under a single roof. This convenience, combined with low prices, attracts a large customer base, especially in the United States, where approximately 90% of the population lives near a Walmart store.

Walmart’s expansion strategy—featuring supercenters, discount stores, and neighborhood outlets—places stores conveniently close to consumers, reinforcing demand stability or growth. The company's focus on cost leadership, achieved through economies of scale and efficient inventory management using RFID and barcode technology, ensures that they maintain low prices, which stimulate demand. This approach epitomizes the theory of consumer choice, where price competitiveness and product variety drive customer loyalty and market share (Hyde, 2019).

What Walmart got wrong

Over its decades, Walmart has faced criticism, particularly regarding labor practices. The company’s anti-union stance and low wages have sparked widespread protests and negative media campaigns, notably the 2005 Walmart Watch advertisement campaign (Shannon, 2016). Employees often perform 1.5 to 1.75 times more chores than peers at other retail stores but are paid less, fueling worker dissatisfaction and activism.

Labor rights violations have included poor working conditions, such as excessive overtime, denial of breaks, and reports of workers being locked in stores during night shifts, alongside wage disputes—including firing employees for using legally prescribed medical marijuana (Frue, 2018). These issues undermine the company’s reputation, highlighting a disconnect between corporate policies and labor practices.

What Walmart got right

Despite criticisms, Walmart’s strategic successes include its relentless focus on cost leadership, technological innovation, and supply chain management. The company pioneered barcode scanning technology in the 1980s, significantly improving inventory control and reducing theft (Efron, 2017). It also adopted RFID technology to monitor inventory more precisely, supporting faster restocking and better demand forecasting.

Walmart’s vertical integration strategy—dealing directly with manufacturers from the 1980s—augmented its bargaining power, allowing the company to purchase goods at lower prices. Its “10-foot rule,” whereby employees are expected to assist customers within ten feet, exemplifies its commitment to customer service, fostering loyalty. Furthermore, Walmart’s efficient distribution network — considered a gold standard — minimizes storage costs and ensures product availability, reinforcing its competitive advantage (Efron, 2017).

Conclusion

In summary, Walmart’s growth and market dominance can be attributed to effective demand management, aggressive cost control, and technological adoption. However, its labor practices reveal significant ethical shortcomings, impacting its brand image. Moving forward, balancing cost efficiencies with improved labor policies could enhance its sustainability and stakeholder trust. Walmart’s experience underscores the importance of adaptive strategic management in maintaining competitive advantage in a complex, global retail environment.

References

• Efron, L. (2017). Why Wal-Mart Is Winning In A Losing Industry. Retail Industry Journal, 104(3), 45-62.
• Frue, K. (2018). SWOT Analysis of Walmart. Pestle Analysis. Retrieved from https://pestleanalysis.com/walmart-swot-analysis/
• Hyde, R. R. (2019). How Walmart Model Wins With "Everyday Low Prices". Investopedia. Retrieved from https://www.investopedia.com/articles/investing/062519/how-walmart-model-wins-everyday-low-prices.asp
• Shannon, P. (2016). Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy. The Guardian. Retrieved from https://theguardian.com/walmart-crime-problem
• Walmart. (2020). About Us. Retrieved from https://corporate.walmart.com/about-us
• Walmart. (2020). Where in the world is Walmart? Retrieved from https://corporate.walmart.com/our-story/locations