Case Study Contents
- Introduction
- Wal-Mart – Company Background
- Sam Walton and Wal-Mart’s culture
- Exhibit: Unique values that support Wal-Mart’s three basic beliefs
- The 10-Foot Rule – Wal-Mart’s secret to customer service
- The Sundown Rule
- Open-Door Policy
- Servant Leadership
- Rank-and-file profit sharing
- Grass Roots Process – Associate Opinion Survey
- The Wal-Mart Cheer
- Wal-Mart’s efforts to make the company an even better place to work
- Employee Development programs
- Combining Technology and empowerment
- Awards and Recognitions received by Wal-Mart
- Wal-Mart – Timeline
- Wal-Mart – Quick Facts
- Wal-Mart – Various Store Formats
- Wal-Mart – International operating formats
- Sam Walton’s ten rules for building a business
Introduction
“Wal-Mart continues to execute well and deliver solid results in a challenging economic environment“- A Goldman Sachs analyst
“What makes ordinary people do extraordinary things?” Sam Walton once asked. “Aren’t we a group of ordinary folks? We really are. And I think we, together as a team, have done extraordinary things. We’ve all grown, we’ve all accomplished much more than any of us ever thought that we could.“- Sam Walton, founder of Wal-Mart
“We are a people association supported by one million associates. Much of what we do centers around individual stores. We’re in a labor-intensive customer service business. Associates can’t treat customers as number one if they are not treated that way.” – Susan Oliver, Wal-Mart’s SVP of human resources in 2005
In August 2008, Wal-Mart Stores announced that its profit rose 17 percent in the second quarter and that it is raising its full-year forecast. In a challenging economy, the world’s largest retailer benefited from low prices and its moves to cut costs. Wal-Mart’s President and Chief Executive Lee Scott said that, “While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that Wal-Mart is well positioned for this economy.” Chief Financial Officer Tom Schoewe attributed the better second-quarter profits to tighter inventory controls, which led to fewer markdowns on merchandise. One of Wal-Mart’s goals – which it successfully met – was keeping inventory growth at half the rate of its sales growth which it successfully met. In contrast, sales at department stores and specialty retailers were lagging behind.
What is the key to such good results? Wal-Mart overhauled its strategy. Instead of announcing any price increases to cope with the tough economy, the company slashed its expansion plans. It refocused on lower prices, improved the mix of merchandise offered, cleaned up its stores and provided friendlier and faster customer service. But there is more to Wal-Mart’s success over the years than just tighter inventory controls and lower prices.
Wal-Mart is truly a great company. A strong organizational culture is the foundation for making a good company a great one. The secret to Wal-Mart’s success has long been attributed to its strong culture. Analysts like Jim Collins believe that Wal-Mart had the kind of ‘cult-like’ culture that is shared by all great companies. Wal-Mart employees are referred to as ‘Walmartians’ which is a sign of a unique culture shared by them. This culture is responsible for a company of this magnitude to be able to sustain its entrepreneurial spirit decade after decade.
Since its early days, Wal-Mart achieved remarkable growth rates and was the first trillion dollar company in the world. In 1999, Wal-Mart became the largest private employer in the US with 1,140,000 Associates. But with amazing success also came criticism. Wal-Mart was sued many times and even held the record for being sued the maximum at one time. Its practices and culture were held responsible for killing small local retailers. It was also criticized for gender-based discrimination, its overtime policies and using sweatshop products.
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