WALMART 2005 CASE STUDY

4087 Words Oct 31st, 2014 17 Pages
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REV: APRIL 14, 2005

DAVID B. YOFFIE

Wal-Mart, 2005
As Wal-Mart entered 2005, it stood as the largest company in the world. The company boasted nearly $260 billion in sales, managed over 5,000 stores in 10 countries, and employed over 1.5 million people worldwide. Entering its 42nd year of operations, Wal-Mart continued to draw price-conscious shoppers with everyday low prices and convenient store hours; over 100 million customers visited
Wal-Mart stores each week.1 Nonetheless, competition remained vigorous, with direct competitors
Target and Costco fighting for market share in discount merchandise; Home Depot dominating in home-renovation materials; and a newer breed of specialty discounters, including Best Buy and
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Wal-Mart hoped that the superior tracking capability of RFID chips would reduce shrinkage and other forms of loss by up to 6%. The introduction of RFID would be a costly and time-consuming process, but Wal-Mart hoped to be one of the first retailers to benefit from its deployment.5
On the consumer front, Wal-Mart had launched e-commerce operations in the mid-1990s.6 While its initial online strategy to create a separate Walmart.com venture had faltered, Wal-Mart continued to push online sales aggressively. By 2005, sales over the Web accounted for approximately 6% of total Wal-Mart sales in the U.S.7

Human Capital
The original Wal-Mart vision embraced employees as associates, and it encouraged employees to analyze sales data to find ways to improve store performance. Over time, however, Wal-Mart had become known for low pay and heavy reliance on part-time and temporary help, which reduced expenses associated with benefits packages, particularly health-care coverage. In recent years,
Wal-Mart had been criticized for its record in employee relations. Wal-Mart had no unions, despite being the largest trucker, the third-largest pharmacy, and one of the largest grocers in the United
States.
Internationally, Wal-Mart faced harsher

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