This The Inexorable Rise of Walmart? 1988-2016 case study looks into how Walmart can get back on track to keep the trust of its investors. The main problem facing Walmart in this case study is the decline in sales, which affected its competitive advantage. The case notes that in 2015, the company's revenues declined by 0.7% to $482.1 billion. However, its rivals, such as Amazon and Alibaba, were generating more revenue, and American outlets and discount stores were also growing. Another problem is poor performance in international operations due to the inability to respond to the local markets. Walmart also found it challenging to handle cultural differences in global markets. It affected its ability to serve its customers and profitability. Also, the company is accused of the alleged human rights violations that occurred in Bangladesh and Mexico.
​John R. Wells and Gabriel Ellsworth
Harvard Business Review (716426-PDF-ENG)
May 11, 2016
Case questions answered:
- Provide a concise case background.
- How has Walmart performed internationally? What key challenges did the company face internationally?
- Identify other key strategic problems that the company faced. What are your recommendations for dealing with these challenges?
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The Inexorable Rise of Walmart? 1988-2016 Case Answers
Background – The Inexorable Rise of Walmart? 1988-2016
Walmart, the world’s largest discount retail store, was expected to experience flat sales in 2015 and slow growth of only 3% to 4% over the next three years. This came as a surprise to investors who had waited for some time to see the company’s progress.
The stock price had just changed, and in 2015, Walmart produced three times the sales and gains it had reached in 1999. Gains were also anticipated to drop due to substantial investments in technology and people. The stock price fell 10%, the most significant drop since 1998.
On the other hand, Walmart’s competitors were proliferating. Amazon, an online retailer, was growing at a faster rate, possessing a higher market capitalization despite being less than one-quarter of the size of the company.
In April 2016, China’s Alibaba revealed that it had passed Walmart in worldwide sales to become the largest retail store in the world.
In America, convenience outlets and traditional dollar discount stores were advancing, and wage increases were putting pressure on profits. International markets were underperforming, and some analysts were proposing that Walmart should retreat to its U.S. home base to improve performance.
Key problem (s)
The main problem facing Walmart is the decline in sales, which affects its competitive advantage. The case notes that in 2015, the company’s revenues declined by 0.7% to $482.1 billion.
However, its rivals, such as Amazon and Alibaba, were generating more revenue, and American outlets and discount stores were also growing.
Another problem is poor performance in international operations due to the inability to respond to the local markets. Walmart also found it challenging to handle cultural differences in global markets.
It affected its ability to serve its customers and profitability. Also, the company is accused of the alleged human rights violations that occurred in Bangladesh and Mexico.
Analysis
Domestic competition:
Intense competition coming from Costco and Amazon was…
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