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The Inexorable Rise of Walmart? 1988-2016
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Reference: HBS-716426-E
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Year: 1962
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Number of pages: 36
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Geographic Setting: Arkansas;United States
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Publication Date: May 11, 2016
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Fecha de edición: May 5, 2009
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Source: HBSP (USA)
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Type of Document: Case
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Industry Setting: Banking;Retail trade;Supermarkets;Film;Convenience stores;Grocery stores;Online retail;Web services;Food & Beverage;E-commerce;Food;Information services;Banking & credit
Description
In October 2015, Walmart surprised investors by announcing that it expected flat sales growth for 2015 and growth of only 3% to 4% over the coming three years. Profits would also fall due to significant investments in people and technology. The company's stock price dropped 10% on the news, the largest one-day decline since 1998. In February 2016, Walmart reported that revenues for 2015 had dropped 0.7% to $482.1 billion, the first decline in Walmart's history. The company also downgraded its sales forecast for the coming year, suggesting sales would now be flat. Meanwhile, online retailer Amazon was growing rapidly and, despite being less than one-quarter of the size of Walmart, now boasted a higher market capitalization. Moreover, in April 2016, Alibaba of China announced that it had passed Walmart in global sales to become the biggest retail platform in the world. To add to Walmart's woes, in the United States traditional dollar discount stores and convenience outlets were gaining ground, and wage rises were putting pressure on profits. Meanwhile, international markets continued to underperform. Indeed, some analysts had suggested that Walmart retreat to its U.S. home base to improve performance. Many feared that this was the end of the 50+ year inexorable rise of Walmart. However, CEO Doug McMillon remained determined to get the company back on track and vowed to eschew short-term profits and invest in the future. Investors were not impressed. They had waited a long time for improvements; in 2015, Walmart generated three times the sales and profits it had achieved in 1999, and yet the stock price had barely changed. Patience was running out.
Keywords
Analytics
Banks
Business communication
Business growth
Business history
Business Models
Business strategies
Business units
Compensation
Competition
Competitive advantage
Competitive Strategy
Corporate strategy
Cross-cultural management
Distribution
Diversification
Employee benefits
Employee compensation
Employees
Expansion
Globalization
Globalization strategies
Goals
Growth strategy
Hiring & employment
Human capital
Information technology
Labor relations
Labor unions
Management by objectives
Merchandising
Prices
Pricing strategy
Product positioning
Retail
Revenues
Strategy
Succession issues
Supply chain management
Technology
Television
Wages & salaries