Wal- mart's future

Essay by sinmayyinUniversity, Bachelor'sA-, April 2009

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Wal mart's future-Analysis of strategic actions for Wal mart to sustainBeing the world's largest private retail company, Wal mart has been using a combination of low prices and relentless expansion to emerge from rural Arkanas to reshape the retail business in America (The Wall Street Journal, 2007). It is successful until 2006 when it reported its first decline in quarterly income in 10 years (People Daily, 2006) and domestic same-store sales crept up by just 1.9 percentage in 2006, both are the worst showing in Wal-Mart's history. Wal mart sales growth rate has also decreased since 2006 and it has lost its battle with its major competitors, Target and Costco (Douglas J., 2006) (see figure 1 and 2). To increase sales, it imitates its competitors by selling priority products including home décor, electronics and fashion items. All are not having satisfactory results. The purpose of this paper is to examine the underlying reasons for the slow down trend in sales growth for Wal mart, evaluation of existing strategies, and recommendation to fine tune its strategies to support its growth.

Underlying reasons for the slow down trend in sales growth for Wal mart and evaluation of existing strategiesBefore illustrating why it encounters the above problems, the importance of maintaining not only a particular sales volume, but having a sales growth should be discussed first. Firstly, Douglas J. observed that major players in the U.S. retail industry such as Chico's, Kohl's, J.C. Penney and Best Buy are all opening new stores. These are the survivors or innovators of the last major retailing cycle (i.e. the value era) and they are still operating healthily after Wal mart has gained its renowned large operation scale. Secondly, these value retailers are differentiating themselves more than just discounters as Wal mart...