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 Torn
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 strop culture. Analysts like Jim Collins believe
that W al-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.)1n 1999,
Wal-Mart became the largest private employer in the US with
1,140,000 Associates. But with amazing success also came
criticism.&al-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