Wal-Mart Stores in 2003

For the fiscal year ending January 31, 2003, Wal-Mart Stores, a retailer, posted net income of $8 billion on sales of $245 billion, up 21% and 12% respectively from the previous year. Wal-Mart had become the world's largest company and, with 1.4 million employees, the world's largest private employer. Twenty million shoppers visited its stores each day and 82% of U.S. households had made at least one purchase at Wal-Mart during the previous year.1 In March 2003, Fortune ranked it-for the first time-as America's most admired as well as largest company. And people began to discuss whether Wal-Mart could rack up $1 trillion in sales within 10 years.

Amidst all this fanfare, Wal-Mart's CEO, H. Lee Scott, Jr., had recently rated his company at about 6 on a 10-point scale.2 Asked whether the late Sam Walton, Wal-Mart's legendary founder, would like the company if he could see it in 2003, Scott had a measured response:

In many ways he would be pleased. In other ways, I think he would not. . . . I think Sam would be disappointed to think that here we are much later, and we haven't figured out a way to judge whether our store managers are treating people appropriately. I think he would be disappointed because he would probably think our expenses are too high and our competitors are still better than we are in certain categories, and why aren't we moving faster there. But Sam had a way of criticizing himself and the company that motivated you to get better.

Scott foresaw another 10 to 20 years of growth in the company's core businesses of discounting general merchandise and food in the U.S. "What we're finding is that you can put a lot more stores into a market than you ever dreamed you could."4 But Wal-Mart was also looking at new areas for growth. Geographic scope had been expanded by international operations, initiated in the early 1990s, that already accounted for 17% of sales, 15% of earnings before interest and taxes (EBIT), and 32% of total assets. And horizontal scope would be expanded by the plans, announced in January 2003, to introduce basic financial services for U.S. customers.

Attachment:- Case Study Wal-Mart.rar