Tag Archives: WMT

Wal-Mart Discount Stores’ Operations 1985 Case Study Analysis

 Capital isn’t scarce; vision is.

Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community.
High expectations are the key to everything.
I had to pick myself up and get on with it, do it all over again, only even better this time.
I have always been driven to buck the system, to innovate, to take things beyond where they’ve been.
Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
We let folks know we’re interested in them and that they’re vital to us. cause they are.
We’re all working together; that’s the secret.
               — All quotes are from Sam Walton

Wal-Mart Case Study 1986

Analysis of Wal-Mart http://www.scribd.com/doc/78543427/WMT-Case-Study-1-Analysis

See: http://www.scribd.com/doc/78527294/Wmt-50-Year-Chart

Who wants to move deeper into analyzing WMT and see the HBS Case on WMT for 2003? …………or

Ready to move onto to the Coors Beer Case Study which is a lesson on what happens if a company loses its regional economies of scale advantage?

Lessons learned so far?

If you had read this case study when it was published in 1986 would you have bought WMT and held on for five or seven years?  What analysis would you need to do?

Tomorrow I will post another strategic view of Wal-Mart so you can see other perspectives.

Master Student Study Techniques for Competition Demystified


Practice becoming an expert student so you can truly master the material.

The questions below are ones that YOU should ask and then answer without looking at the text again. If you read a page or a segment of the book, stop, then write down or record verbally your answers or explanation of what you just read. Then after you complete the chapter review again what you have learned–give a mini lecture on the chapter in your OWN WORDS. You need to answer in your own words not look up and repeat the text.

These questions for chapters 1-3 are the type you should ask as you read. The questions cover the first 51 pages, but you need to study up to Chapter 5 to complete the WMT Case Study.

Wal-Mart Case Study (in Value Vault, email aldridge56@aol.com)

You need to show in WMT’s financial statements, where is the source of  competitive advantage.  How do you know WMT has a competitive advantage and exactly what is WMT’s competitive advantage? Please show your analysis.

Questions about Competition Demystified
By Bruce Greenwald and Judd Kahn

These questions are intended to help you test your understanding of the book.

Chapter 1: Strategy, Markets and Competition
1. What are the differences between strategy and tactics?
2. What is the most valuable resource in any business?
3. What is the most important feature of the competitive landscape in which a business operates? (hint: one of Porter’s five forces)
4. What are the three sources of competitive advantages?
5. If your success is based on your ability to dominate a local market, how can you grow and still maintain high levels of profitability?

Chapter 2: Competitive Advantages I: Supply and Demand
6. Is product differentiation a means to high profitability?
7. Can product differentiation create strategic opportunity? Why or why not?
8. Is efficiency easier for differentiated products than commodity products?
9. What is the strongest barrier to entry? Why?
10. What is customer captivity and what are the three sources of customer captivity?

Chapter 3: Competitive Advantages II: Economies of Scale and Strategy
11. When we talk about the “size” of economies of scale, what are some of the ways of thinking about this? Explain the interaction of economies of scale and customer captivity: in manufacturing, in advertising & marketing, in distribution.
12. What economic conditions create the potential for economies of scale advantages?
13. If a crucial ingredient for competitive advantage is customer captivity, what are five tactics for intensifying customer captivity?
14. Why is Coca Cola one of the most valuable brands in the world? Why is Mercedes-Benz not?


To learn more about study habits: http://www.garynorth.com/public/department95.cfm

Why does this technique work? Because of this inescapable fact: If you can’t put something in your own words, then you don’t really understand it. Simple, isn’t it? I think most people don’t want to face the fact that they don’t understand things. They don’t want to be reminded. — Gary North.

CASE STUDY on Wal-Mart Stores’ Discount Operations; Richard Feynman Video on An Original Thinker

Feynman Video on No Ordinary Genius

Richard Feynman was one of my heroes. Start your 2012 on an inspiring note by watching the video (link) below.

Throughout history, the Ayn Rand pointed out, the greatest heroes of mankind have been original thinkers who rejected the core beliefs of their societies, formed new ideas, and struggled for years against social norms to have the new theories accepted. Socrates, Copernicus, Galileo, Darwin, and Pasteur are all examples of this phenomenon.

An individual—a thinking individual—is not a helpless pawn of his society, its educational system, and its core beliefs. He is able to look at the realities of the world, at nature, at facts, and think independently. This is how many individuals come to reject the beliefs of their families, their clergy, their teachers, their professors, their governments, and their societies in general. This is how independent freethinkers have arisen, battled against the entrenched conservative beliefs of their societies, and ultimately established the truth of their new theories. –Andrew Bernstein

Richard Feynman is no ordinary genius. He was one of the world’s greatest physicists who loved Go-Go Girls (yeah!) and bongo drums–an inspiring 90 minute video on a creative, free-thinker. Lessons for the investor?


Wal-Mart (“WMT”) Case Study

Wal-Mart Case Study on its Stores’ Discount Operations (9-387-018).  Please read the first 112 pages of Competition Demystified in the Value Vault[1]. You will find the above case there. Please describe why you think Wal-Mart has been so successful? Please support your assumptions with data and figures from the case.  Will WMT continue to be successful? How would you determine if WMT will maintain its success.  What about competition? Hint: Sam Walton was a superb entrepreneur and CEO but leave him out of your analysis.  For those who wish to learn more about Wal-Mart and Sam Walton then go here: http://www.amazon.com/Sam-Walton-Made-America/dp/0553562835/ref=sr_1_1?ie=UTF8&qid=1325609378&sr=8-1

You have until Monday of next week to complete this case.  To get yourself in the mood to complete a case study: http://www.youtube.com/watch?v=Y4j25Pj4JyQ and part 2: http://www.youtube.com/watch?v=JJ7aVrtTbg0

Yes, it is lonely and hard work, but you can save $80,000 per year (yes, you don’t receive the MBA credential).

This case will take you a few hours but the effort will be rewarded because you must know the sources of competitive advantage for one of the greatest companies of all-time.

We will begin to review your 112 pages of reading this week plus include other case studies to reinforce concepts.

A blog on investing and competitive analysis from a student of mine and fine investor: http://thefallibleinvestor.com/

Quiz on Economic Thinking

We may have to read Capitalism by Reisman (in VALUE VAULT plus the Study Guide on Capitalism) to deepen our understanding of costs, prices, economies of scale and diminishing marginal utility.

Can someone reply to these questions?

  1. What is inflation?
  2. Do rising wages cause inflation?
  3. Should businesses pay an excess profits tax on the raising of prices of their products if excessive?

Take no more than three minutes.

May 2012 exceed your expectations.

[1] To enter the VALUE VAULT please email me at aldridge56@aol.com with VALUE VAULT in the subject heading.