Wal-Mart case study

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Published on May 26, 2009

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A Corporate GiantOrA Corporate Beast : A Corporate GiantOrA Corporate Beast Introduction : Introduction This case discusses: Introduction to Wal-Mart History of Wal-Mart The Road to Success - Corporate Strategy The Criticism and the Challenges Wal-Mart’s PR strategy The Road ahead Wal-Mart – An Introduction : Wal-Mart – An Introduction American public corporation that runs a chain of large, discount department stores World's largest public corporation by revenue Largest private employer in the world Fourth largest utility or commercial employer Largest grocery retailer in the United States ( 20% ) Largest toy seller in the United States ( 22% ) Slide 4: Founded - Arkansas, USA(1962) by Sam Walton Headquarters - Bentonville, Arkansas, U.S.A. Products - Discount Stores, Super centers, Neighborhood Markets Revenue - US$ 351.1 billion (2007) (Ranked # 1 on Fortune 500 list) Net income - US$ 11.3 billion (2007) Total assets - US$ 151.193 billion (2007) Total equity - US$ 61.573 billion (2007) Employees - 1.9 million (2007) Slogans - The Lowest Prices. Guaranteed! - Save Money, Live Better (U.S.) - WE SELL FOR LESS every day! (Canada) Wal-Mart at a Glance Wal-Mart at a Glance (contd..) : List of Assets In U.S.A.- Wal-Mart Stores Division U.S. (3,900) Wal-Mart Discount Stores (1,033) Wal-Mart Super centers (2,349) Wal-Mart Neighborhood Markets (124) Sam’s Clubs(585) Internationally- Stores in 14 countries outside U.S. (2980) Joint venture with Bharti Enterprises to enter India(2006) Wal-Mart at a Glance (contd..) History of Wal-Mart : History of Wal-Mart Sam Walton - The man behind it all Born in a farmer’s family in Kingfisher, Oklahoma on March 29, 1918 Graduated from the University of Missouri in 1940. First job – at JC Penney at $ 75 a month Gave up job and opened his first store in Arkansas in 1950- Walton’s 5 & dime 11 stores by 1962. Opened 1st Wal-Mart At the opening, Walton stated, "Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community." History of Wal-Mart (contd..) : Opportunities in small towns along with innovative practices like self service By 1969, Walton had established 18 Wal-Mart stores, reporting an annual sale of $44 million Commenting on the growth of Wal-Mart, Walton said: “When we arrived in these small towns offering low prices every day, customer satisfaction guaranteed, and hours that were realistic for the way people wanted to shop, we passed right by that old variety store competition, with its 45 percent mark ups, limited selection and limited hours.” Focus on overseas expansion in 90’s In 2000, H. Lee Scott became President and CEO, and Wal-Mart's sales increased to $165 billion Wal-Mart was quickly becoming a global giant (But was the true story really this glorious???) History of Wal-Mart (contd..) History of Wal-Mart (contd..) : In 1998, Walton was included in Time Magazine's list of 100 most influential people of the 20th Century Forbes ranked Sam Walton as the richest man in the United States from 1985 to 1988 Supported various charitable causes, including those of his church, the Presbyterian Church (USA) Wrote an autobiography – “Sam Walton Made in America-My Story” Sales increased from US $11.6 million in 1967 to US $315.3 billion in 2007 History of Wal-Mart (contd..) The Corporate Strategy : The Corporate Strategy Sam Walton gave 3 policy goals to define Wal-Mart's business – # Respect for the individual # Service to customers # Strive for excellence Walton’s practices- # Consistently stock the shelves with a wide range of goods at low prices # Keep the store open later than most other stores, especially during the Christmas season # Discount merchandising- - Buy wholesale goods from the lowest priced supplier - Pass on the savings to the customer The Corporate Strategy (contd..) : Strategic Goals Three successful elements of strategy formulation and a fourth element, where the strategy is implemented successfully Dominate the Retail Market wherever Wal-Mart has a presence Growth by expansion in the US and Internationally Create widespread name recognition and customer satisfaction with the Wal-Mart brand, and associate the retailer with the reputation of offering the best prices Branching out into new sectors of retailing such as pharmacies, automotive repair, and grocery sales Lee Scott, CEO, Wal-Mart- “When a store is in place, its goal is to dominate its local competition in every department of merchandise sold, to become the number one retailer in that sector.” The Corporate Strategy (contd..) The Corporate Strategy (contd..) : The Corporate Strategy (contd..) Competitive Strategy- Dominate every sector where it does business Measure success in terms of sales and dominance over competitors (doesn’t mind putting some of them out of business) Sell goods at low process, outsell competitors, and to expand A typical Wal-Mart model is to build more stores, make existing stores bigger, and to expand into other sectors of retail Company Mission- As Wal-Mart continues to grow into new areas and new mediums, our success will always be attributed to our culture. Whether you walk into a Wal-Mart store in your hometown or one across the country while you're on vacation, you can always be assured you're getting low prices and that genuine customer service you've come to expect from us. You'll feel at home in any department of any store...that's our culture The Corporate Strategy (contd..) : The Corporate Strategy (contd..) Practices followed- Aggressive hospitality # Using door-greeters # Patriotic themes and displays in stores # Compels its staff to engage in morning cheers Affiliations with charities The United Way and Children's Miracle Network Sundown Rule All customer and supplier requests or queries must be reasonably answered within 24 hrs by all employees Ten Foot Rule Store employees must greet, smile, and attend to a customer in a store when within 10 feet of them The Cookie begins to crumble : The Cookie begins to crumble Criticism of Wal-Mart : Criticism of Wal-Mart Local communities Store openings- At sites of archaeological relevance in Mexico At American Indian burial grounds and a Civil War battle site in Tennessee Economic Impact- In a paper published in Farm Foundation in 1997, Kenneth Stone, Professor of Economics at Iowa State University found that some small towns can lose almost half of their retail trade within ten years of a Wal-Mart store opening Traditional Mom’s & Pop’s forced out of business Criticism of Wal-Mart : Pricing and Competition Issues Sued by many competitors for predatory pricing (intentionally selling a product at low cost in order to drive competitors out of the market) Investigated by the Federal Competition Commission for “monopolistic practices” Retailer pressured suppliers to sell goods below cost or at prices significantly less than those available to other stores in 2003, the German High Court ruled that Wal-Mart's low cost pricing strategy "undermined competition" and ordered Wal-Mart to raise it’s prices Wal-Mart sells all its stores in Germany Accused of using monopsony power to force its suppliers into self-defeating practices Criticism of Wal-Mart Criticism of Wal-Mart : Employee and labor relations Wages A Substantial Number of Wal-Mart Associates earn far below the poverty line # In 2001, sales associates, the most common job in Wal-Mart, earned on average $8.23 an hour for annual wages of $13,861. The 2001 poverty line for a family of three was $14,630 #A 2003 wage analysis reported that cashiers, the second most common job, earn approximately $7.92 per hour and work 29 hours a week. This brings in annual wages of only $11,948 Criticism of Wal-Mart Criticism of Wal-Mart : Wal-Mart Associates don't earn enough to support a family # For basic needs, the average 2-person family needed $27,948 in 2005.Wal-Mart claimed that its average associate earned $9.68/hr in 2005($17,114 annually) Sam Walton - "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment.“ Wal-Mart managers are judged, in part, based on their ability to control payroll costs Wal-Mart's 2006 Annual Report reported that the company faced 57 wage and hour lawsuits 1.6 million women workers filed a lawsuit of gender discrimination in 2004 - the largest nationwide civil lawsuit against a private company ever. Criticism of Wal-Mart Criticism of Wal-Mart : Working conditions In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had been forced to work off-the-clock In December 2005, a California court ordered Wal-Mart to pay $172 million in damages for failing to provide meal breaks to nearly 116,000 hourly workers On October 16, 2006, 200 workers at Wal-Mart Super Center, Florida, walked out in protest against new store policies and rallied outside the store, shouting "We want justice", criticizing the company's recent policies as "inhuman“. A report by Congressman Miller alleged that in ten percent of Wal-Mart's stores, night-time employees were locked inside, holding them prisoner. Criticism of Wal-Mart Criticism of Wal-Mart : Criticism of Wal-Mart Criticism of Wal-Mart : Child labor violations and Illegal workers Internal Wal-Mart audit conducted in July 2000- # 1,371 instances of minors working too late, during school hours, or for too many hours in a day #60,767 missed breaks and 15,705 lost meal times Wal-Mart agreed to pay $135,540 to settle child labor violation charges in January 2005 Wal-Mart has also been fined $205,650 for 1,436 violations of child labor laws in Maine for the period 1995 to 1998 On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states of The United States, in a crackdown known as, "Operation Rollback," resulting in the arrests of 250 nightshift janitors who were undocumented. Wal-Mart pays $11million to settle this lawsuit. Criticism of Wal-Mart Criticism of Wal-Mart : Health Insurance Wal-Mart reported in January 2006 that its health insurance only covers 43% of their employees. Wal-Mart had approximately 1.39 million US employees that time Wal-Mart increased advertising more than health care According to Wal-Mart’s website, "In January 2006, ...Coverage will be available for as little as $22 per month for individuals” What the website leaves out- Coverage is affordable, but using it will bankrupt many employees. Includes a $1,000 deductible for single coverage and a $3,000 deductible for family coverage President and CEO Lee Scott in 2005- "In some of our states, the public program may actually be a better value - with relatively high income limits to qualify, and low premiums." Criticism of Wal-Mart Criticism of Wal-Mart : Labor union opposition Efforts of UFCW (United Food and Commercial Workers Union) to interact with workers, foiled each time Wal-Mart closed its store in Quebec in April 2005 after its employees received union certification Wal-Mart has issued "A Manager's Toolbox to Remaining Union Free“ In 2000, a small meat cutting department successfully organized a union at a Wal-Mart store in Texas. Wal-Mart responded a week later by announcing the phase-out of its in-store meat cutting company-wide. Criticism of Wal-Mart Criticism of Wal-Mart : Taxes The estimated total amount of federal assistance for which Wal-Mart employees were eligible in 2004 was $2.5 billion One 200-employee Wal-Mart store may cost federal taxpayers $420,750 per year. This cost comes from the following, on average: Criticism of Wal-Mart The Wal-Mart Reaction : Sam Walton launched the “Buy American” campaign in the 1980s.Agreed to pay 5% more for products made in US. In December 1992, in an interview with NBC program Dateline, CEO David Glass on non-American labor and low wages and child labor-”We are equally dependent on American factories and ‘Buy American’ is still active” Not satisfied, NBC showed “Made in USA” labels being hung over merchandize bought from overseas in most of the Wal-Mart stores. Glass said- “Its some sort of a mistake at store level, and we don’t buy from any vendor that uses child labor.” During the interview, Glass is shown videos of child labor working in plants. What does Glass say?? “We take care that we rely least on child labor” The Wal-Mart Reaction The Wal-Mart Reaction : “No Comments”, says Wal-Mart Few weeks later, Glass returned for another interview, saying he wasn’t prepared with the facts the last time. Fair enough, NBC says. Glass maintains there's no child labor in Bangladesh stores. NBC shows videos. Glass fumes, saying videos were doctored, and walks out. No more details revealed to the media. Another interview….same story Interview with “60 minutes” (the most reputed news show in the USA) in 1994. Wal-Mart charged with impairing growth of small stores. Wal-Mart held its silence. On launch of Supercenters in mid-1990s, local officials responded vaguely to media queries and directed them to their annual reports. The Wal-Mart Reaction The Wal-Mart Reaction : Even in the situations when PR could’ve helped the company, the executives faltered. When Wal-Mart entered Canada in 1995, company officials seemed very unsure and dubious during a press meeting. Result - Newspapers carry out articles ridiculing the company’s poor public relations-”Short of substance”, “Circumspect”, ”Executives skirt major questions”. The National Organization for Women demonstrated in front of Wal-Mart stores, calling it “Merchant of Shame”, distributed cards reading – “Wal-Mart: Always Low Prices, But Who Pays?” Protests begin to mushroom from every corner. Wal-Mart still holds its silence. Not for long though The Wal-Mart Reaction The Wal-Mart Reaction :  The Wal-Mart Reaction For most of its 43 years, Wal-Mart has been notoriously tight-lipped. A 2004 report prepared by McKinsey & Company for Wal-Mart found that 2% – 8% of Wal-Mart consumers surveyed have ceased shopping at the chain because of "negative press they have heard.“ “The sleeping giant has to be awakened and has to emerge with a defensive posture and a take-no-prisoners attitude.” Gail. F. baker, PR Expert, University of Florida “I think they are going to have a tough time suddenly overcoming the perceptions of some people. It is going to be a tough sell on their part.” - Larry Bevington, Chairman, Save our Community The Wal-Mart Reaction : Wal-Mart does wake up…But is it too late?? “For too long others have had free rein to say things about our company that just aren’t true. We’ve decided it’s time to draw our own line in the sand.” - Lee Scott, CEO, Wal-Mart Inc. A “DO or DIE” situation for the giant retail chain To face the communication crisis, a PR team is put in place A PR campaign is launched in over 100 newspapers under CEO Lee Scott on January 13, 2004 Jay Allen, Senior VP, Corporate Affairs, said campaigns aimed at long term solution to improve the tarnished image. NOT a response to “any specific charges” raised recently. With newspapers including New York Times and Wall Street Journal among others, criticism on money “wasted” CEO issued an open letter in the ads stating that the company provides “good jobs with excellent advancement opportunities.” The Wal-Mart Reaction The Wal-Mart Reaction : Wal-Mart’s Benefits Manager sent a letter to New York Times, ascertaining that the company provided health benefits to its employees. District Manager wrote a similar letter to The Salt Lake Tribune. CEO, Lee Scott, became the first Wal-Mart person to address the National Retailer Federation Trade Group, condemning the media’s wide coverage on lawsuits against the company. “If our policies had been so bad, then the chain wouldn’t have grown to this size, attracting such a large customer base.” Moving away from the low prices, company focussed on creating goodwill to restore its image. TV commercials showed employees giving testimonials about the benefits they get at the company The Wal-Mart Reaction The Wal-Mart Reaction : Accelerating the image makeover, Wal-Mart increased its political donations to $1 million In an alliance with NPR (National Public Radio), Wal-Mart announced in radio shows about being a good employer and bringing job opportunities and quality goods and services to local communities Began offering scholarships for journalistic studies in about 10 universities all across the USA But despite all this, the problems didn’t die. Lawsuits kept on increasing by the day, anti-Wal-Mart communities began to grow. Was Wal-Mart’s sheer size the main problem?? “Wal-Mart’s very success may be working against it. Big empires are hard to manage, and the public tends to mistrust institutions that get too mighty” – A brand analyst The Wal-Mart Reaction The Wal-Mart Reaction : Wal-Mart recruited former presidential advisers, including Michael K. Deaver (Ronald Reagan's image-maker), and Leslie Dach (Bill Clinton's media consultant) to set up a rapid-response PR team in Arkansas. Result- On January 13, 2005, millions of Americans opened their morning papers to find a full-page ad declaring, "Wal-Mart is working for everyone," and signed by Lee Scott. Same morning, Lee Scott appeared on Good Morning America, Fox News, and CNBC Scott called the company's carefully orchestrated PR campaign "an outreach.“ BUT, Scott didn't pull it off. On-screen he was reserved and careful. His gaze was flat, his smile thin and forced. His low-key manner in the face of critical allegations came off as dispassionate. The Wal-Mart Reaction The Wal-Mart Reaction : Scott kept promising to tell the real story and provide the real facts. But from one interview to the next, it became clear that the retailer only wanted to tell part of the story and share “certain” facts When asked on Good Morning America how much Wal-Mart imports from China, Scott said he didn't know. ABSURD??...Coming from a company known for tracking practically everything, pretty much yes. Wal-Mart believed the cause of the bad image to be the lack of awareness among the public. So, it thought the image would automatically be restored if the facts were made available to the people. This resulted in the launch of a website, walmartfacts.com. Had links to all the labor policies, lawsuits, benefits to the employees and philanthropic activities undertaken by the company. The Wal-Mart Reaction The Wal-Mart Reaction : Wal-Mart also bought paid search ads from Yahoo! and others A basic search on Yahoo! resulted in a sponsored link to the site walmartfacts.com saying, “Who drives Wal-Mart? Want to know the facts? Go to walmartfacts.com” Wal-Mart planned to create 100,000 new jobs in the United States in 2005 Promoted more than 9,000 people from hourly jobs to salaried management jobs and made sure that this deed was made known to the entire nation through advertisements in both TV and print media. But was the extensive PR campaign serving its purpose or was it adding on to the never ending woes of Wal-Mart?? The Wal-Mart Reaction PR bloopers : Wal-Mart's ads trumpet its workers' average pay: nearly twice the federal minimum! Specifically, it's $9.68 an hour. Given Wal-Mart's 34-hour workweek, and deducting the health premiums and federal taxes, it comes out to about $1,200 per month Analysts criticized this and asked Scott to try living off this income before bragging about it Wal-Mart hires heavy-hitting public relations firm Edelman Wal-Mart and Edelmen come up with an advocacy group - Working Families for Wal-Mart According to the organization's official website, "Working Families for Wal-Mart is committed to fostering open and honest dialogue with elected officials, opinion makers and community leaders that conveys the positive contributions of Wal-Mart to working families.” PR bloopers PR bloopers : Former U.N. ambassador Andrew Young chosen to chair the company-funded Working Families for Wal-Mart. In an interview with an African American newspaper in LA, Young says the mega retailer "should" displace its urban corner-store competition. "You see, those are the people who have been overcharging us.... I think they've ripped off our communities enough. First it was Jews, then it was Koreans, and now it's Arabs.“ This comment attracted a lot of criticism and as a result Young had to leave. Wal-Mart VC, Thomas Coughlin cooked up fraudulent expense invoices in a scam to siphon off $500,000 over the course of seven years, at the expense of using the money for an antiunion initiative. Exposed by media PR bloopers PR bloopers : In September 2005, Edelman comes up with a new blog called Wal-Marting Across America on the internet. The blog documents the “spontaneous” discoveries of RV-traveling mega store fans Jim and Laura as they pull over to chat with happy Wal-Mart employees. It neglects to mention that Wal-Mart arranged Jim and Laura's itinerary, paid for the RV, and compensated them for the blog entries. Exposed by BusinessWeek.com, the stunt was especially bad news for Edelman, since it violated ethical guidelines, something Edelman had been known to comply with. Walmart.com offers DVD shoppers helpful recommendations for films they might be interested in purchasing. However it didn’t turn out to be that helpful when the results of searches for some DVDs were made public. PR bloopers PR bloopers : Customers searched for : Charlie and the Chocolate Factory Planet of the Apes They were steered toward "similar items" such as : Martin Luther King: I Have a Dream Assassination of Martin Luther King Unforgivable Blackness: The Rise and Fall of Jack Johnson Wal-Mart spokeswoman Mona Williams says the company is "heartsick" over the incident but has "absolutely no evidence" that the connections were made intentionally. An innocent error or an intended poke at people of African American origin?? Whatever the truth may be, Wal-Mart instead of dowsing the fire, kept on fanning the flames. PR bloopers Anti-Wal-Mart groups : Over the years, several groups had come up, to bring to light the facts the public didn’t know about Wal-Mart Wake Up Wal-Mart - a union-backed campaign group affiliated with the UFCW, founded in April, 2005 The centerpiece of the organization is its website -WakeupWalMart.com Exposes all the facts and problems which the website walmartfacts.com doesn’t. Wal-Mart Watch, formed in the spring of 2005, is a joint project of The Center for Community and Corporate Ethics, a non-profit organization studying the impact of large corporations on society Anti-Wal-Mart groups Anti-Wal-Mart groups : Wal-Mart: The High Cost of Low Price, a documentary film released in 2005, presents an unfavorable picture of Wal-Mart's business practices through interviews with former employees, small business owners, and Wal-Mart executives. The movie has been seen by millions and has been highly acclaimed critically as well. New York Times had this to say - “BREATHTAKING” Wal-Mart came up with its own DVD film, defending its practices entitled Why Wal-Mart Works, and Why That Drives Some People C-R-A-Z-Y. But couldn’t undo the magnitude of damage already done. Anti-Wal-Mart groups Ten Steps to Turn Around Wal-Mart : Stop defending and start examining: “You can't address what you don't acknowledge”. Be prepared to accept responsibility, acknowledge difficult truths, and construct a plan for productive change. Begin a truly transparent process Fire your consultants: For years, Wal-Mart stayed clear of any form of PR, following Sam Walton’s policy that it’s a waste of money. But when it did, it hired a rogue's gallery of spinmeisters who've worked for Reagan, Clinton, Kerry, and Bush. All they did was reinforce Wal-Mart’s defensive posture, collected fat checks, and tried to win debating points in the consumer culture Remember, consumers don't pay attention to all those fancy words. They go for fairness. Ten Steps to Turn Around Wal-Mart Ten Steps to Turn Around Wal-Mart : Leverage your size to help your 1.6 million employees in unexpected ways : Make Wal-Mart an employer of choice instead of the exhaust system of the American economy. Support the communities you do business in by using your infrastructure and helping local school districts pool their buying and save on textbooks and other merchandise. Talk to the unions : You've spent years fighting and villainizing them. It’s time to think about the impossible: a solution that would let the unions in. Consumers wouldn’t mind spending an extra penny, knowing its providing for health care for families. Ten Steps to Turn Around Wal-Mart Ten Steps to Turn Around Wal-Mart : Support mom and pops : Start helping mom and pops in some imaginative ways. For eg., start a referral network Let the customers know where they can find the stuff you are never going to store. You end up making two friends – the local store and the customers. Expand your vendor base : Actively seek out small, innovative companies with exciting new products, and help them grow. Help the new entrepreneurs get stronger. Customers get bored by the same products on the shelf and they want to see you reach out to everyone. Ten Steps to Turn Around Wal-Mart Ten Steps to Turn Around Wal-Mart : Stop treating your employees like commodities : Demonstrate your commitment to getting people out of the minimum wage sinkhole as quickly as possible. Encourage your employees in entrepreneurship. Take pride in how many employees start a new company each year. You lose employees but it’s great PR to lose good people for the right reason Open up your business : Become less impenetrable. Act like you have nothing to hide. Install “factory-cams” at your captive manufacturing plants around the world, so anyone can check out the conditions 24/7 on your website Let management and store personnel blog Talk to the reporters Ten Steps to Turn Around Wal-Mart Ten Steps to Turn Around Wal-Mart : Use your extended warranty marketing as a model for other new services : Don’t give a chance to consumer advocates to raise a finger on the credibility of these policies. Offer discounts on future purchases, upon a single purchase above a certain amount. Kill the big holiday TV campaigns : You can’t afford health care benefits but you can afford to pay over-priced celebrities to dance around the TV screen?? No one would believe that these celebrities shop at Wal-Mart. Instead, run advertising that shows how Wal-Mart democratizes the holiday for real people. Make Wal-Mart an admired company, instead of a feared one. Ten Steps to Turn Around Wal-Mart The Wal-Mart Timeline : The Wal-Mart Timeline 1962: Company founded and opens first store in Rogers, Ark. 1967: 24 stores total $12.6 million in sales 1968: Expands out of Arkansas, opening in Sikeston, Mo., and Claremore, Okla. 1969: Company incorporates, becoming Wal-Mart Stores Inc. on Oct. 31. 1970: First distribution center opens in Bentonville, Ark.; Wal-Mart stock first traded 1971: First 100 percent stock split in May (market price: $47), stores in five states 1972: Stock listed on New York Stock Exchange 1973: Enters Tennessee 1974: Stores opens in Kentucky and Mississippi 1975: Enters Texas 1977: First acquisition: 16 Mohr-Value stores in Michigan and Illinois 1978: Acquires Hutcheson Shoe Company; pharmacy, auto center and jewelry divisions introduced 1979: Exceeds $1 billion in sales and enters Alabama, its 11th state 1980: Distribution center opens in Palestine, Texas 1981: Enters Georgia and South Carolina, acquires 92 Kuhn's Big K stores 1982: Enters Florida and Nebraska 1983: First Sam's Club opens in Midwest City, Okla.; acquires U.S. Woolco Stores; first one-hour photo lab opens in Tulsa, Okla.; stores open in Indiana, Iowa, New Mexico and North Carolina The Wal-Mart Timeline : 1984: Enters Virginia 1985: Enters Wisconsin and Colorado, acquires Grand Central Stores 1986: Enters Minnesota 1987: 25th anniversary, now 1,198 stores, 200,000 employees and sales of $15.9 billion 1988: First Supercenter opens in Washington, Mo.; 16 distribution centers in operation 1989: Wal-Mart in 26 states with the addition of Michigan, West Virginia, and Wyoming 1990: Wal-Mart becomes nation's No. 1 retailer; acquires McLane Company of Temple, Texas; enters California, Nevada, North Dakota, Pennsylvania, South Dakota and Utah 1991: Acquires Western Merchandisers, Inc., of Amarillo, Texas; enters Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey and New York; introduces Sam's American Choice brand; enters international market with Mexico City 1992: Founder Sam Walton dies April 5; now in 45 states with the addition of Idaho, Montana and Oregon; Wal-Mart enters Puerto Rico 1993: Forms international division and enters Alaska, Hawaii, Rhode Island and Washington; has first $1 billion sales week in December; acquires Pace Warehouse 1994: Acquires 122 Woolco stores in Canada; opens three value clubs in Hong Kong; now has 123 stores in Canada and 96 in Mexico The Wal-Mart Timeline The Wal-Mart Timeline : 1995: Chain has 1,995 Wal-Mart stores, 239 Supercenters, 433 Sam's Club and 276 international stores, with 675,000 employees and sales of $93.6 billion; Wal-Mart enters its 50th state, Vermont, and builds three stores in Argentina and five in Brazil 1996: Enters China 1997: Becomes the No. 1 U.S. employer, with 680,000 domestic employees and 115,000 internationally serving more than 90 million customers a week worldwide; Wal-Mart replaces Woolworth on the DJIA; has first $100 billion sales year 1998: Introduces Neighborhood Market concept in Arkansas; acquires 21 Wertkauf stores in Germany and enters Korea 1999: With 1,140,000 employees, Wal-Mart becomes world's largest private employer; acquires 74 Interspar units in Germany; acquires 229 stores from ASDA Group in the United Kingdom 2002: Purchases a 34 percent interest in Seiyu Ltd., with more than 400 stores in Japan, with options to purchase up to 66.7 percent; has its biggest single-day sales: $1.45 billion on Black Friday 2004: As of January, chain at 4,844 total stores internationally, 103 distribution centers, 1.5 million employees and sales in 2003 of $244.5 billion. The Wal-Mart Timeline Slide 49: Thank You

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