WALMART, ITS CUSTOMERS, AND THE ECONOMY

walmart

In ALL THE MOVING PARTS: ORGANIZATIONAL CHANGE MANAGEMENT, I devote eight pages, integrated into various chapters, to demonstrating the operating expertise of Walmart.  The company has consistently performed as one of the best run American companies.

And, that, by the way, is why Walmart is so successful:  Success is always directly related to the management expertise that sets good strategy and engenders appropriate operating actions – such as, fostering employee efforts in support of customers.  In its recent earnings report, the company has racked up another good growth record – according to analysis, it was the company’s best quarter since the financial crisis that took place during the previous administration. Comparable sales at Walmart’s U.S. stores jumped 4.5% – the fastest growth in more than a decade. The company declared the current economy to be the best economy that their customers have experienced in decades.  The continuing growth of the company has meant that a lot of good strategizing took place along with a lot of hard work to bring the strategies to fruition.  CEO Doug McMillon took over in early 2014 and realized that, even though the company was still a highly successful operation ($16 billion in profits annually), that it had fallen into the habit of opening hundreds of new Superstores each year without attending to the declining customer sales and changing shopping habits.  Thus, in October of 2015, McMillon took the bold action of announcing that the company would change its strategy, and rather than investing in building more stores would invest in higher wages, cleaner and better-functioning stores, and digital operations like e-commerce.  Walmart leadership predicted that earnings per share would decline in the short-term (over the coming year) but would gradually recover and would stabilize by 2018.  The market hated the strategy, but it turned out to be just what Walmart needed.  And the company actually beat its own forecast:  Earnings Per Share (EPS) is now slated to be significantly higher than it has been in the past.  Americans spend $36 million per hour at Walmart stores across the U.S.  It’s a pleasure to see customers who have been so derided by current political detractors able to enjoy the fruits of the company’s hard work and good effort – the American way.  Sam Walton would, indeed, be proud.

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