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Wal-Mart and its Mid-Life Crisis

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Analyze the following case study:
Maich, S. (2004). Wal-Mart's mid-life crisis. Maclean's, 117(34), 45.

Include responses to the following questions in your analysis:
-Is it "mid-life crisis" or "mid-life laziness" that this article communicates about Wal-Mart's marketing? Did management " lose its way" and forget the concepts and tenets that made the company successful?
-How might Wal-Mart use holistic marketing to address its mid-life crisis?
-Match the facts of this case (poor growth by Wal-Mart, etc.) to the appropriate marketing management tasks. Can you see a relationship between Wal-Mart's symptoms and how well marketing management performed its tasks? Why or why not? A bar code with a slanting arrow depicting downfall.
-Write your case analysis in a 3-5 pages.

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Solution Preview

Maich, S. (2004). Wal-Mart's mid-life crisis. Maclean's, 117(34), 45.

http://www.businessweek.com/stories/2007-04-29/wal-marts-midlife-crisis

Include responses to the following questions in your analysis:
-Is it "mid-life crisis" or "mid-life laziness" that this article communicates about Wal-Mart's marketing? Did management "lose its way" and forget the concepts and tenets that made the company successful?

Management didn't lose its bearings but faced many different factors that resulted in losses to rival competitors and damages to the image of the company. Underlying economics of expansion, the lower price model, and other variables associated with marketing fallacies all resulted in Wal-Mart sagging in sales and rowt. Wal-Mart faced a precarious position at the time this article was written similar to Microsoft and McDonalds Corp. These companies were simply too big for their own size and building at unsustainable rates in regard to new stores that squeezed out competition and brought regulatory pressure as well as public backlash. Part of the problem was understaffed stores, stores located so close to existing ones that Wal-Mart ends up competing with itself. Wal-Mart should have cut way back on new-store building to concentrate instead on extracting more value from existing stores, but even this approach is questionable because Wal-Mart ...

Solution Summary

This solution of 839 words analyzes the case of Wal-Mart and its mid-life crisis and how the company 'lost its way' in achieving success. It also looks at how holistic marketing and also appropriate marketing management can remedy its crisis.

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Case Study:

What happens when a company reaches a mid-life crisis?

People often hear about the problems of a mid-life crisis - declining health, too much stress, changing physical appearance, or withdrawal from social relationships. As you probably know, an entire industry has emerged to help people through their mid-life crises. But what about companies? Do they experience mid-life crises also? The answer is yes, and researchers have begun to analyze the mid-life doldrums that many of America's top companies are experiencing. Of particular interest is how mid-life companies deal with disappointing growth.

Wal-Mart experienced exceptional growth during the last three decades. Over the past two years, however, Wal-Mart's performance has started to show signs of stress and fatigue. Growth averaging only 2% does not send out positive signals to the people who watch this retailing giant. This small growth percentage is especially troubling since major competitors, such as Costco, Target, Kroger, CVS, and Best Buy, have enjoyed increases averaging five times Wal-Mart's meager rate.

The economic and competitive environment Wal-Mart faces has become increasingly difficult. Also, mismanagement, increasing inventories, loss of market share, and distribution difficulties have begun to plague the industry's cost and price leader. New turnaround strategies that management will try include increased advertising, a more holistic approach to marketing strategies, a specific focus on upscale and affluent consumers, store refurbishment and redesign, a renewed commitment to "everyday low pricing" and cost control, and an aggressive global expansion strategy. A mid-life crisis can be a difficult challenge. It will be interesting to see how Wal-Mart ages and how the company handles the difficulties that come with its increased years.

Adapted from "Wal-Mart's Midlife Crisis," by Anthony Bianco, Business Week, April 30, 2007, pp. 46-56.

Case study developed by Dr. John R. Brooks, Jr., Houston Baptist University.

Questions:

1. Why should Wal-Mart be worried about a mid-life crisis?
2. How might Wal-Mart use holistic marketing to address its mid-life crisis?

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