Essay about Xzkjbhkjhlkjhjklh

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REV: APRIL 12, 2007

PANKAJ GHEMAWAT

Wal-Mart Stores’ Discount Operations
In October 1985, Forbes declared Sam Walton the richest person in the United States. With his four children, he owned stock worth $2.8 billion. That put him $1 billion ahead of the next person on the list, H. Ross Perot. By the end of April 1986, Walton’s net worth had swelled by another $1.6 billion.
Walton’s fortune consisted of a 39% stake in Wal-Mart Stores, a retailer that had focused historically on the Sunbelt. Although Wal-Mart had begun to diversify into other areas, discounting still accounted for 91% of the company’s sales in 1985 and 96% of its pretax profits. Wal-Mart had consistently led other discounters in both profitability and
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Consumers had become increasingly better informed since
World War II. Supermarkets had educated them about self-service, many categories of general merchandise had matured, and TV had intensified advertising by manufacturers. Government standards also bolstered consumers’ self-confidence. Many were ready to try cheaper, self-service retailers except for products that were big-ticket items, technologically complex, or “psychologically significant.” ________________________________________________________________________________________________________________
Professor Pankaj Ghemawat prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 1986 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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Wal-Mart Stores’ Discount Operations

Discount retailing burgeoned as a result. Discounters’

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