The source of the problems that are being faced by the Wal-Mart Company pertain to the culture at the company, and the philosophy of business undertaking and operations as established and abided to by the company since its inception. The company was initiated in 1962, and since then the competitive landscape in the retail division has changed dramatically. At the time of its initiation the company focused on low prices and providing products and services to customers under one roof. The costs by the company were reduced by eliminating aesthetics of the stores, focusing on efficient distribution process and the management of inventory. current retail industry.
Over the period of years, the economic conditions in America as well as the restructuring and developmental strategies employed and differentiated products and services provided by the competitors have made the consumers highly conscious of quality, store aesthetics, atmosphere as well as value added services. This has made the lowest price strategy previously employed by the company ineffective. The resulting problem that is faced by the company is the declining profitability of the company.