Case Detail

Case Summary

Wal-Mart: The Store Wars

Case Number: 5-406-751, Year Published: 2011

HBS Number: KEL658

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Authors: Daniel Diermeier; Robert J. Crawford

Key Concepts

Politics, Business Communication, Business Policy, Conflict Management, Crisis Management, General Management, Government Policy, Labor Relations, Public Policy, Regulation, Reputation, Decision Making, Social Responsibility, Society and Business Relations

Abstract

In early 2004, residents of Inglewood, California, a working-class community just outside Los Angeles composed primarily of African- and Hispanic-Americans, were preparing to vote on a referendum that would change the city charter to allow Wal-Mart to build a supercenter on a huge, undeveloped lot in the city. Walmart had put forward the measure after the city council refused to change the zoning of a sixty-acre plot on which it held an option to build.
Numerous community and religious groups opposed Wal-Mart’s entry and campaigned against the referendum. Walmart promised low-priced merchandise and jobs, but these groups were skeptical about the kinds of jobs and compensation that would be offered, the healthcare that would be provided to employees, and the broader impact Walmart would have on the community. Inglewood was a pro-union community, so there was also opposition based on Walmart’s anti-union position.
On April 6 Inglewood residents voted to reject the referendum by a margin of 60.6 percent to 39.9 percent. Though smaller, less organized, and with fewer resources than Walmart, this coalition of community and religious leaders had defeated the global retailing behemoth.

Learning Objectives

After students have analyzed the case they will be able to (a) appreciate the importance of non-market factors to execute growth and market entry strategies, (b) understand how the decisions of political institutions depend on the issue context and the alignments of coalitions of interest, (c) formulate and assess strategies to overcome non-market barriers to entry.

Number of Pages: 16

Extended Case Information

Teaching Areas: Management

Teaching Note Available: Yes

Geographic: Inglewood, California, United States

Industry: Retail

Organization Name: Wal-Mart

Organization Size: Large

Decision Maker Gender: Male

Year of Case: 2004