In order to improve the output power and wall plug efficiency (WPE) of the broad area 940 nm semiconductor laser diode (LD), we design and fabricate a new type quantum well LD with a step graded index (GRIN) structure. By using a two-dimensional self-consistent software, the energy band structures of step GRIN structure laser and traditional separate confinement heterojunction (SCH) laser are simulated and compared. The result shows the significant elimination of band offset between heterojunctions in step GRIN structure. High quality laser materials are obtained by using low-pressure metal organic chemical vapor deposition (LP-MOCVD) method. Broad area laser devices with 100 μm wide stripe and 2000 μm long cavity are fabricated and tested under 25 ℃ continuous wave (CW) operation condition. The new step GRIN structure laser diode shows a drop down voltage of 0.07 V at 10 A operation current than the SCH structure laser. By optimizing the design and growth method, the internal loss of step GRIN structure laser is reduced from 0.52 cm-1 to 0.43 cm-1 and the wall plug efficiency is increased from 69% to 76%. The LD chip yields a slope efficiency of 1.24 W/A and 10.0 W at 10 A operation current at 25 ℃ room temperature.