Wal Mart's Business Environment
When most people think of Wal Mart, they will often associate it with the various stores around the globe. This has helped the company to establish a major presence inside the retail marketplace. However, the challenges with the economy and competitive pressures have been impacting the business environment of the firm. To fully understand what is taking place there will be a focus on: the company's financial information, what was learned, how this can be used by management, the firm's financial health, the effects of globalization, examining benchmarks, the best practices, operational and products analysis. Together, these different elements will highlight the strengths and weaknesses of the firm. ("2012 Annual Report," 2012)
Review Wal Mart's income statement, balance sheet, and cash flow to determine the financial health of the company.
Wal Mart is in a strong financial position in contrast with their top competitors. The company has more revenues, cash, debt and free cash flow. Evidence of this can be seen by looking at the below table which is highlighting their fiscal position in comparison with Costco and Target.
Wal Mart's Pecuniary Position vs. Costco and Target
Company
Revenues
Cash Position
Debt
Operating Cash Flow
Wal Mart
$464.41 billion
$8.64 billion
$57.46 billion
$27.25 billion
Costco
$99.14 billion
$4.58 billion
$1.56 billion
$3.06 billion
Target
$71.86 billion
$1.47 billion
$18.55 billion
$5.81 billion
("2011 Annual Report," 2011) ("2012 Annual Report," 2012) ("Annual Report," 2011)
These figures are showing how Wal Mart is in a much stronger financial position in comparison with Costco and Target.
What have I learned about the Wal Mart by reviewing each statement?
After reviewing each financial statement, it is clear that Wal Mart is many times stronger than Costco and Target. This is because the company has more stores; they are focused on decreasing their operating costs and improving their revenues / cash position. The combination of these factors is helping Wal Mart to maintain and increase its dominance among the discount retailers. Over the course of time, this helps the firm to be able to adapt with changes in the economy and consumer demand. In many ways, one could argue that this allows them to remain competitive and address a host of challenges they are facing. ("2011 Annual Report," 2011) ("2012 Annual Report," 2012) ("Annual Report," 2011)
Is there information in any of these documents that is of a concern? If so, describe what it is and what it concerns.
The biggest concern is that Costco and Target are continuing to open retail locations. This is troubling, as these kinds of challenges will have an adverse impact on the costs and bottom line results of these firms. The reason why is from the economy facing tremendous difficulties with stagnant consumer spending and increasing costs in energy prices. The combination of these factors is creating a situation where these two companies could disappoint investors by engaging in overly aggressive activities. Moreover, they are opening in areas where Wal Mart has at least one of their retail locations or Sam's Club wholesale stores. ("2011 Annual Report," 2011) ("2012 Annual Report," 2012) ("Annual Report," 2011)
Evidence of this can be seen with Costco saying, "In the run-up to this year's holiday season, we also opened six new units in the following communities: Bucks County, Pennsylvania; Frisco, Texas; Pewaukee, Wisconsin; Augusta, Georgia; Yawata Kyoto and Zama, Japan. We have been actively reviewing potential sites and securing new properties during the economic downturn and have many promising locations to be developed over the next few years. And we are evaluating additional countries to help realize our goal of 1,000 warehouses in operation by the next 10 to 12 years." This is showing how Costco is trying to take market share from Wal Mart by going into locations where they are the most dominate. ("Annual Report," 2011)
These areas are problematic, as this could place pressure on Costco and Target to maintain a low price structure in contrast with Wal Mart. Yet, they are unable to follow the same kind of model and will feel squeezed from Wal Mart's aggressive marketing strategies. When this happens, there is the possibility of an increase in the underlying amounts of debt. While at the same time, their revenues from these locations will become stagnant. As a result, both firms should selectively focus on enhancing sales at existing retail locations and revamping their supply chain. If this were to occur, both companies can more effectively address challenges from Wal Mart and their lowest price guarantees. ("2011 Annual Report," 2011) ("2012 Annual Report," 2012) ("Annual Report," 2011)
How can management use this information moving forward?
Management can use this information to help determine locations where Wal Mart may not be as dominate in specific areas. Furthermore, both firms could engage in...
Wal-Mart may find that it is not able to "rollback prices" to compete with discount underwriters. One key opportunity for Wal-Mart is to focus on social welfare to improve their stature within the various communities Wal-Mart is located. Problem Definition As was stated at the outset Wal-Mart is one of the most reviled corporations within the United States. For the various reasons previously stated, Wal-Mart has attained a vastly negative reputation
Wal-Mart This work will discuss two problems or issues in my work setting (Wal-Mart) for their significant ethical implications. The work will look at ethical, legal and value principles in the face of the issues or problems. Wal-Mart has taken considerable grief and many legal hits over the last ten years, in part because of its massive size but also because of its massive success and arguably bad ethical decision
Wal-Mart Good for America? The story of Wal-Mart is a reflection of a company that has experienced unprecedented growth from its humble roots as a single store to an extent that it has become the most powerful retailer in the worldwide economy. This company has set the standard for many 21st Century businesses just like General Motors and U.S. Steel characterized the 20th Century corporations. The success of Wal-Mart can
Wal-Mart is the name that is well-known to all the households these days because it has established itself as the largest retailer the world over. The sales of Wal-Mart are growing with every passing day as the sales totaled up to more than $280 billion, according to the reports published in 2004. However, it should be noted Wal-Mart did not appear on the international with more than 4500 stores in
Wal-Mart Porters Wal-Mart Strategic Management Wal-Mart mission is based on the model that by simply saving people money so they can live better. The philosophy and overall business strategy was developed based on a simple idea created by founder Sam Walton: offer shoppers lower prices than they can get anywhere else. This strategy has been the basis of an incredible history and growth record for the company. This strategy still guides the
Wal-Mart and Employee Rights Labor cost is always considered as the main issue, mostly in case of employees' unionization at Wal-Mart. This was noticed when Wal-Mart showed a remarkable earning at the rate of 44% per annum for its labor working on hourly basis. Another point which brought this issue ahead was when the sales clerk of Wal-Mart in 2001 earned wages below Federal Poverty Scale. According to an issue of
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now