B. CORPORATE CULTURE
The corporate culture of Wal-Mart is one of the biggest contributing factors that make it one of the world's most admired companies. From the three basic beliefs to the sundown rule, we respect our customers, associates and suppliers and strive to treat them as we ourselves want to be treated. In building and nurturing these relationships, as well as serving the communities where we live, we've helped build a better business - one committed to excellence." (Website of Wal-Mart Stores, 2007)
1. The Wal-Mart culture is based on high standards of ethics, morality and integrity.
2. A new feature promoted by the company includes the usage of environment friendly procedures and packaging
3. Wal-Mart treats all employees, partners and customers with the utmost respect
4. Wal-Mart values diversity and encourages innovation
C. CORPORATE RESOURCES
1. Marketing a. Product
Wide array of products
Everything from grocery and apparel to general merchandise
Both organic and non-organic products b. Promotion
Strong advertisements and promotions realized by the Wal-Mart marketing department with the aid of specialized firms
Advertisements aired on all media channels, including television advertisements, radio announcements, internet ads, street banners, flyers and interviews in newspapers and journals
Focus on the low prices c. Price
Low prices generally due to cheap imports
The cheap products pose significant threats on local businesses (CI#2) d. Place
International coverage as Wal-Mart is present in all American States and another 13 countries
Available for online purchases at http://www.walmart.com/
2. Research and Development
Since Wal-Mart is simply a retailer, they do not feel the need for product innovation and improvement, therefore the R&D budgets are rather limited
3. Operations and Logistics
Basically include the import of low cost products, transport, storage, inventory and selling of the items
No major difficulties are encountered as the corporation employs strict procedures that insure a smooth ongoing of the operations highly efficient logistics system that allows the conglomerate to collect and then transport products to numerous destinations
The high efficiency of Wal-Mart's operations and logistics represents the key to their ability to maintaining low retail prices
4. Human Resource Management
Almost 2 million employees in 2007
Wal-Mart employees work an average of 34 hours per week; they are discouraged to work overtime and are presented with training programs
Sales associates is the most common position within Wal-Mart
Employees are generally dissatisfied with the wages, lower than in other companies, and the benefits, which generates an increased turnover (CI#3)
5. Information Systems
Skilled and qualified technicians to maintain and update the information system and databases
Offer the backbone for online purchases and assistance
The Information System Division is focused on three beliefs and five commitments
Beliefs: "Respect for Individual; Service to our Customers and Strive for Excellence"
Commitments: "Know the Business; Build it Right; Show the Value; Count on Us and Teach Up" (Information Systems Divisions, Wal-Mart Stores Website)
6. Financial Data and Analysis
Financial highlights for 2006, 2005 and 2004:
Net Sales $312,427 $285,222 $256,329
Cost of Sales $240,391 $219,793 $198,747
Net Income $11,231 $10,267
Diluted Earnings per Share
Long-Term Debt $26,429 $20,087 $17,102
Return on Assets
Return on Shareholders' Equity
Note: The data are presented in million of dollars and have been retrieved from the Wal-Mart Annual Report for 2006
7. Wal-Mart Ratios
Ratios
Value for fiscal year 2006
Valuation Ratios
P/E Ratio
Price to Sale
Price to Book
Dividend Yield
Profitability Ratios
Gross Margin
Operating Margin
Pre-tax Margin
Net Profit Margin
Effective Tax Rate
Management Effectiveness
Return on Assets
Return on Investment
Return on Equity
Efficiency Ratios
Receivable Turnover
Inventory Turnover
Asset Turnover
Data retrieved from Reuters Website in November 2007
1. Valuation Ratios - are identified in order to ease the comparison of the price of a company stock with other stocks on the market
1.1 Price to Earnings (P/E) Ratio = Price per Share / Earnings per Share
Wal-Mart's P/E Ratio is a bit higher than the industry's (14.71>14.55), meaning that the investors are paying more for each unit of income and are expecting increased growth in comparison to other companies in the industry. (Investopedia, 2007)
1.2 Price to Sales Ratio = Share Price / Revenue per Share
The Wal-Mart price to sales ratios is almost identical with the industry's P/S Ratio, meaning that the value of the WMT stocks is extremely well balanced with other traded companies in the industry.
1.3 Price to Book = Stock Price / (Total Assets - Intangible Assets and Liabilities)
Wal-Mart's price to book ratio is a bit higher than the industry's ratio (2.93 > 2.66)....
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