Walmart Organisational Analysis

Decent Essays
Register to read the introduction… The successful world retailers’ business categories include Wal-Mart Stores (U.S.), Sam's Club (U.S.), and International stores. The International segment yields about 20% of the companies’ overall business income and is responsible for several different types of restaurants and stores including Wal-Mart and Sam's Club in 13 …show more content…
Due to Wal-Mart’s immense size, they can purchase products in enormous quantities for very low prices, and then pass those low prices to their customers, thereby beating the prices of most rival retailers. This creates a catch-22, or a negative loop, for rival companies, because in order to grow in size they need customers, but Wal-Mart draws customers away from them with their lower prices, and these rivals can’t usually match those prices because they aren’t large enough. In order to compete with Wal-Mart, companies have to find new ways to offer low prices. Online retailers can cut costs by eliminating many expenses associated with a brick-and-mortar business. Costco derives most of its income with its membership fees, and therefore sells its products at nearly the same price it purchased them in order to try to keep prices low. A company like Costco can put up with very low profit margins over a significant period of time in order to gradually grows and pierces the competitive shield of Wal-Mart. Still, Wal-Mart is indeed in a very strong and difficult-to-shake position among …show more content…
The stock may deserve placement as a fairly conservative pick in a dividend-growth portfolio. In my opinion, the stock represents a fairly good value while it remains in the low-to-mid $50s. The business is highly scalable, and if the company can defend its domestic businesses and continue to grow at a reasonable pace internationally, while all the while generating substantial free cash flows used to pay dividends and buy back inexpensive shares, shareholder returns should be healthy and consistent. Due to the predictability of dividends and buybacks, WMT currently grows dividends and EPS like

Related Documents

  • Decent Essays

    Wal-Mart has a larger net worth and market cap than any of its competitors. There net profit margin ratio is good however is not performing than it should. The problem is that they price it too low. Wal-Mart can raise prices to prove this ratio; however, their volume of business makes up for this. Their ROI on its assets as well as their ROE is consistent unlike its competition.…

    • 1883 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    The satisfaction of the consumers makes them spread a good word of mouth which is a form of marketing. The company has financial resources that allow it to advertise its products through the media and various sources which convince more consumers to purchase from the company. These strengths are similar to Lowe’s company’s strengths. The company is the second largest retailer in the US market which increases this competitive position and advantage over the rest of the retailers. The size of the company allows it to avoid paying the high prices that are set by the wholesalers since it purchases stocks from the manufacturers and consequently reducing its operation cost and reducing the prices from the consumers and an increase in the profitability of the organization.…

    • 1452 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Stakeholders In Walmart

    • 964 Words
    • 4 Pages

    Suppliers: Wal-Mart’s Least Prioritized Stakeholders Suppliers have an interest in obtaining a lot of their product sold-out at Wal-Mart stores during a profitable means. This interest involves not simply the commercialism of the suppliers’ product, however conjointly the commercialism of those product at tolerably profitable costs. As businesses, supplier’s area unit stakeholders that need Wal-Mart to sell their product at higher costs. Even a small increase in costs will have a major profit to suppliers. Supplier’s area unit is at the lowest of Wal-Mart’s prioritization of stakeholders.…

    • 964 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    There exist numerous similar business magnates offer similar services and goods as Cotco. These firms tend to offer the goods at a relatively lower price in a bid to win customers from Cotco. According to Thompson, (2012), other firms go to the extent of cutting down the prices to low that they end up making huge losses as a result of lofty expenses with respect to the revenue generated. All these are tactics to win themselves more clients and hence acquire a huge market share. There is stiff competition among Costco, BJ and Sana club.…

    • 865 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    As Wal-Mart begun to grow its business, its environment changed; it forces suppliers and competitors to sell at their cheapest price. Nowadays Wal-Mart is one of the most successful companies in the world. However their slogan, ' 'everyday low price ' ', has a negative influence on the American economy. 2. What did you notice at the Wal-Mart shareholders meeting?…

    • 742 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Lotte has very fews options to finance their operations compared to their rivals whose owners are stakeholders since lotte is a family-owned corporation. As a result, lotte may deal with higher debt ratio when raising funds to introduce new products or projects or their developments are much depended on their net profits from business. In addition, along with many advantages, the potential competitions from other confectionery enterprises in the coming time are unavoidable for lotte. According to UK essays (2015), applying both "me too strategy" and "imitation strategy" helps lotte cut down cost for innovating new goods as well as new markets, extending delivery networks but it does not ensure that this strategy will not pose threats from its competitors who can also implement these strategies to develop rare or costly-to-copy…

    • 1799 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    It is based in the United States and has been operating in the quick service restaurant chain industry for almost 80 years (Bhasin, 2017). It has consistently changed into a main fast food restaurant by developing branches in various sections of the country and also in the foreign markets. McDonald’s is a major brand that is recognized globally considering that it has constantly sustained its standards in the delivery of quick services regarding their food serving to their consumers. A recent study has approximated that in the United States only, the company serves not less than 60 million consumers each month, a determinant of how huge McDonald’s is in the industry (Bhasin, 2017). McDonald’s is among the major fast food chains in the industry and the top competitors of Dunkin…

    • 1411 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Threats To REI Essay

    • 679 Words
    • 3 Pages

    “REI is the nation’s leading outdoor equipment outlet and largest retail cooperative in the United States” (Pun 45). However, REI faces a threat when it comes to larger chain sporting goods stores, and how they are able to maintain a higher profit margin while still meeting both quantity and quality of any given product. Other larger chain sporting goods stores that are public companies can issue more stocks in order to produce more capital, REI cannot. Therefore, REI sells their goods at a higher price than other retailers. While they cater to those who support environmentally friendly options they do close themselves off of a large part of the consumer public because of their high prices.…

    • 679 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    With the high availably it does not give the consumer a good barging stance on the price of soft drinks. The only real option that the consumer has in regards to bargaining power is the option to buy the generic brands like Kroger and Lucerne. Even though the option to buy the generic options are available to the consumer, the loyalty that each of the major brands is so strong and inexpensive, that it would require a significant economic drop for the consumer to switch to the lesser brands or cause the companies to cut…

    • 1154 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    New entrants will have to invest large amount of capital to establish their brand recognition, service, and variety of product offerings that Wal-Mart, Target, and others competitors that will continue to improve on every day. Besides that,existing companies may reduce prices in order to kick new competitors out of the market. Therefore, the threat of entrances is low. Power of buyers Consumers have many choices and opportunities to consider about products…

    • 1542 Words
    • 7 Pages
    Decent Essays