Scholarly Activity I Wal-Mart John I. Miles IV MBA 6601 October 14, 2012 Professor Yvonne Balbin Abstract Ranked number three in the retail market Wal-Mart has enjoyed much success with overseas profits raves Global 500. The goal of saving people money has always been Wal-Mart’s intention but profits are suffering in today’s American economy. Wal-Mart was founded on the goal and philosophy of providing the lowest price to its consumers however, legal and political environments of certain countries may dictate an organizations way of thinking in terms of investments, operating modes, risks, and resources contends Daniels, Radenbaugh, & Sullivan, (2011). This paper will discuss the company’s global issues, market and legal systems,
7) The 4 factors of competitive advantage for both companies. 8) What are Wal-Mart and Safeway’s ethical considerations? 9) Competing head to head with Wal-Mart, Burd had to make a difficult decision: Should Safeway increase investment in its newly acquired underperforming chains of grocery stores in Pennsylvania, Chicago, and Texas, or should it put underperforming stores for sale, thus divesting itself of its unsuccessful acquisitions? 10) The Grocery Industry Porter’s Five Forces Wal-Mart Bargaining Power of Suppliers: Suppliers have lost power over pricing and other terms due to Wal-Mart’s size Wal-Mart is a key customer to most of its suppliers and they are totally dependent on Wal-Mart for business Wal-Mart engages in aggressive selling tactics Bargaining Power of Buyers: Wal-Mart gets some of the best terms when it comes to buying product from suppliers Wal-Mart’s customer count is so high any vendor that has product in their store is almost guaranteed to increase their business sales and profits Wal-Mart has very high customer awareness so vendors are willing to sacrifice things to get their product into the Wal-Mart stores, giving Wal-Mart the upper hand in negotiations. Threat of Entry: High Investment costs Extensive investment in information technology Extensive distribution network Threat of Substitutes: Department
Key Players Chester A. Wonka III, CEO: Ladies and Gentleman, I called you to this meeting to discuss the future of our company. As you are aware, our sales and profits have been stagnant the last few years. Our portfolio consists of two popular products, Willy’s Yummy Chews and Willy’s Sour Straws. No matter what we have tried, we have not been able to grow their sales, profitability and market share. In fact to maintain our market share, we have had to offer significant pricing and trade incentives.
The major quality that Wal-Mart possesses is its ability to adapt and change according to the needs of its customers while striving to keep prices of goods and services low. With annual sales of about $300 billion, around 68% of the sales come from Wal-Mart Stores, 19% from its international operations, and 13% from its Sam’s Club. Wal-Mart’s annual profits are about $10 billion and they have a market value of over $250 with assets worth over $105 billion (Mujtaba & Maxwell, 2011). This success has hurt many competitors in the process but their success is an example that many manufacturers and businesses should use as a case study to perfect their own inventorial
Case: Blue Nile, Inc., in 2010 (case 9 in text) 1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Which one of the five competitive forces is the strongest? Do a five-forces analysis to support your answer. After reviewing all the five competitive forces, my analysis showed that the weakest of the fives forces is the threat of new entry’s despite the possibilities of selling of a good with a high contribution margin, it is very challenging and expensive to develop a new competitor that could go head to head with Blue Nile and make a profit, let alone survive the competition.
Kohl’s Corporation versus JC Penny Corporation The retail climate in America has been especially weak this past year with little economic information forthcoming to change the downward direction of sales at most retailers. Especially challenged are the so-called mid-tier retailers named such as they sit between the discounters like Target and Wal-Mart and upper end department stores such as Macy’s and Bloomingdales. Two of the leading mid-level retailers in the U.S. are Kohl’s and JC Penney’s. In attempt to determine which one of these corporations is set to not only withstand, the current economic downturn but poised to enhance their market share. Within the last year JC Penny Corporation reached a 52 week high of 54.74 per share, while Kohl’s Corporation stock reached as high as 56.00.
The partners initially concluded that Stemberg was overestimating the market. “Look,” Stemberg told Romney, “your mistake is that the guys you called think they know what they spend, but they don’t.” Romney and Bain Capital went back to the businesses and tallied up invoices. Stemberg’s assessment that this was a hidden giant of a market seemed right after all. So Bain Capital invested $650,000 to help Staples open its first store in Brighton, Massachusetts, in May 1986. In all, it invested about $2.5 million in the company.
Big Lots, Inc. (BIG) Industry: General Merchandise Stores Rating Recommendation: HOLD 12-mo. Price target: $51.63 Most recent closing price: $45.65 * Dividend Yield: 1.55% * Investment Thesis: * BIG is in a retail transformation where the scope and value is not being recognized by the market * Their new management team is positioning BIG for success over the long-term * While sell-side analysts are hopeful about the stock, they are underestimating the extent to which BIG's transformation will necessitate multiple appreciation because the company will be more competitive in the discount arena. * BIG’s Earnings Rating increased from a 5 to a 7. The discount store average rating is a 4.7. * BIG has a Valuation rating of 4 while the S&P 500 COMPOSITE index has an avg.
The focus of the company was shifted to centralization; standardization of business processes, and new metrics for performance measurement was established. Due to such heavy prioritization on processes and profitability, Home Depot slipped on customer service and experienced loss of market share to its competitor Lowes. In 2007, Frank Blake was appointed to save Home Depot from plummeting further. Frank Blake and his leadership team turned back to the foundation principles on which the business was built- customer service and entrepreneurial culture. Even though there was a decline in sales due to recession, Home Depot was able to make a comeback by gaining market shares, aligning its business units and improving its information technology systems, merchandising, supply chain and employee morale.
PROBLEM STATEMENT How Higa Industries Co., Ltd .will facilitate innovative change to their system? The system has been used for five years and there were issues on hardware maintenance and support of the operating system. SWOT ANALYSIS Strengths * Original * High-quality service * Leveraging its distinctive product * Unique online marketing strategies Weaknesses * Lack of focus on telephone ordering * Lack of members in the Information Systems Group * Lack of secure reliability in the system Opportunities * Store Growth * Operational improvement * Attractive new product introductions Threats * Intensive competition from a fragmented number of small competitors * Price wars * Changing consumer habits towards healthier food choices SOLUTIONS Upon careful analysis of Higa Industries Co., Ltd. strengths, weaknesses, opportunities and threats, we come up on these following solutions that can help solve the problem: 1. Higa Industries should buy Fujitsu PRIMERGY TX120 servers. These store servers are supported by dust-proof rack,