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WAL-MART
� “Listen to everyone in
your company, exceed
your customers'
expectations, but most
importantly, control your importantly, control your
expenses better than
your competition, this is
where you can always
find the competitive
advantage.” Sam
Walton
WALMART IS A BUY!
� Growth
� Leader in its industry
� Strong Financials
� No real threats
� Good Management
� Successful in their business model
� Future Growth
Wal-Mart’s History
� 1960s
� Foundation and incorporation
� 1970s
� Wal-Mart goes public� Wal-Mart goes public
� 1980s:
� Sam’s Club and Superstores open
� 1990s:
� Expansion everywhere
Sales
100,000
120,000
140,000
160,000
180,000
0
20,000
40,000
60,000
80,000
100,000
1996 1997 1998 1999 2000
Wal-Mart
K-Mart
Target
Number of stores
2,500
3,000
3,500
4,000
0
500
1,000
1,500
2,000
2,500
1998 1999 2000
Wal-Mart
K-Mart
Target
Porter’s Five Forces
� Bargaining Power of Suppliers
� Threat of New entrants
� Bargaining power of Buyers
� Threats of substitute products or services
� Rivalry among existing competitors
Strong Financials
� EPS� 1.25
� PE Ratio� 41.61
� Current Ratio� 0.99� 0.99
� Debt/Equity� 0.67
� Return on Assets� 8.18%
� Return on Equity� 20.29%
No real threats
� Margins are decreasing
� Still have best margins in the industry
� K-Mart coming back and beating Wal-Mart:
� Yeah, like that’s going to happen
Basket of Goods Analysis
� Looked for .. Items and recorded their price
� Electronics
� Clothes
� Pharmacy
Sports� Sports
� Cleaning Supplies
� Food
� School Supplies
� Hardware
� Calculated total savings
Good Management
� President & CEO
� H. Lee Scott
� Executive Vice President
� Thomas D. Hyde� Thomas D. Hyde
� Chairman of the Board
� S. Robson Walton
� CIO
� Thomas M. Schoewe