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ABSTRACT
Study of the cost structure of a cost leader in Retail Industry Ð- WALMART
In the present world, most of the developed economies are using the retail industry as their vital growth instrument. Not only U.S but also the other developed countries like U.K, Canada, France etc. are experiencing tremendous growth in their retail sectors. This boom in the global retail industry was in many ways accelerated by the liberalization of retail sector. Observing this global upward trend of retail industry, now the developing countries like India are also planning to tap the enormous potential of the retail sector. Wal-Mart, the worlds largest Retailer is interested in opening shops in India.
Therefore, having narrowed down on this sector we aim to study the cost structure of the leading player Walmart and compare it with other players in the industry. When the main basis of competition is price and offering a wide variety of products, various kinds of costs come into play Ð- be it purchasing costs, real estate costs (which is major expense for a big retail store like Walmart) etc. Therefore, it would be interesting to study how this cost leader takes decisions to cut costs and later on suggest, if any, measures for optimizing the cost structure.
The methodology used would be using literature available online and apply concepts of cost leadership and life cycle costing to analyze the cost structure of this company.
Comment:
You can look at how industry view costs in retail Ð- for eg shelf space per sq ft.
You can look at value chain analysis and not life cycle costing.