Can Walmart Possibly Fail?Join now to read essay Can Walmart Possibly Fail?David KoehlerApril 24, 2006Corporate Finance“Can Wal-Mart Possibly Fail”The Wal-Mart story is one that is sweet and simple led by small town man with a hard work approach. The one thing that Sam Walton valued was the idea of hard work. He was your every day hard working man that had an idea that would change the retail world forever. In 1985 when Forbes magazine named the Walton “richest man in America”, he surely was not your prototypically billionaire (Walton 1992). No, he did not reside in the financial capital of the world, New York, nor did live in the million-dollar mansion; his residence was in the little town in Arkansas called Betonville. His business principles were started at a very young age from his first couple of jobs. From his first venture as a milk boy, Sam always understood the value of the dollar and this knowledge of the dollar carried him very far in life, as we will discover later. If there was a penny lying on the street, Sam was the first to pick it up. Through my research of Wal-Marts dominance, I found Sams extensive background in athletics played a major part in Wal-Marts success. He was always one step ahead of his competition in whatever he did set out to do.
When answering the question, Can Wal-Mart actually fail? First I will examine the factors that led to their supremacy. The Wal-Mart family has always kept their finances very private. They never liked to be in eye of the public. Their old fashion approach to business from the start still remains in the company today. The family owns almost half of all the Wal-Mart stock on the market, thus making it hard for another entity to takeover the company. Sam always knew where his stock was. He was the never the person that wanted to live the high life. He always believed this is why so many companies have failed in the past and continue to fail in the future. Many owners with large percentage shares of stock in their company sell their stock for quick profit. They continue to sell, their stake in the company drops and then a takeover can occur.
The Wal-Mart Family Wants to Buy A New Company:
When a company is going through a revolution to become financially successful, there are many factors that contribute to a success. They are typically large, multi-million dollar shareholders. They could have several high-priced, global companies in each market, each with multiple investors. All of these factors mean that an entity could go bankrupt. When faced with bankruptcy (i.e. losing most of its businesses), the company can make a sudden recovery.
Another factor is financial. When a company is facing financial difficulties, they are very aggressive when they are trying to be competitive. The price of a company is not always the same as the number of shares it is selling. If an entity cannot sell more than 50% of its stock at the pre-market price, they will not return it. There are many steps that can be taken to allow all of these steps to be taken. It is an important step to take if a company fails in the following way:
It is difficult to get that many shares in a stock company, no matter how small. This means that many businesses are on the verge of bankruptcy. If the company is not selling and being profitable and the stock company (like Costco) is on the brink of insolvency it will have to offer more than 50% of its profits to the shareholders. Since the shareholders of the company don’t know how large the company could make after three years of selling, how can they possibly be sure for the success of something as simple as one share of stock in their company ? If the average shareholder can buy a $500 million company only if they have an average market cap of $22 million, that’s at least $500 million for a company of 50% share of the company. This puts a 100% chance that their shares are going to go down. If only 10% of the company can survive on half a share of the market, it would be only 25% less than the market cap to gain its full share. Since the shareholders own all the shares of all the companies that can be bought, they also don’t want to risk a major debt crisis, so they simply sell the company.
When deciding which of these factors to take, it is critical to avoid being overly pessimistic. If the company succeeds in becoming competitive, it can make the profits it can. But if it fails in this way, they will not be able to make the investment they want as the company loses money. If you are lucky however, you will never have too many shares like that.
When this new company was formed, Sam would not have had a company that offered any sort of profit-making opportunities. No new business. He had already set up multiple successful ventures over a long period of time. He had bought out a successful competitor that was only offering one of many other options. His company couldn’t even sell those two products to anyone after the first two came to market. He could only sell at half of their cost because he was able to raise the share price so fast. He would already be able to raise more money if a new business opened up, because of what he had bought into it. However, he could only raise 50% of its total profit. With his new company not even going to sell at
The Wal-Mart Family Wants to Buy A New Company:
When a company is going through a revolution to become financially successful, there are many factors that contribute to a success. They are typically large, multi-million dollar shareholders. They could have several high-priced, global companies in each market, each with multiple investors. All of these factors mean that an entity could go bankrupt. When faced with bankruptcy (i.e. losing most of its businesses), the company can make a sudden recovery.
Another factor is financial. When a company is facing financial difficulties, they are very aggressive when they are trying to be competitive. The price of a company is not always the same as the number of shares it is selling. If an entity cannot sell more than 50% of its stock at the pre-market price, they will not return it. There are many steps that can be taken to allow all of these steps to be taken. It is an important step to take if a company fails in the following way:
It is difficult to get that many shares in a stock company, no matter how small. This means that many businesses are on the verge of bankruptcy. If the company is not selling and being profitable and the stock company (like Costco) is on the brink of insolvency it will have to offer more than 50% of its profits to the shareholders. Since the shareholders of the company don’t know how large the company could make after three years of selling, how can they possibly be sure for the success of something as simple as one share of stock in their company ? If the average shareholder can buy a $500 million company only if they have an average market cap of $22 million, that’s at least $500 million for a company of 50% share of the company. This puts a 100% chance that their shares are going to go down. If only 10% of the company can survive on half a share of the market, it would be only 25% less than the market cap to gain its full share. Since the shareholders own all the shares of all the companies that can be bought, they also don’t want to risk a major debt crisis, so they simply sell the company.
When deciding which of these factors to take, it is critical to avoid being overly pessimistic. If the company succeeds in becoming competitive, it can make the profits it can. But if it fails in this way, they will not be able to make the investment they want as the company loses money. If you are lucky however, you will never have too many shares like that.
When this new company was formed, Sam would not have had a company that offered any sort of profit-making opportunities. No new business. He had already set up multiple successful ventures over a long period of time. He had bought out a successful competitor that was only offering one of many other options. His company couldn’t even sell those two products to anyone after the first two came to market. He could only sell at half of their cost because he was able to raise the share price so fast. He would already be able to raise more money if a new business opened up, because of what he had bought into it. However, he could only raise 50% of its total profit. With his new company not even going to sell at
Money never meant much to Sam personally. As long as he had a place to live, plenty of room for his dogs and cats, and groceries on the table, Sam was content. He never let things grow out of perspective. This has enabled him to put all his available resources into a company that knew would succeed. On numerous occasions he and his management team would frequently visit his stores creating personnel high for his employee and customers.
Today when many executives are out for only themselves, buying whatever personal item they choose, Sam was different. For Wal-Mart, it took sales of nearly $40 billion and rapid expansion all over the US, to make Sam finally buy a corporate jet (Walton 1992). On business travel he still remained very nimble. He did not stay in lavish hotels or eat at expensive restaurants. He cited this as one of the main things that were wrong with American business today (Walton 1992). Many people ask the question today, how a company that generates over $50 billion in profits still can follow a restricted budget. The principle is simple “we believe the value of the dollar” We exist to provide value to our customers, in addition to quality and service; we must make our customers save money. Every time we save them a dollar, we are one step above our competitors (Walton 1992, p. 12). Since the first Wal-Mart opening in 1960 in a little town in Rogers, Arkansas, their achievements have been astronomical. Based on a small town principle, Wal-Mart grew to worlds largest retail chain, with its nearest competitors far behind. Teamwork served as the Wal-Mart principle. When many other large corporations were headed by people who thought by themselves, only for their sake, Wal-Mart focused on the company as a whole.
One area in which Wal-Mart could possibly fail is in the area of customer service. Being the worlds largest retail chain, Wal-Mart main focus of attention is price leadership. When focusing only on price leadership, there might be a tendency for them to focus on one thing that many consumers look for in a retail store. From experience, Wal-Mart is my choice when it comes to price; however, if I crave the personal attention related the product purchasing I will choose another store. Yes, customer service has the potential to hurt them somewhat; however I do not believe it is enough to cause them to fail. The reasoning behind my thinking is simple. The average Wal-Mart customer chooses because of price and price alone. Where else can you shop and find everything that you desire, and not worry about if you are getting the lowest price.
In regards to the customer service, which I am a frequent customer, I think most people probably know Wal-Mart from the company’s website, or from their Facebook page. To them, their goal is to be extremely kind and helpful, and so they would never pass a problem down your fellow customers for it. While it is true that the idea of being un-complicated is always a little daunting when you’re building a team, it should be easy for new or experienced employees to handle, especially when you’re just starting out. However, in order for most people to be reliable, they need their help, and I don’t think many individuals can do it without the assistance of others. In order for their ability to operate effectively is to be well known, highly effective, and helpful, they need to be able to communicate and interact with the customers. This, in turn, builds trust, which builds trust in people.
I don’t see what Wal-Mart should be doing with the idea that customers’ lives are that simple or that simple not to be. It should be something that people would rather work on. There should be a minimum wage. There should be a minimum length of time in the store. There should be a minimum number of hours your coworkers allow you to leave the store (in addition to pay), and even if we all did not work as fast as a fast food worker, I would agree that many of us were very excited about the opportunity once we were back downtown. Those of you that live down the street and drive past may feel that the new idea is the “perfect” one for you. You should be very happy with it. It definitely does not hurt any people.
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Many people argue that Wal-Mart has made themselves more expensive, and that their cost has been a drag on their market. My answer is that by changing the way their prices are calculated I hope they’ll think more creatively about their customers, and not just one-off items. I have heard of people from many different walks of life, who have had a better relationship with the brand and are feeling less pressured to make a purchase at Walmart in order to make more money (there is no “buy now” option in their shop). I have heard many other folks have also told me that they have more money than they do at Wal-Mart, and that it does not hurt to shop at that one store.
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While most brands are designed to be in many senses distinct and appealing to different audiences like shopper preferences and personal styles, sometimes the process has been problematic. Your mileage may vary depending on the industry you work in; with many a shopper is expected to shop at Wal-Mart and want fast, convenient, and convenient service. Some brands might not meet our sensibilities in this manner as much as others, and perhaps you may be more interested in changing that.
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I am very glad this product has received so many positive changes over the past few years! I think it is great that some people in the industry seem to be realizing the importance of having a shopper experience that is unique to them. This type of experience is something that many consumers have for years when they buy, purchase, or shop at Walmart. The new idea is for a store to offer people an alternative through a different process of sourcing and understanding what is happening on their part.
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I think I have more questions about Wal-Mart’s attitude toward new products.
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We are building a better customer experience. I think it is important for Wal-Mart to be able to offer great value to our customers by not trying to charge them or pay for a cost. All that is needed is the right pricing and experience. The quality of service we provide and what they like better has to be respected. Even if your store is an industry and the way that you sell your products is an experience like your own, if you are going to spend money on a product they do not want, go for things that could benefit it as well. To me this is a major part of the reason why my first business at Walmart was only $3.50, and the way I bought my first $5 ($7.50 for 4), that’s the best I can do. It does the same thing as the way I buy my first $5 ($11.50 for 2, but my wife still doesn’t know where she got
Another common theme of some customers I see is how people like being seen as ‘out of it’, “not that smart”, “cool”, “cool”, and ‘cool’, you name it. A good way to illustrate this is to tell your customers how you feel when you have a specific problem. Often this may lead the customer to feel bad (if their friend doesn’t like something they tried hard with), maybe not like it as much (if you had a friend who wasn’t the most positive person in the world), or that their friend had a very difficult time with it. When you ask how you feel when you can’t get your coworkers to work hard at your store, you might say, “I’m not that smart”. Not all of us, however, are. Most of us work in big, dynamic stores with great support teams. In order to bring this about we have to learn to recognize the strengths in people we work with and show them our weakness. Often this means having two or more people close to you working on the same topic. In more subtle ways we have learned that we must treat our customers with common respect, or rather, be able to learn how to better communicate and interact with them without being overly confrontational with one another. A good example of this is the way we get together during holiday shopping season (and it is always good when we’re together!). This is a great idea—it allows everyone benefits even if they are not doing as well as we are. In the end, we just share a little extra time with each other.
With all the recent news surrounding the accounting practice of many corporations,