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hamad - Wal-Mart primarily competes in a domestic and an...

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Wal-Mart primarily competes in a domestic and an international market (Argentina, Brazil, Canada, China, Japan, Mexico, Puerto Rico, United Kingdom). In this capacity Wal-Mart provides goods and services using a low cost and delivery method that provides an edge over other retailers. There is an IT infrastructure in place which leads to inbound and outbound logistics and distribution efficiencies that reduce dependency on supplier’s inefficiencies. The focus of this study will review the stock valuation of a historical time frame and will use calculations to express validity to the claim of the stock being stable between different time frames. THE COMPANY The Wal-Mart department store chain, which employs 2.1 million people at 4,700 stores worldwide and in 2002, became the largest corporation in the world. Wal-Mart has taken a dominant or near-dominant position in key sectors of the retail market: 19% of all grocery-store food in the United States, command of 35% of the market, 16% of all pharmacy-drug sales in the United States, controls 30% of the U.S. household staples market, controls 30% of the U.S. household staples market, and 15% of all single-copy news publications. Wal-Mart also controls a large and increasing share of the business done by almost every major consumer-products company: 28.3% of Dial's (soap products); 24% of Del Monte Foods'; 23% of Clorox's (bleaches and cleaners); and 23% of Revlon's (cosmetics). It controls one-fifth or more of the business done by Proctor & Gamble (household products and soaps); Levi Strauss (jeans and clothing); and Newell Rubbermaid (household consumer rubber products). That is, Wal-Mart is these firms’ entire biggest outlet, by a wide margin. (Freeman, Tinknor, 2003) Wal-Mart's annual sales quadrupled from $55.5 billion in its Fiscal Year 1993, to $244.5 billion in FY 2003 (which ended Jan. 1, 2003). (Freeman, Tinknor, 2003) The business model includes: marketing to a broad "family" demographic that includes rural as well as urban, ethnic minorities as well as mainstream, people without a higher level education, lower- or working-class consumers, as well as the middle-class; one-stop shopping based
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on a very large selection of goods and services; the use of intense price competition and high-technology inventory management to stimulate and satisfy end-user demand; extreme economies of scale based on big-box delivery of consumables; aggressive supply-chain management that requires producers to reduce their costs significantly to find an outlet for their goods; employment of store workers for low wages, few benefits, and little job security to reduce overhead (Prashad, Sridhar 2007). Wal-Mart now operates retail stores around the globe in three different facets as Wal- Mart Stores, Sam's Club, and International. Product lines include: general merchandise, apparel, toys, domestics, grocery, fabrics & notions, stationery & books, cellular phones & service plan contracts, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture & accessories, sporting goods, pet food & pet accessories, and financial services & products.
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