Wal Mart : The Biggest Retailer Of The World With A Revenue Greater Than $ 485 Billion

1901 WordsDec 3, 20158 Pages
STRENGTHS : ● Wal-Mart is the largest retailer in the world with a revenue greater than $ 485 billion and a network of over 11000 stores spread out across 27 countries. As of January 2015, Wal-Mart served around 260 million customers weekly through its over 11,000 stores under 72 banners in 27 countries and e-commerce websites in 11 countries. ● The size gives it power over its suppliers as well as a strong market position. Due to its vast operations , Wal-Mart enjoys economies of scale and thus has kept a steady gross margin for the past 5 years between 24% and 25%. Similarly, Operating margin has been maintained at 5.9% on average which shows its control over costs. ● Wal-Mart, has a high Inventory turnover. For the fiscal year ended 31st January 2015, the inventory turnover was 8.05 which shows the number of times the company 's inventory was sold and replaced. Its inventory turnover ratio was higher than one of its key competitors, Target reported inventory turnover of 5.8 times in FY2015. ● The company maintains a Days Sales Outstanding ratio of 45 days i.e. the number of days it takes to sell its inventory. Thus an rising inventory turnover ratio as compared to previous fiscal years and a lower Days inventory turnover ratio suggest that the company experiences low inventory carrying costs which translate into better operational margins.. ● Wal-Mart has built strong a cost reducing strategy based on a technologically advanced information system that supports its

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