Walmart Target Merger

Competition is a constant challenge for Kohl’s especially when it comes to retaining customers and the market share. Kohl’s also has a weak global presence and the profitability was declined in

Due to the economy downturn period, Macy’s and many other retailers were suffering. Fortunately, Macy’s has chosen the beneficial marketing strategy to fit the objective of business. This paper will analyze the company’s situation from its financial aspect, industry aspect, the competitive part and Macy’s marketing strategies to conclude that Macy’s could have stable profit in the next three to five years.

In 2011, Walmart's inventory turnover was 11.62 and the industry average was 10.4(stock-analysis). It's fixed asset turnover was 3.88 and the industry average was 3.56, and it's total asset turnover was 2.34 and the industry average was 1.56(Stock-analysis). The values calculated for all three ratios mentioned all resulted in substantially different values in a positive way (Appendix B). Historically the values of each ratio have maintained relatively constant, which in this case is not a weakness. Asset management is a strength for Walmart, which ultimately means that they are maintaining their assets in the correct manner in order to have an efficient way of business.

Total asset turnover stayed relatively the same for Kohl’s from 2014 to 2015. Kohl’s is performing slightly better than the industry average, but not as well as Target. This ratio helps a company indicate how well they are using their assets to generate revenue.

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

In this segment, the retailer J.C. Penney will be analyzed against the department store retail industry, with particular emphasis placed upon their competitors, Macy’s and Kohl’s. The major components to be discussed will include the general external environment (i.e. demographics, economics, politics, legal requirements, technologies and global expansion), the industry environment, the competitive environment, the driving forces and the key factors for success within the industry. In terms of the general external environment, the retail industry is a multi-trillion dollar business in the United States alone and maintains operations primarily due to consumer spending. Such purchases rely upon the disposable income of

Macy’s Inc. has a very strong network all over in the United States under its two main brand names but the company has very weak geographic presence. All of its business functions are in the United States. Any changes in the economic, political, legal, and social framework of the country will have direct impact on the business operations of Macy’s Inc. and its profitability will suffer many folds.

With the exception of ROE, most financial ratios and even absolute values bear testimony to Wal-Mart’s recognition as the leader in the retailing industry. The reason behind Sears’s higher ROE can be explained by a comparison of the 3 ratios that constitute the ratio known as DuPont identity that is profit margin, asset turnover and equity multiplier. While both firms had similar profit margins, Wal-Mart’s asset turnover was 2.8 compared to Sears’ 1.1 due to the firm’s effective utilization of assets and lease agreements to facilitate revenue generation.

Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

Federated Department Stores made a decision in 2005 to reposition and consolidate 15 of its regional department store chains under just one national brand—Macy’s. This decision was in response to the decline in sales and profits that had hit the traditional department store industry, which was in a maturing stage and moving towards a downward trend for some time. Just three years later, in 2008, U.S. economy was hit with a recession that threatened the livelihood of many successful retail giants. While Macy’s did experience a significant drop in revenue in 2008 with a net loss of $4,803 million, compared to other department stores such as Mervyn’s that went bankrupt when the recession hit, Macy’s managed to stay in the game. Macy’s ability

In this paper I will discuss Macy’s Incorporated by analyzing their business level strategies to determine which I think is the most important to their long term success and if I think it is a good choice. I will analyze their corporate level strategies to determine which I think is the most important and whether or not I believe it is a good choice. I will analyze the competitive environment to determine the corporations’ most significant competitor and compare the two companies’ strategies at each level and evaluate which company I think is most likely to succeed in the long term. Once the

The firm’s accounts receivable ratio increased from 68.71 in 2006 to 74.56 in 2010. This means that it is taking Abbott almost six days longer to collect from its customers today than it did five years ago. Furthermore, the firm’s accounts payable days has decreased from 43.72 in 2006 to 38.22 in 2010. This means that Abbott is paying its suppliers 5½ days earlier today than it did in 2006. A change in the inventory ratio from 8.01 in 2006 to 11.03 in 2010 indicates that it is taking the firm longer to sell finished goods than it used to. The increase in the accounts receivable and inventory ratios, combined with a decrease in the accounts payable ratio, indicates poor working capital management and helps to explain why the firm has increased its holdings of cash and short-term investments. To correct this, Abbott’s managers should focus on collecting cash from its customers faster and delaying payments to its suppliers. To maximize its cash position, the firm would be best served by paying its suppliers in the same amount of time as it collects payment from its customers.

In order to measure how the performance of the Wal-Mart now and in the future, (Wal-Mart wants in low price and low cost) we need to analysis some financial ratio from the number on books.

The company’s creams inventory remains constant because it does not follow a trend in innovation and changes so often as the other products. The surplus in inventory is a big disadvantage since; last year’s products may not be in style this year in addition to the cost of storage. For all these reasons their cash flow is less in comparison with previous years causing that Luxor Cosmetics keeps increasing their bank loans, creating more debt, making it harder to pay out as 2011. In this particular situation the company could have either decrease its budgeted sales (productions) or increase its actual sales by improving more effective marketing strategy and research and development of its products in the markets. This way their inventory would decrease and their cash flow would increase. (Hopkins, 2009)