Wal Mart s Competitive Advantage Essay Example for Free

Wal Mart s Competitive Advantage Essay Wal-Mart, likely the nation’s most popular discounter, entered the market at the right time, when the barriers to entry were low. Benefiting from first mover advantage, Wal-Mart moved into markets that were not already served by competitors and was able to set higher prices in these areas (6). Conversely, to compensate for low margins in areas heavily congested with competition, it cut costs (1). With an aim to offer low prices, the Company soon learned that it needed to trim its expenses and establish itself as a lean organization, eventually leading to profitability and strong competitive advantage. Refer to Exhibit 1 for Wal-Mart’s successful performance, compared to the rest of the industry, as well as the sections below for an explanation by expense item. Cost of Goods Sold Inventory logistics were positive. Turnover exceeded 4.5 in the mid-1980s, well above that of competitors and trucks were 60% full on backhauls (4). In addition, getting in the forefront of technology allowed for lower overhead costs. The use of UPC scanning increased: from 25 stores in 1983 to 91 stores in 1984 and 235 stores in 1985 (5). Even though the Company catered to a vast market, offering 36 merchandise departments across 70,000 SKUs, it was able to remain highly organized with a computerized system to track inventory, which set itself apart from its peers, as well as a central computer at headquarters, which was updated on a weekly basis (5), the accuracy of which led to efficiencies. The Company shopped around with its vendors, using around 3,000 of them, taking â€Å"no more than a fifth of its volume from any one vendor† (3). In 1984, the cost of inbound logistics was 50% that of the industry at 2.8% of sales (4). Still, Wal-Mart’s cost of goods sold was almost 2% higher than the industry average of 71.9%. Given the lack of distributors who would be able to offer competitive pricing, Wal-Mart built its own warehouse in 1970. By the mid-1980s, Wal-Mart’s five distribution centers served the rapidly expanding number of stores – over 850 stores, meanwhile racking on steep upfront expenditures. Operating Expenses Payroll Expense The Company was able to minimize employee costs by paying low wages (7), meanwhile keeping employees happy, in hopes of avoiding turnover costs. In 1984, Wal-Mart’s salary expense was approximately 1% lower than that of the industry. Unlike its competitors, the Company’s 12 regional VPs all lived in surrounding areas, enabling intimate visibility over a relatively smaller geographic network, which ultimately saved the Company about 2% of sales by not having to set up regional offices. However, contrary to intuition, this decrease in expenses did not adversely impact anyone at the Company. Instead, the offsetting increase in costs resulted in a company-wide benefit as Wal-Mart offered profit sharing, employee stock purchase plans, bonuses, and rewards for low shrinkage. With its â€Å"people-focused† initiatives, Wal-Mart was able to use intrinsic and extrinsic motivation to show employees how much they were appreciated. There was a huge emphasis on communication as management strived to be as transparent as possible with lower level staff. For example, executives came into the office for meetings on Saturdays, then disseminated the latest updates downward, starting with the regional managers, district managers, store managers, and so forth. With its personable CEO, who â€Å"kept a pledge to put on a grass skirt and dance hula on Wall Street to celebrate the achievement,† Wal-Mart was able to distinguish itself and was named one of the 100 best companies to work for in the United States (7-8). Advertising Expense Refer to Exhibit 1 for a high level summary, as well as Exhibit 2 for a more detailed breakdown, of the Company’s advertising expense compared to the higher industry average. Marketers placed a heavy emphasis on low prices with tag lines such as â€Å"we sell for less† (5) or â€Å"everyday low prices† (6). As expected, the cost of advertising was directly correlated with the launch of new stores (6), as well as the location of those stores (i.e. cosmopolitan areas would be more costly): after entering a new area and establishing itself, Wal-Mart would then scale back advertising in that area. Branded merchandise, which made up the bulk of the inventory, was mostly nationally advertised (5), thus quickly building brand awareness among consumers. Rental Expense Rental expense at Wal-Mart was 0.3% lower than that of the industry. A large part of this was attributable to the fact that Wal-Mart did not permanently lock itself down to a certain location; of the 859 stores in the mid-1980s, 812 were leased. With the flexibility to move during flourishing times, the size of an average Wal-Mart store went from 42,000 square feet in 1975 to 57,000+ square feet in 1985 (3). In addition, the Company made a smart decision to stay out of locations that could not be expanded, again showing the Company’s long-term, instead of short-term, mindset. Counter-Intuitive Comparisons After further analysis of Wal-Mart’s costs in 1984, we encountered findings in the data that was counter-intuitive to the costs that we would expect to see from the most successful discount retailer of its time. Naturally, the area in which we would expect Wal-Mart to exhibit higher than average cost savings compared to the industry average would be in Cost of Goods Sold. However in 1984, Wal-Mart’s COGS at 73.8% was almost 2% higher than the industry average. As mentioned above, Wal-Mart’s system contained over 70,000 SKUs, a number larger than most other discount retailers which would lead one to believe that a high volume discounter like Wal-Mart would achieve economies of scale to produce a COGS lower than the industry average. Next, due to Wal-Mart’s efficient distribution network, inventory did not back up in storage as quickly as other retailers. Wal-Mart boasted inventory turn 4.5 times in the mid-1980s, which was higher than the industry average. With reduced inventory levels due to the speed at which Wal-Mart was selling its inventory, this would lead one to believe that there would be a smaller amount of ending inventory to subtract from beginning and purchased inventory. Expansion â€Å"Being the first warehouse club to solicit and introduce the concept in a market can be a major competitive advantage† (9). As a result of the distinctive features mentioned above, Wal-Mart was able to set itself apart from its peers and rise to the top of the industry. In 1984, it started to diversify by starting three new ventures, the most notable of which was  Sam’s, a warehouse club. The Company expanded from three stores in 1983 to 11 stores in 1984 and 23 stores in 1985. It took what it learned from the Wal-Mart venture and applied it to Sam’s accordingly. Conclusion Over the years, Wal-Mart’s success grew and it distinguished itself from its competitors, thus enabling the Company to expand its operations and diversify into the warehouse club market with the now-renown Sam’s Club. David Glass (later Wal-Mart’s president and chief operating officer) summarized the Company’s history best when he said: â€Å" ‘We are always pushing from the inside out. We never jump and then backfill.’ † (3) Instead of becoming greedy and aggressively dominating the market, the Company did so steadily over time; by not taking on more than it could handle, the Company was able to strategically position itself. In the years to follow, Wal-Mart’s market value was twice that of its competitor, K mart, even though it was a third as large.

Analysis of The World Bank Group Essay -- Business Management Banking

Analysis of The World Bank Group   Ã‚  Ã‚  Ã‚  Ã‚  Over the past generation, more progress has been made in reducing poverty and raising living standards than during any other period in history. In developing countries, life expectances have increased from 55 to 64 years, Income per person has doubled and Infant Mortality has been reduced by 50 percent.   Ã‚  Ã‚  Ã‚  Ã‚  Despite the successes, massive development challenges remain. Three billion people live on less than 2 dollars a day and 1.3 billion live on less than one dollar a day. Over 40,000 people die each day from preventable disease. 130 million never have the opportunity to go to school and 1.3 billion do not have clean drinking water. By allowing poverty to increase in developing countries this can adversely affect wealthier nations as markets and investments opportunities shrink, the environment is damaged and people migrate in search of work and income.   Ã‚  Ã‚  Ã‚  Ã‚  The World Bank is helping countries to strengthen and sustain the fundamental conditions they need to attract and retain private investment. With World Bank support financial and nonfinancial governments are reforming their overall economies and strengthening banking systems. They are investing in human resources, infrastructure, and environment protection which enhances the attractiveness and productivity of private investment. The World Bank Group The World Bank Group comprises five organizations: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID). The term World Bank refers to only IBRD and IDA.The World Bank is the largest provider of development assistance to developing countries and countries in transition, committing about $20 billion in new loans each year. Its main focus is to help people in developing countries raise their standards of living through finance for agriculture, schools, health programs, transportation and other essential needs. The International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) are the private sector affiliates of the World Bank Group. IFC supports private enterprise in the developing world through loan and equity financing. MIGA facilit... ...levant to its objectives and sponsors a number of publications. These include multi-volume collections of Investment Laws and of Investment Treaties, which are periodically updated by ICSID staff. Since April 1986, the Centre has published a semi-annual law journal entitled ICSID Review--Foreign Investment Law Journal. A New Bank for 2000 As we move into the new millennium, the Bank has embarked on a strategic compact with its clients and shareholders to improve the quality of its assistance, by:  · Helping the poorest countries reduce their debt burden so they can fund development initiatives instead of interest payments  · Helping fight corruption that undermines economic growth  · Helping developing countries to adopt modern communication technologies and skills so they can be more competitive  · Strengthening and reforming banking systems and financial sectors that would help avoid future crises such as those in Mexico in 1994-95 and East Asia in 1997-98  · Meeting the future food needs of a growing population and paying more attention to agricultural and rural development  · Ensuring development is consistent with the social and cultural needs of beneficiaries

For the Benefit of the Child Essay

Jonathan Swift’s â€Å"A Modest Proposal† – applied to modern times – is focused on the idea that distribution of wealth is necessary for the future of the child living on welfare. But, what if there is very little or no money available to the child (through the government) to pursue his or her studies? The poor child, if he or she goes to school, would lag in the classroom for the reason that his or her parents cannot spend sufficient time to teach him after school. Children are applied to menial jobs, too, especially in the developing world. The developed world has had its indecent share of child labor in the past. When Swift’s â€Å"A Modest Proposal† was first published, there were far too many problems facing the child in the now-developed world. Although many of those problems were resolved as education yielded dividends in the now-civilized world – there are problems facing the poor child still. These problems are not limited by space and time. It is therefore essential to consider the problematic issues facing the poor child in the modern world. This exercise is meant to increase our timeless appreciation of â€Å"A Modest Proposal. † After all, poor children around the world continue to face the troubles confronted by the poor child of Swift’s time. George Orwell was correct when he wrote that â€Å"All animals are created equal but some animals are more equal than others,† actually referring to human beings whom scientists refer to as animals (5). Throughout the history of humanity, people have generally known that they were created equal. And yet, there have been separations, discriminations, dissimilarities, and inequalities, for the reason that God, Nature or Evolution – depending on what we choose to believe in – did not grant equal abilities, talents, and gifts to all human beings. Some men are richer and more intelligent than the others. Some are born deaf, dumb, and blind. And, some must rely on income support because they just cannot beat poverty on their own. But, what if income support is insufficient to meet the child’s intellectual needs? What if he or she is potentially brilliant but cannot do so well in the classroom because his parents cannot buy him books to read in the home? According to the United States Bureau of Census, the most recent poverty rates of children are higher than ever. A large percentage of children in the classroom are coming from low socioeconomic households. And, a huge amount of research has shown that a child’s socioeconomic status affects his or her intelligence level as well as academic achievement (Milne and Plourde). Vail writes that children from high poverty environments â€Å"enter school less ready to learn, and they lag behind their more-affluent classmates in their ability to use language to solve problems (12). † What is more, children’s socioeconomic status has been found to affect their consistency of attending academic institutions, in addition to the number of formal education years they eventually complete. Many researchers believe that there is a positive correlation between socioeconomic status and academic achievement. Still, Caldwell and Ginther have reported that â€Å"[w]hile low-SES is highly correlated with low achievement, some low-SES students are academically successful (142). † Then again, the words ‘vicious cycle’ are often used when poverty is discussed. In a groundbreaking ethnographic study, Milne and Plourde discovered that children from low socioeconomic households who do well at school have parents who make sure that their children have educational materials available at home. All low socioeconomic families with children who are high achievers at school have books and writing materials for their children at home, even if these families have to rely on support systems to supply them with educational materials. What is more, these families have time allotted every day for their children to engage in academic activities, including homework, with their parents’ participation. These families also believe in monitoring the use of television by their children (Milne and Plourde). All of the mothers in this study had at least completed tenth grade in school, and expressed that they would like their children to know the importance of education too. The parents of these children openly talked about the importance of education with their children. Finally, they all agreed that they did not want their children to believe that schooling was an option. Rather, education was considered a necessity in these homes (Milne and Plourde). All the same, such families are few indeed. Not all poor children have mothers that show interest in education. Similarly, a poor child’s needs may be disregarded completely if his or her parents are alcoholics that use up all income support on liquor. After all, there are frustrations in the poor child’s home, and these may take the form of drug abuse or domestic violence. If not, a poor child’s parents may send him off to work. Swift’s scenario for the poor child may take another shape in India, for example. In that part of the developing world, poverty is intense, with 41 percent of the world’s poor. So therefore parents encourage their children to work instead of going to school. The policy of the Indian government on child labor has evolved over many years. The country did not find it possible to ban all forms of child labor at once, seeing that working children contribute greatly to household income. Besides, the country finds that children contribute to economic growth, being the cheapest labor force (Krueger and Tjornhom). As mentioned previously, child labor laws took time to develop in the now-developed countries, too. Children were recognized as economic assets before regulations stepped in to either stop the employment of children altogether or vastly reduce their representation in the labor force. As an example, Bradbury, in her book, Working Families: Age, Gender and Daily Survival in Industrializing Montreal, takes the reader down Montreal’s streets and into the dwellings of working class families who helped shape Canada’s industrial revolution. The lives of working men, women, and children have all been documented (Bradbury). If Swift’s child enters their lives, he or she would be a welcome part of the working family described by Bradbury. Likewise, McIntosh, working at the National Archives of Canada, has produced a well-documented book on child labor during the 19th and early 20th centuries: Boys in the Pits: Child Labour in Coal Mines. The book is an exploration of the history of boys between the ages of 8 and 15 who labored hard in the mines and were known only for their work. Such children may also join Swift’s circle of little friends in â€Å"A Modest Proposal. † The fact remains that children continue to be disproportionately hurt by poverty in our time – of sports cars, rockets, and lots more. If properly trained, many of the same children may add great value to our world. But, there are problems such as poverty and illiteracy that refuse to go away. No matter how one tries to attack poverty, it takes a U-turn to complete its cycle after cycle. Swift’s â€Å"A Modest Proposal† takes such a dismal view of poverty with an electrifying hope, which the author displayed through satire. On a similar note, it is possible to suppose that the vicious cycle of poverty would break once and for all, at some point in time, for all poor children of the world. Regardless of our beliefs about the reasons for poverty, the government has shouldered the responsibility to care for the poor by spending a part of its spending budget on income support programs such as social insurance, public assistance, and work/employment programs. In order to raise the standard of living of the poor, the government also considers education as an essential social welfare program. Still, there are poor children with parents that refuse to buy them books and other educational materials for use at home, even though the government is providing them with income support. What should the government do in order to break this cycle of illiteracy and poverty combined? – Perhaps a paradigm shift is in order. To provide for and educate every child, it is the government’s responsibility to educate every parent. Perhaps it would take the advertising industry to work alongside the government to boost sales of books instead of booze. For the benefit of the poor child, many changes are called for. Works Cited Bradbury, Bettina. Working Families: Age, Gender and Daily Survival in Industrializing Montreal. Toronto: University of Toronto Press, 2007. Caldwell, G. P. , and Ginther, D. W. â€Å"Differences in learning styles of low socioeconomic status for low and high achievers. † Education (1996), 117, pp. 141-148. Krueger, Dirk, and Tjornhom, Jessica. â€Å"Economic Inequality and the Emergence of Child Labor Laws. † Discussion Paper. Stanford Institute for Economic Policy Research (Aug 2002). 11 Nov 2008. . McIntosh, Robert. Boys in the Pits: Child Labour in Coal Mines. Montreal, Quebec: McGill- Queen’s University Press, 2000. Milne, Allison, & Plourde, Lee A. â€Å"Factors of a Low-SES Household: What Aids Academic Achievement? † Journal of Instructional Psychology (Sep 2006). Orwell, G. Animal Farm. London: Secker and Warburg, 1945. Vail, K. â€Å"Grasping what kids need to raise performance. † The Education Digest (2004), 69, pp. 12-25.

Betrayal Of William Shakespeare s Macbeth - 1382 Words

Betrayal in Macbeth The presence of loyalty in the beginning is what creates a room for betrayal at some point in life. Issues of betrayal are a daily occurrence, each driven by issues and cases based on loyalty. Betrayal and loyalty both play the head and tail sides of the coin as they go along but produce conflicting forces. In order for one to betray, they would have weighed who they will be loyal to and they is always a presence of ambition during the course. Betrayal is an issue that has been there for centuries as William Shakespeare clearly labelled the theme in his play Macbeth. In the quest of fulfilling his own ambitions driven by a number of forces, Macbeth stands as the lead character in betraying people around him. What the play reveals is that betrayal occurs around close people and it is also cultivated by close to the one betrayed. Despite Macbeth being the main culprit when it came to betraying others in the play, the trend of betrayal does not start with him as characters like Thane of Cawdor are seen to clearly exploit and betray Duncan. This initial act of betrayal results in Thane of Cawdor being stripped off from his title with Macbeth being the successor. The king rewards Macbeth with the title of lordship in acknowledgement of his loyalty, something that will soon turn to be the opposite. In the play, betrayal shows a great influence in the changes of power. What Shakespeare shows in this first act of betrayal is that it all begins with loyalty,Show MoreRelatedAnalysis Of Wuthering Heights 1398 Words   |  6 PagesThe betrayal in this book come when Heathcliff feels that Catherine betrayed herself by not pursuing his love. Hindle also showed jealousy towards heathcliff. In the play Macbeth written by William Shakespeare, Lady Macbeth is the most famous woman character. 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