Case Study Essay Example | Topics and Well Written Essays - 1250 words - 4

eggshell Study - Essay ExampleStarting with the establishment of the offshoot store in 1962 in Rogers, Arkansas, surface-to-air missile Walton together with his brother had managed to grow the firm to 32 stores spread across four states by 1969, when Wal-Mart Stores, Inc was incorporated, and later on to 330 stores spread across 11 states by 1980, culminating in 1,402 Wal-Mart Stores and 123 Sams Wholesale Club outlets screening 29 states by Jan 1990 with Sales of over $25.8 billion. In fact, back in 1977, Forbes magazine had ranked Wal-Mart first in the discount retailing industry based on parameters such as return on equity, return on capital, sales growth, and earnings growth. To understand the reasons behind such phenomenal executing it leave be prudent to look at some financial performance parameters of Wal-Mart and its competitors, and then to look at how competitive forces act in this industry using Porters Five forces model.b) During the same period, the performance fig ures of other major competitors as given in Exhibit 5 of the case show that Sears and Kmart had save an average annual sales growth rate of just 7.8% and 7.9% respectively, while Target had recorded 12.9%. This indicates that Wal-Mart was bearing ahead of competition in sales growth.c) Wal-Mart also ensured that this sales growth was accompanied by nice returns to stockholders by maintaining the profitability despite such growth in sales. Thus net earnings increase from $0.55 billion in 1981 to $1.90 billion in 1990, with EPS growing from $0.11 million to $1.90 milliond) On this count once again Wal-Mart was way above competitors clocking an average growth rate of 30.3% on Return on justice (ROE), and 32.9% on EPS as against Sears (11.1% 8.0%), Kmart (13.5% 12.6%), and Target (15.2% 14%).e) Wal-Mart had also managed its working capital very well with a current ratio ranging from a low of 1.66 to a high of 2.07 during this decade, primarily through excellent focus of inventorie s, achieving an