Walmart Valuation Analysis

Essay by PaperNerd ContributorUniversity, Master's February 2002

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Company Description Wal-Mart Stores, Inc. is the #1 retailer that operates discount stores offering a wide variety of merchandise including apparel, domestics, hardware, electronics, home furnishings, and health and beauty aids. The Company's Superstores offer all the same merchandise as Wal-Mart discount as well as grocery items. The Company also operates over 400 Sam's Club Stores (warehouse membership clubs). The Company operates internationally with subsidiaries in Argentina, Germany, Mexico, Canada, and Puerto Rico, joint ventures in China, and majority-owned subsidiaries in Brazil. The chain's hometown identity makes it extremely popular among customers, but it is best known for its breath of merchandise and everyday low prices. It sells popular and trusted brand names including Proctor & Gamble, Black & Decker, and Mattel. Wal-Mart culture is dominated by three main guiding principles including Everyday Low Prices (EDLP), consistently well-stocked shelves, and friendly associates. Wal-Mart is able to offer EDLP to its customers by (1) giving its associates the power to make suggestions to reduce cost, (2) working together closely with its vendors, and (3) using advanced technology such as just-in-time management systems to help reduce inventory costs.

Competitors Target: Target is a general merchandise retail that sells clothing, food, home furnishings, health and beauty aids, small appliances. It operates more than 850 stores in 41 states. Target is under the umbrella company that also owns Mervyns, Marshall Field's and Hudson.

Kmart: The Kmart Corporation is a discount general merchandiser. It has over 2,100 discount stores in each of the 50 states, Puerto Rico, the U.S. Virgin Islands and Guam. Kmart offers products ranging from clothing, houseware, and Penski auto service centers. It has converted some of its traditional stores to Big Kmarts that offer grocery items, and Super Kmart Centers, which contain a wider selection of groceries than Big Kmart and...