Integrative Case 1.1 on Walmart

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Integrative Case 1.1 on WalmartIndustry & Strategy Analysis a. Apply Porters 5 forces framework to the retail industry Supplier Power – Medium to low, Walmart purchases huge amount of products fr... om their suppliers Threat of Entry – Medium to High, high capital requirements, precise distribution system Existing Rivalry – High, target, Kmart, Walmart is the biggest but also because of its presence in other countries. Threat of Substitutes – High, there are tons of substitutes for the products that Walmart sell, and other stores have been able to create competition Buyer Power – Low, customer is already receiving a price that is considered low b. How would you characterize the strategy of Walmart? How does Walmart create value for its customers? What critical risk and success factors must Walmart manage Their strategy consists of wanting to make peoples lives better by helping us save money. It creates value for its customers by minimizing price of items by placing large orders that reduce the price per product. They have a high risk of replacement, but also already has a high successful factor by being known to have the best prices. Balance Sheet c. Describe how ‘‘cash’’ differs from ‘‘cash equivalents.’’ I. Cash is literal money in a physical form, cash equivalents can be tbills, commercial paper, or anything that is highly liquid and can be easily converted to cash. d. What are Walmart’s two largest assets on the balance sheet (in dollar amounts)? How do these assets reflect Walmart’s strategy? II. Inventory – 44,853, well Walmart has to have huge inventories that they purchase form the suppliers because there entire business is basically that. III. Property Plant & Equipment – 178,678, Walmart has hundreds of locations and this also reflects on their strategy by making their products accessible to hundreds of thousands of people. e. Walmart reports accounts receivable net of an allowance for uncollectible accounts. Why? Identify the events or transactions that cause accounts receivable to increase and decrease. Also identify the events or transactions that cause the allowance account to increase and decrease. Net against it because it is a better representation of A/R in terms of subtracting what they likely will not collect [Show More]

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