wth the rise of technology and online ordering it has been known that companies are changing their ways of online ordering. Many companies are providing individuals to order online and pickup their merchandise the same day. For instance, Walmart is even doing grocery online ordering. This is allowing individuals to not have to challenge others in long lines or even in the grocery store all together. Walmart is increasing their line of stores from superstores to neighborhood stores. This allows individuals to just get in and out of the neighborhood stores rather quickly. The neighborhood stores are less square footage than the superstores and only sell specific items.
The unique attributes of this is that it not only saves the individuals time from having to grocery shop it allows Walmart the chance to have their employees shop for others. This improves the service that Walmart is entailing to their customers as well as training opportunities for their employees. Other attributes are that it offers a pilot program to their customers for prescriptions that other companies do not.
Several factors that make Walmart unique comparatively to its competitors include: pickup from online ordering, competitive pricing, broad spectrum of products available online, and a committed customer service team. Walmart has a business driven and focused company that offers educational aspects to their employees. Walmart provide a unique supply chain capability to lower costs and build deep digital relationships with customers. They have strengths and assets to build on and making progress to position the company for the future.
Hitchner (2017) states, “an analysis of the risks of the subject asset will help identify where along that spectrum is the subject company’s required return (p.187).” In addition, the risks that Walmart most recently has seen is in their annual report on Form 10-K. It was filed with the SEC and the results differed in projections, estimates and expectations. They considered the forward-looking statements in their release of the annual Form 10-K. Walmart urges other companies to consider all the risks, uncertainties and factors identified in the forward-looking statement. Hitchner (2017) states, “forward-looking statements are historical data vary depending on the period over which the premiums are calculated, the risk-free rates that are used, and whether a geometric or arithmetic average is used (p.205).”
In other words, risks can be detrimental for any business. However, Walmart has invested in people and technology and it has been driven strong with shareholder returns over time. Walmart has seen economic factors in which currency exchange rate fluctuations and changes in market interest rates are, consumer confidence, disposable income, debt levels, spending levels, and demand for certain merchandise. Their balance sheet remains strong and have said that they would only use it for strategic purposes. Walmart is more of a low risk and high financial strength business. It provides an expectation of inline performance over many years to come.
I believe Walmart will continue to grow and have very low risk, however, as we all know all businesses will encounter risk here and there. However, Walmart is positive that they will continue to increase in sales and make customer service their priority.
Hitchner, J. (2017). Financial valuation: Applications and models (4th ed.). Hoboken, NJ: Wiley.