April 6, 2011
Week 2: Financial Outcomes Paper - Wal-Mart
Wal-Mart, a fortune 500 company, has thousands of stores in many countries around the world. Michael T. Duke, President and Chief Executive Officer of Wal-Mart Stores, Inc. expresses one financial priority of Wal-Mart as growth. Growth: We will continue to grow around the world. We have many opportunities to grow by opening new stores, entering new markets, making acquisitions, integrating online channels, and developing new, innovative formats to allow people to experience the Walmart brands (Wal-Mart, 2010).
Herein, Wal-Mart’s growth initiative, three potential financial outcomes, including decreased sales, increased sales, and no change in sales, and an evaluation of the most likely outcome will be discussed. Financial Outcome: Decrease in Sales
Wal-Mart’s growth initiative is spawned by the company’s potential in untapped markets. On January 31, 2010, Wal-Mart had 4,300 stores in the United States alone (Wal-Mart, 2010). According to Wal-Mart (2010), “the company [has grown] more than 8,400 stores in 15 countries around the world” (2010). This feat has been done through an aggressive approach to new market entry. However, organizations around the world are committed to keeping the retail giant from entering new markets. Portland, Oregon is known for its stance on Wal-Mart as the city has fought to keep the retailer from building additional stores. Currently, Wal-Mart has one store within the Portland’s city limits, and plans to build a second store have been turned down repeatedly. The mayor of Portland, Sam Adams, is recorded as saying, “this is a company that has my enmity. They treat their employees poorly and the communities they go into with total disdain" (Frank, 2009). Wal-Mart’s growth depends on its acceptance within the communities it enters; therefore, Wal-Mart’s initiative to continue...