Essay - Wal-mart Analysis Industry Information in Completing an Analysis of the...

Wal-Mart Analysis

Industry Information

In completing an analysis of the Big Box Retailing industry of which Wal-Mart is the most dominant participate, the key factors of the industry's growth potential, industry profitability, degrees of r*****k in the ***** future, and how this *****dustry is confronting the current economic challenges in the retailing environment. As an industry, Big Box Retailing ***** considered to be in the mature phase ***** its product lifecycle (Sampson, 2008). Many research firms ***** the Department of Commerce consider ***** Big Box Retail*****g industry one ***** three industries that comprise the U.S. General Merchandise S*****res Sector. According to industry analysts real sector revenue increased 14.1% over ***** last five years. Of the three industries that comprise ***** sector, the ***** Box Retailing industry generated ***** majority of growth, average a Compound Annual Growth Rate (CAGR) of 5.8% during this time period (Sampson, 2008).

Key factors relating to this industry are analyzed in this *****.

***** ***** Retailing Growth Potential

***** the three industries ***** comprise the U.S. ***** Merchandise S*****res Sector, only Big Box ***** shows growth between 2008 and 2013 according to ***** research services including IBIS World (Sampson, *****). Industry analysts predict that Big Box Retailing will grow 3.6% per year from 2008 - ***** (French, 2007). The growth of Big Box Retailing is seen as countercyclical ***** fuel pricing and the uncertainty consumer's sense about gas prices, the economic and their jobs. Growth of ***** sector overall ***** Wal-Mart specifically is being driven by the reliance on these stores by middle-class consumers who live paycheck to paycheck and look to Wal-Mart to assist them in keeping their budget balanced (Birchall, 2008).

Industry Profitability

***** Box Retailing ***** support the ***** ***** profit ***** of U.S. General ***** Stores ***** during the 2008 - 2013 timeframe due to the operations efficiencies Wal-Mart and its competitors are investing in. Foremost ***** these operational efficiencies are the increasing ***** on ERP systems, distributed order management and the adoption of RFID throughout *****ir supply chains (Boarnet, Crane, Chatman, Manville, 2005). With revenues growing at 3.6% through 2013 and expenses staying flat even with operational performance gains, the challenge of attaining industry ***** and generating Return on Assets of 8% and a c*****sistent $180,000 Sales Per Employee achieved on a c*****sistent basis. Pr*****itability long-term in the Big Box ***** industry is more reliant on operating efficiencies than top-line r*****ue growth.

Degrees of R*****k

There are very large risks associated with the Big Box Retailing industry as it is heavily dependent on supply chains (Boarnet, Crane, *****, Manville, *****) and inventory turns to be successful (French, *****). The risks of supply chain disruptions and the lack ***** consistent qual*****y from suppliers could significantly change the *****ability of this industry rapidly.

Overcoming Industry Challenges

***** ***** Retailers in general ***** Wal-Mart specifically have redefined retailing to concentrate on a low-price value proposition that is supported by exceptionally high levels of operating efficiency. For the Big Box Retailing industry to overcome the