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Wal-Mart’s Potential for Investment and Profitability

Criteria

The main purpose of this project is to analyze and identify Wal-Mart’s potential for investment and profitability. It has to be noted that when all other businesses were reeling under the weight of recession, it was, in reality, Wal-Mart, which could withstand economic fluctuations and emerge as a leader in all aspects of world trade. Well, here is how Wal-Mark managed to withstand stiff competition and make its mark in the Fortune 500 companies.

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The Investment Plan

Wal-Mart offered to sell its products at a lower price to make a mark in the organic goods market. In this way, it managed to beat the organic food competitors, who were offering their goods at a higher price. Likewise, it opened its doors to China and India. Through its Direct Stock Purchase Plan and the Traditional Stock Broker route, Wal-Mart has managed to rake in the cream of top investors from across the globe. The EIG and its investors earn a sizable income through the investments in Wal-Mart stores and this, in turn, allows the company’s finances to stabilize in the longer run. It is through its efficient investment technique that the company manages to retain its position at the top rung of the Fortune 500 companies.

The Foreign Expansion

The second most important criterion for Wal-Mart to remain on top of the food chain was by stabilizing its image in the overseas market. In simple words, Wal-Mart has agreed to expand its business to various Asian as well as South American countries. To cite an example, Wal-Mart spent $385 million to open 28 stores in Brazil.

The Approach

Wal-Mart’s approach is very systematic. The budget justification is done based on direct costs, stock prices, broker fees, focus fees, branch office processing fees, indirect costs, consultation costs, and the employees’ salaries.

Conclusion

Wal-Mart’s policy of investment, expansion into foreign shores, positive approach, and fierce marketing strategies, and the uncanny ability to overachieve its goals, have allowed the retail giant to maintain its position as the top contender for the Fortune 500 race.

The Technical Background of Wal-Mart

Wal-Mart has emerged victorious in the ongoing recession. Not only has it raised substantial capital for EIG, but it has also succeeded in retaining its stable image by sustaining a sizable return on investment for its investors by following these simple ground rules to success.

Budget Justification

To grow, Wal-Mart needed a suitable budget. In order to establish a company-friendly budget, it had to keep a close tab on the direct costs. This in turn had to be done by keeping the costs involved in the purchase of stock well under control. Likewise, the stock prices, through the means of the 8-week investment plan, allowed Wal-Mart to achieve large-scale success in the New York Stock Exchange.

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The Broker/Focus Fee

The Broker Fee, in accordance with the 8-week plan, was pegged at $6.25. With just 40 transactions in that period, the total broker-free was kept well under the $2000 mark. Likewise, the focus fee, a necessity for ascertaining the profits and shares in the New York Stock Exchange were kept at par with the Broker Fee.

The Floor Regulatory/Branch Office processing Fee

Wal-Mart shelled out an annual fee of $80 in favor of the New York Stock Exchange in the form of an annual Floor Regulatory Fee. For all the transactions which involved an online or a telephonic method, Wal-Mart agreed to pay a fee of $4.40per transaction.

Consultation Costs/Employees Salaries

Last but not the least, Wal-Mart hired freelancers on a commission basis. The retail giant did so to extract the latest information regarding the current market trends. Likewise, employees were asked to accept a non-standard salary proposal, which in turn helped improve the overall employee satisfaction scores.

Conclusion

Owing to the above-mentioned steps, Wal-Mart was not only able to sail through the economic recession with grace, but it also managed to retain its top slot in the Fortune500 run.

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StudyCorgi. (2021, November 17). Wal-Mart’s Potential for Investment and Profitability. Retrieved from https://studycorgi.com/wal-marts-potential-for-investment-and-profitability/

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StudyCorgi. (2021, November 17). Wal-Mart’s Potential for Investment and Profitability. https://studycorgi.com/wal-marts-potential-for-investment-and-profitability/

Work Cited

"Wal-Mart’s Potential for Investment and Profitability." StudyCorgi, 17 Nov. 2021, studycorgi.com/wal-marts-potential-for-investment-and-profitability/.

1. StudyCorgi. "Wal-Mart’s Potential for Investment and Profitability." November 17, 2021. https://studycorgi.com/wal-marts-potential-for-investment-and-profitability/.


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StudyCorgi. "Wal-Mart’s Potential for Investment and Profitability." November 17, 2021. https://studycorgi.com/wal-marts-potential-for-investment-and-profitability/.

References

StudyCorgi. 2021. "Wal-Mart’s Potential for Investment and Profitability." November 17, 2021. https://studycorgi.com/wal-marts-potential-for-investment-and-profitability/.

References

StudyCorgi. (2021) 'Wal-Mart’s Potential for Investment and Profitability'. 17 November.

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