remained fairly stable in comparison to its direct competition. Wal-Mart did not incur the same sharp loss as its competition, as evidenced by Figure 3.25.This can most likely be attributed to low cost strategy; consumers either continued to or began to shop at this discount retailer due to spending constraints. Overall, the stock has performed exceptionally well, with various analysts rating the stock as a strong buy. On the contrary, due to Wal-Mart’s dependence on China and Chinese made products, the company’s is increasingly affected by the weakening US dollar or the strengthening Chinese Yuan. Annually, Wal-Mart purchases $27 billion of its merchandise directly for China, creating a great dependency on the country which in the future could negatively affect their stock price. The discount retail industry has a consistently large market capitalization. Nevertheless, far exceeds its competition in terms of its market capitalization. That being said, all key players in this industry have incurred a decreasing market capitalization from year ended 2008 to year ended 2009. Wal-Mart incurred a 9% decline in its market cap, which rests at $184,946,000 million for 2009. Wal-Mart along with other firms in the industry incurred losses due to the poor economic climate. However, Wal-Mart’s decrease in market capitalization in the last year has been less drastic than its competition. This is indicative of a strength within corporate leadership in the firm; and the stability of the company as an investment. However the corporation should still address the issue of decreasing market capitalization, which may be attributed to Wal-Mart’s increasing wage and labour battles, increased competition in the past five years, and increased spending due to international and domestic expansions. Figure 3.26 displays the market capitalization for Wal-Mart and its direct competitors from 2005 to 2009. Figure 3.26 also displays the percentage change of market capitalization over time comparing Wal-Mart and its competitors.
remained fairly stable in comparison to its direct competition. Wal-Mart did not incur the same sharp loss as its competition, as evidenced by Figure 3.25.This can most likely be attributed to low cost strategy; consumers either continued to or began to shop at this discount retailer due to spending constraints. Overall, the stock has performed exceptionally well, with various analysts rating the stock as a strong buy. On the contrary, due to Wal-Mart’s dependence on China and Chinese made products, the company’s is increasingly affected by the weakening US dollar or the strengthening Chinese Yuan. Annually, Wal-Mart purchases $27 billion of its merchandise directly for China, creating a great dependency on the country which in the future could negatively affect their stock price. The discount retail industry has a consistently large market capitalization. Nevertheless, far exceeds its competition in terms of its market capitalization. That being said, all key players in this industry have incurred a decreasing market capitalization from year ended 2008 to year ended 2009. Wal-Mart incurred a 9% decline in its market cap, which rests at $184,946,000 million for 2009. Wal-Mart along with other firms in the industry incurred losses due to the poor economic climate. However, Wal-Mart’s decrease in market capitalization in the last year has been less drastic than its competition. This is indicative of a strength within corporate leadership in the firm; and the stability of the company as an investment. However the corporation should still address the issue of decreasing market capitalization, which may be attributed to Wal-Mart’s increasing wage and labour battles, increased competition in the past five years, and increased spending due to international and domestic expansions. Figure 3.26 displays the market capitalization for Wal-Mart and its direct competitors from 2005 to 2009. Figure 3.26 also displays the percentage change of market capitalization over time comparing Wal-Mart and its competitors.
final_report_original.docx