Sears and Wal-Mart are two of the biggest chain retail store in the United States nowadays. First part of the paper will be background of each company; follow by analysis of financial performances in each company and finally come up with suggestions for both Sears and Wal-Mart to improve their business mode in order to become more profitable business organization in the retail industry.
Sears founded in 1891 and started with a catalog business. During 1920s, they expended their business into retail stores. During the 1980s, they faced with the increasing competitive market place and Sears offered company proprietary credit card in order to build customer royalty and offered customers a more flexible ways to pay off their purchases. Core businesses of Sears included retail, service and credit. As of 1997, Sears had 3,530 stores nationwide.
Wal-Mart founded in 1962. As of 1991, Wal-Mart was the world largest retailer with net sales nationwide of $ 44 billions dollar. During 1990s, retail business became increasing competitive and profit margin across the industry went down gradually. In order to increase sales, Wal-Mart collaborating with Manhattan Bank in 1996 to issue a Wal-Mart Master card to facilitate customers to pay for their purchase. Core businesses included Wal-Mart discount store, Wal-Mart Supercenters and Sam¡¦s Club.
First, let us compare the overall financial performance of Sears¡¦ and Wal-Mart. During fiscal year 1997, Sears had a steady increase of net revenue for 15% compare with previous year referring to exhibit 1. For Wal-Mart, net Revenue went up for around 12% in the same fiscal year referring to exhibit 3. However, it only generated around 3% of net income for both Sears and Wal-Mart during the year 1997 according to analyze ...