The company is also planning to make significant improvements concerning its expansion schemes. It will appreciably develop its business units in order to compete with its closest rival, Target Corporation (NYSE:TGT) , in various foreign markets like Canada. Target has recently announced that it is aiming to open around 125 new retail stores in the country above the US. In order to counter this plan, Wal-Mart declared its $454 million worth of expenditures that will aim to increase and develop its presence in the market of Canada. Wal-Mart is proposing to open 37 stores in the country, which will give it 416 stores once this plan flourishes.
Contenders in the Market
Target currently conducts its operations in three segments: US Credit Card, US Retail, and Canadian. The company’s US Credit Card segment provides credit to its clients by means of its credit cards, which are the Target Card and the Target Visa. Its US Retail Segment focuses on the ways in which the company can boost its online and offline presence in order to allow its customers to buy products online or through finding them in a nearby branch with the help of online research. Lastly, its Canadian Segment thrives on account of the company’s acquisition of leasehold interests in the True North.
While Wal-Mart and Target are both established retailers in the industry and have fairly alike cost-structure, Amazon.com, Inc. (NASDAQ:AMZN) is recently providing a good competition as it has lowered the cost of its products and services. Amazon primarily serves its customers through its online stores, and concentrates on the variety, expediency, and price of its products. The largest online retail store’s customer sets consists of enterprises, sellers, customers, and content developers. It provides programs that allow sellers to advertise their products and services on various websites, develop their brand, and complete orders online.
Wal-Mart places itself as a discount retail company, but Amazon is recently attempting to offer similar low rates. In order to emerge and survive the competition successfully, Wal-Mart began new strategies that include same day distribution and upgrading of its presence in the online community, amongst others.
What Wal-Mart Did to Exceed Competition
Even though it may seem demanding for Wal-Mart to maintain its accelerated pace of development, it has to come up with new strategies in order to win the market competition against Amazon and Target. What is good about Wal-Mart is that it is completely focused on increasing its global presence.
In the past financial year, the retail giant obtained approximately 28% of its returns from international markets. In fact, international proceeds demonstrated a better rate of development in comparison to its domestic counterpart. Wal-Mart’s international income rose at a rate of 8.4% per annum in the previous three years, while its domestic revenue grew at a mediocre rate of 1.7%.
Valuable Words About The Company
Without a doubt, the company holds an established reputation among investors and businesses, principally because it holds resources that are capable of countering its competitors. The company remains a good investment, and its strong points can be witnessed in various areas like solid stock price performance, a rise in earnings per share, development in terms of revenue, excellent cash flow from transactions, and an upsurge in net income.
The article Wal-Mart’s Expansion in Two Worlds originally appeared on Fool.com and is written by Josef Ray Dagatan.
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