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Wal Mart Vs. Target Essay

1783 words - 7 pages

Wal-Mart and Target are both major players in today's retail environment. While different on elemental levels, both companies strive to provide excellent service to their customers and to fill niches in society. At first glance the two entities seem different in so much as their clientele, however; a brief examination of the operating profitability, asset utilization and risk management strategies show they have many similarities.Target's revolutionary style and marketing format provides high quality, stylish product at discounted prices. Target stores pride themselves in their well organized and well maintained family friendly stores that are clean and inviting to the consumer (Target, 2006). Target stores provide some of the highest quality and lowest prices on health and beauty products as well as a wide array of household items. The more modern Target super stores also contain a pharmacy, optical center, banking institutions, automotive repair, and photo services. Target markets trend forward merchandise and offers a step above the common discount store competitor. Target attracts a younger slightly more upscale consumer base because of its innovative style designs and designer partnerships (Wikipedia, 2006).Wal-Mart as well as Target, prides itself in providing name brand merchandise with the kind of friendly personal service expected at the neighborhood mom and pop store. Wal-Mart was the innovative industry leader in the development and launch of the super store concept offering a one stop shopping opportunity. Wal-Mart sells goods similar to the household staples offered by Target, however; Wal-Mart's focus has historically been on the more frugal economy minded consumer.In 2005 Target ranked in the top 20 contributors nationwide, giving back $2 million dollars every week to the communities the stores are in. Wal-Mart has won several awards for their generosity, such as the Corporate Patriotism Award and the Ron Brown Award (Wal-Mart, 2006).Both Wal-Mart and Target are audited by the professional consulting agency Ernst AND Young LLP, a global organization that helps many companies across all industries with services based on financial, transactional, and risk-management knowledge with their core businesses of audit, tax, and transactions.Target reported on their statement of operations that their net earnings were $2,408,000. Their total sales for 2005 were $51,271,000. This made their total revenues $52,620,000. Target incurred $34,927,000 in their cost of sales. This value is subtracted from the total revenues in order to get the net earnings value, in addition subtracted from total revenue are selling, general and administrative expenses at $11,185,000, credit card expenses at $776,000, and depreciation and amortization at $1,409,000. Reported on the statement of operations are the stock prices per share. Basic earnings per share are $2.73 and diluted earnings per share are $2.71. The weighted average is 882.0 for basic and 889.2 for...

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