Sears and Walmart

CASE ANALYSIS:

Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc.

FIN 490 Fall 2013

Group member:

Nanxun An, nan3, UIN: 659073843

Luke Gu, conggu2, UIN: 652690239

Di Jin, dijin1, UIN: 652831461

Weiyi Sun, wsun23, UIN: 677661443

Question 1: RETAIL STRATEGY SEARS VS WALMART

Generally speaking, the difference of retailing strategies between Sears and Wal-Mart can be divided into five aspects.

* Stores and Retail Area

Sears: The Number of stores has gone up by 15% in 2 years. The number of stores at the end of 1995 is 3070 and it has gone up to 3530 by the end of 1997. Meanwhile, the retailing space has increased from 81.4 million sq. feet to 92.7 million sq. feet during the same period, registering an increase of 13.80% in 2 years.

Wal-Mart: The number of stores has gone up barely by 5.17% in 2 years. The number of stores at the end of January 1996 is 2667. It has gone up to 2805 by the end of January 1998. Besides, the retailing space has increased from 278 million sq. feet to 313 million sq. feet during the same period, leading to an increase of 12.58% in the retail sales area.

* Leasing Policy

Sears: Operating leases have increased from 357 million in 1995 to 439 million in 1997, registering an increase of 23% over 2 years. Capital leases have increased from 433 million in 1996 to 498 million in 1997, an increase of 15% over 1 year. Sears experiences higher rentals and lower depreciation in this period.

Wal-Mart: Operating leases have increased from 531 million at the end of January 1996 to 596 million at the end of January 1998, registering an increase of 12.24% over 2 years. Capital leases have increased from 2782 at the end of January 1997 to 3040 at the end of January 1998, an increase of 9.27% over 1 year

* Credit Cards Policy

Sears: Sears issues a proprietary credit card and bears the risk of default by customers in making payments and asking customers to pay over time.

Wal-Mart: Wal-Mart utilizes a MasterCard to its clients...