Management of Human Resources (MBA) Essay Example | Topics and Well Written Essays - 750 words

Management of Human Resources (MBA) - Essay ExampleBuilding rentals accounted for 1.8% of gross sales in the late 1970s. This was the lowest level for major discounters. Additional building rentals of Wal-Mart took it up by only 0.1%.Wal-Mart was able to keep its monetary value of goods as low as possible. It had a centralized purchasing network, and therefore purchased in bulk. It also had distribution centers and a good distribution network that ensured its stores always had a consistent put out of stock. These steps further reduced cost greatly.Wal-Mart had Goodwill in cities where it was established because of their promotional strategy which was tailored by its philosophy of Everyday low prices. It had a high sales turnover and spent just 1.1% of its net sales in the second half of the 1970s. Costs were greatly reduced here too.Wal-Mart undertook bang-up investments to improve labor productivity. Salaries and wage expense had declined to 10.1% of sales by 1985. This reduced c ost, however employee incentives, like profit sharing were enabled to ensure employee satisfaction. Their employees put in their outmatch to satisfy Wal-Mart customers in return.Cost is minimized as much as possible, allowing for continuous reduction in prices of commodities. The reduction in prices led to increased sales and a high rate of turnover, hence increased profits and more operating income for expansion and performance.How does Wal-Mart have superior profitabilityExhibit 2 (page 10) is a financial performance that comparisons Wal-Marts performance with that of its competitors from 1974 to1984 in (%) 2. Wal-Mart has superior profitability because of the high percentage of sales. It was very competitive in terms of prices, Wal-Mart was able to sell at very low prices governed by its philosophy of Everyday low prices. It ran a lot of promotional sales and was able to balance this with a low cost profile. Increased sales brought in more profit, Wal-Mart had the highest retur n on equity of 33.0%, sales growth of 40.3% and earnings per share growth of 38.8%.How do Wal-Marts retail prices compare to those of its competitorsWal-Mart was very competitive in terms of prices. The store managers had the liberty to set prices as compared to their counterparts that didnt have. This latitude in price setting enabled prices to be set uniquely to a particular location, while having the overall objective of the organization in mind.In a comparism by Sachs in late 1983 and early 1983 on a location