Unit 6

The Final Project is to be submitted as a PowerPoint presentation of approximately 20-25 slides. Material from the Unit 4 and Unit 5 Assignments can be used to provide a background and foundation upon which to build. While the primary focus of the Final Project should be on your firm’s global operations, integrate information on the regional and national level, as well. How have they done in the past? What is their current state? What kinds of plans and possibilities do they have for the future? Is there room for improving what they do? Should new ventures be added or old ones subtracted? As you can see, the field is wide open for you to construct your project in the most relevant way you see fit.

As parts of the Final Project you are to include an 18-24 month forecast and a strategic audit (an analysis of how well the firm’s strategies have worked to date). Your conclusion should include a clear set of recommendations that are well supported. The project must include APA format references on the final slide and in-text references on the slide where information is presented. Include a minimum of three high-quality, up-to-date sources. It is to be submitted to the Week 6 Dropbox by the end of Unit 6.

10 

13 

13 

5 

10 

10 

10 

10 

10 

5 

24 

 

GB540 Unit 6 Assignment Rubric
Content and Analysis	Points Possible	Points Earned
PowerPoint presentation includes 20-25 slides.
Presentation includes an appropriate analysis of the firm’s global operations integrating information at the regional and national level.
Presentation includes an appropriate analysis of how well the firm has operated in the past.
Presentation includes an appropriate analysis of the firm’s current state.
Presentation includes an appropriate analysis of plans and possibilities the firm has for the future.
Presentation Includes an appropriate explanation and analysis of where there is room for improvement.
Presentation includes an appropriate analysis regarding whether the firm should add new ventures.
Presentation includes an appropriate analysis whether the firm should subtract diverge away from old ventures.
Presentation includes an18-24 month forecast for the firm.
Presentation includes a strategic audit that provides an analysis of how well the firm’s strategies have worked to-date.
Writing, Grammar, appropriate use of limited text and bullet points. Final slide includes at least three references in APA format. In-text references are included on appropriate slides throughout the presentation where applicable.
Total	120

Running head: WAL-MART ECONOMIC INDICATORS

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WAL-MART ECONOMIC INDICATORS
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Wal-Mart Economic Indicators

Julianna Yount

Kaplan University

According to Garvin (2010), economic indicators refer to economic statistics that reflect how a particular economy is performing, as well as how it is likely to perform in the future. Economists use a wide range of indicators to determine how well an economy is performing, which may range from inflation rate to unemployment rate. However, economic indicators are not always the same and they will tend to be different depending on the industry or company. While Wal-Mart’s financial reports might indicate that the company is performing remarkably well, the various economic indicators relevant to the company would indicate otherwise. This means that although Wal-Mart may seem like a highly successful business, numerous areas of its business would still be in need of improvement (Ireland, Hoskisson, & Hitt, 2010). Therefore, managers of the company have to put these indicators into consideration. Most companies fail because they neglect economic indicators, choosing to rely on their impressive financial statements that could be misleading. Although attaining certain levels of revenues in a consistent manner could be a sign of success, companies should also consider other factors to measure their performance.

Six Significant Economic Indicators for Wal-Mart

Wal-Mart could make use of certain economic indicators to evaluate its performance and take corrective actions. The six economic indicators that could prove significant for Wal-Mart include consumer price index (CPI), employment situation, employment cost index (ECI), productivity and costs index, producer price index (PPI) and U.S. import and export price indexes. Wal-Mart could use these economic indicators to ensure that its operations remain stable and efficient, which makes them important for the success of the company (Garvin, 2010). Most economists consider the consumer price index (CPI) as a reliable measure of inflation levels in an economy. This indicator measures price level changes for a given a market basket of consumer services and goods sold to consumers. This indicator compares a given list of services and goods to a base period. The employment situation refers to a monthly report that collects results of several surveys with the aim of monitoring the labor market condition. The employment cost index (ECI) refers to a quarterly economic report that records the changes in labor costs for businesses operating in the U.S. economy. The productivity and costs index helps to measure the inflationary trends in relation to the cost of wages, which often has an inflationary affect in other areas. A Producer Price Index (PPI) provides information relating to the average changes in prices that the domestic producers receive for their production. Lastly, the U.S. Import and Export Price Indexes provide critical information regarding the changes in prices of goods and services that that the U.S. imports or exports (Abels & Klein, 2008).

Relevance of the Six Indicators for Wal-Mart

Consumer Price Index

 Wal-Mart would find the consumer price index to be particularly relevant because it provides an indication of inflationary levels in an economy. A measure of inflation would help Wal-Mart to determine or predict the sale of its goods and services over a given period. Therefore, the company can make vital plans with regard to its sales and production in order to meet the demand levels sufficiently and without having to incur unnecessary costs (Abels & Klein, 2008). Through this index, Wal-Mart can make necessary adjustments to its costs relating to wages and overhead costs, as well as plan its production schedules according to the predicted demands based on the consumer price index. This indicator is vital for Wal-Mart irrespective of whether the economic situation is inflationary or not because it has to make plans for the prices of its goods and services, including the availability of those goods. The consumer price index is one of the economic indicators that could prove highly beneficial for the company.

Employment Situation

Besides, Wal-Mart has to rely on the employment situation in the U.S. economy because this has an impact on the rates of wages and other costs affected by changes in labor costs. The employment situation provides Wal-Mart with an essential summary of current labor market situation in the U.S., providing the company with information relating to average hourly earnings, the rate of unemployment, the average workweek and non-farm payroll employment (Abels & Klein, 2008). The report also provides information relating to labor cost on the various industries such as wholesale, construction, retail trade and transportation, among others. Thus, Wal-Mart can learn crucial information relating to labor hours and labor rates, which might help to guide some of its decisions relating to its workers.

Employment Cost Index

In addition, Wal-Mart can use the employment cost index (ECI) to make critical business decisions, particularly those pertaining to labor. This quarterly report provides vital information touching on the labor costs of various businesses operating in the U.S. The financial sector takes this report seriously because the report provides a reliable indicator of whether labor costs are rising or falling (Garvin, 2010). Consequently, businesses can use this information to measure inflation relating to wages and other paid benefits paid by the employer. This shows that Wal-Mart could use this report to plan for its labor costs, which include both wages and salaries. This also means that Wal-Mart could accurately assess the appropriate rate to pay for the various types of jobs, as well as to ensure that the labor rates offered are not below the current market rates. According to the U.S. Bureau of Labor Statistics (2013), many employers are increasingly using the Employment Cost Index (ECI) in their businesses as an escalator to regulate long-term purchasing and sales contracts, as well as to control the rates of wages in collective bargaining agreements.

Productivity and Costs Index

Wal-Mart can also use the productivity and costs index to its advantage in business. This measure is significant for Wal-Mart because it provide vital information on the different sectors of the economy regarding costs, which is an indicator that determines the unit labor costs associated with the production of each unit of output in America (Garvin, 2010). This is a vital indicator because it determines two critical measures in an organization, indicating their inflationary trends in a given economy. On the other hand, productivity helps to determine the level of efficiency with regard to labor. Together, costs and productivity help to provide critical information that helps to monitor trends in inflation with regard to wages, which often affects other areas (Abels & Klein, 2008).

Producer Price Index 

The Producer Price Index (PPI) could also prove beneficial for Wal-Mart because this indicator helps to determine the average change with regard to selling prices that producers in the domestic market have received over time. This indicator can help Wal-Mart to establish acceptable prices for its goods and services to ensure that they are appropriate and competitive in the market. Therefore, this indicator could help Wal-Mart to make appropriate plans relating to its revenues for a certain period depending on the figures presented in the Producer Price Index. Consequently, the company can have an exceptional opportunity to control its costs based on the expected revenues (Garvin, 2010).

U.S. Import and Export Price Indexes 

Lastly, Wal-Mart can also use the U.S. Import and Export Price Indexes in its business to ensure efficiency and ultimately success, in all its business operations. This indicator would provide Wal-Mart with indispensable information regarding to imports and exports by the U.S., which helps to provide an indicator of the performance of different industries (Abels & Klein, 2008). These indexes provide the company with information on the trends in the import and export of the various types of goods and services. The company can use this report to make import decisions regarding its supplies and sales to other nations.

A Strategy of How Wal-Mart Will Respond

Following this significant revelation with regard to economic indicators, Wal-Mart should take some bold steps to incorporate them in its planning and decision-making processes (Ireland, Hoskisson, & Hitt, 2010). Therefore, Wal-Mart should establish a plan that incorporates use of economic indicators in its decision-making processes because the promise to save the organization many unnecessary costs and help to minimize chances of losing through poor pricing and inappropriate costing. Wal-Mart should assess the benefits associated with each of the indicator outlined above and incorporate them in its decision-making process, especially those relating to wages, salaries, production and revenues (Tainer, 2006). This might require the company to establish a department that deals with research on the impact of the various economic indicators to ensure that the company achieves maximum benefit.

Wal-Mart’s Goal to Maximize Future Revenues

All companies have the ultimate goal of maximizing their revenues and Wal-Mart is no exception. Through thorough analysis of the impact of the economic indicators discussed above, the company can be able to determine trends in consumer spending, household income, and strength of the economy, employment situation and consumer spending. Proper understanding of these issues is vital because it helps to guide decision makers on how to make investment decisions, production decision, revenue planning, hiring decisions and business development, among others (Tainer, 2006). To maximize its revenues, Wal-Mart must engage in cost cutting measures, bargain for better prices for their supplies, provide appropriate working conditions to motivate workers and conduct aggressive and effective marketing campaigns. Besides, Wal-Mart should come up with effective strategies to retain its customers and attract new ones to its business. In addition, Wal-Mart has to find potential markets for its goods and services and invest substantially in research and development. These strategies would be effective in helping the company to maximize its profits because they focus on maximizing revenues while minimizing costs (Ireland, Hoskisson, & Hitt, 2010).

References

Abels, E. G., & Klein, D. P. (2008). Business information: Needs and strategies. Bradford: Emerald Group Publishing.

Garvin, P. (2010). The United States government internet directory. Lanham, MD: Bernan Press.

Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2010). Understanding business strategy concepts plus. Mason, OH: Cengage Learning.

Tainer, E. M. (2006). Using economic indicators to improve investment analysis. Hoboken, NJ: John Wiley & Sons.

U.S. Bureau of Labor Statistics. (2013). Employment cost trends. Retrieved from http://www.bls.gov/ncs/ect/