Wal-Mart Nonmarket Pressure and Reputation Risk (A) (2024)

FAQs

What are the financial risks for Walmart? ›

Wal-Mart is the world''s leading retailer. The company is exposed to many financial risks: interest rate risk, foreign currency risk and credit risk.

The core concept of the business relies on providing users with all sorts of items at discounted prices. Walmart has streamlined its supply chain to provide users with all the required items while maintaining lower operations costs so that both parties can enjoy benefits.

Walmart faces several threats, including intense competition, changing consumer behavior, economic downturns, regulatory environment, and cybersecurity threats. By staying vigilant and adapting to these threats, Walmart can continue to thrive in the retail industry.

Opponents cite concerns such as traffic congestion, environmental problems, public safety, absentee landlordism, bad public relations, low wages and benefits, and predatory pricing.

Walmart encounters several problems that include stiff competition, a negative reputation, constraints in business acquisitions and joint ventures, and stringent cultural values in foreign markets (Kneer 25). There is stiff competition from other retail stores that have adopted a low-price strategy.

Associates who work at Walmart are expected to operate based on our high standards and values — respect, service, excellence and integrity. Acting consistently with these values demands that a culture of integrity guides all our decisions.

Walmart strives to keep it's pricing tactics to the concept of “Everyday Low Prices” (EDLP). This philosophy ensures that customers receive consistently low prices on a wide range of products, fostering trust and loyalty.

Financial risk can also apply to a government that defaults on its bonds. Credit risk, liquidity risk, asset-backed risk, foreign investment risk, equity risk, and currency risk are all common forms of financial risk.

Walmart International had net sales of $114.6 billion for fiscal 2024, representing 18% of our fiscal 2024 consolidated net sales, and had net sales of $101.0 billion for both fiscal 2023 and 2022. The gross profit rate is slightly lower than that of Walmart U.S. primarily because of its format and channel mix.

Too often, Walmart has failed. More than $1 billion in fraud losses were routed through the company's financial systems between 2013 and 2022, according to filings by the Federal Trade Commission and court cases analyzed by ProPublica. That has helped fuel a boom in financial chicanery.

What are the financial risks of a company? ›

A business takes a financial risk when it provides financing of purchases to its customers, due to the possibility that a customer may default on payment. A company must handle its own credit obligations by ensuring that it always has sufficient cash flow to pay its accounts payable bills in a timely fashion.