What were the industry conditions facing Walmart at the beginning ...

[frankwu]

What were the industry conditions facing Walmart at the beginning of 2012?
 
  Specifically, identify and comment about expectations for the sources for increasing revenues, concerns about costs, expectations for online sales, and where the retail industry was situated from a life-cycle perspective. You DO NOT need to address Porter's Five Forces model in this question.

Question 2

Assess the economic conditions facing U.S. firms in 2012.
 
  In you assessment, be sure to address the economy-wide recovery from the recession of 2007-2009, inflationary expectations, the political situation, expected economic growth, and consumer confidence.

[mistyjohnson]

Answer to Question 1

At the start of 2012 significant economic recovery was not expected until 2014. Increased revenues would need to come from an increase in market share and maintaining existing customers. Of concern was the level of consumer confidence. Additionally, in a slow growth environment rasing prices is difficult, thus Walmart should be concerned about increasing product costs even as financing costs were expected to remain low. In reflecting about market conditions, Walmart understand that the retail market is mature and not likely to outgrow the general economy. Online sales, however, show significant potential but in a highly competitive market.

Answer to Question 2

By the start of 2012 the U.S. was out of the recession, and well into a jobless recovery. The unemployment rate was still high (around 8), real economic growth was sluggish (about 1.7 the previous year) with only a modest expected increase in the coming year. Interest rates were relatively low and the Federal Reserve was actively engaged in a policy of monetary stimulus including quantitative easing, and consumer confidence was on the rebound but not particularly strong by historic standards. A retail firm such as Walmart could probably anticipate continued sales growth, low borrowing costs, and modest political resolution with the upcoming presidential and other national, state, and local elections.