Walmart has a market value of $71.66 per share compared to a book value
of $22.86 per share (Yahoo Finance, 2013). The intellectual capital
value of Walmart is $48.80 per share and the ratio of market value to
book value is 3.14. It is not surprising that Walmart has a low market
value to book value ratio. Companies that have high ratios are usually
tech companies that have a high investment in knowledge resources and
technological expertise. Walmart invests heavily in physical resources,
such as stores and warehouses, and less investment in knowledge. Walmart's market value to book value is higher than their competitors in the industry.
Walmart has had a hard time retaining employees as 70% of their
employees decide to leave in their first year. The biggest reason for
their turnover is low wages and inadequate health care. Walmart employees are paid 20% less than
the average retail worker. Walmart also has had a hard time retaining workers
due to poor working conditions. They have had lawsuits filed against
them for forcing their employees to do off-the-clock work, not giving
overtime pay, and not allowing workers rest and lunch breaks. They have
also been sued for discriminating against women (Wikipedia, 2013).
Walmart's mission statement is "We save people money so they can live
better." I think their employees identify with Walmart's mission, but
their mission does not lead to employee retention. They also have a
hard time retaining employees because the work is not challenging.
Walmart is trying to improve their retention rate. They are now
offering their employees who have been on the job for at least one year
full-time or three years part-time, the chance to get a 15% tuition
reduction from American Public University which is an online college
(Inc. 2010).
Walmart has a hard time attracting quality employees because of their
bad reputation with their employees. They can't rely on getting quality referrals from their
current employees like other companies can. Walmart has programs to
develop employee skills. They have a Assistant Management Training
program to develop managerial skills. Walmart has the Walton Institute
which allows employees to learn about the company culture and how to
foster that culture (Walmart, 2012).
Walmart's intellectual capital strength is their logistics strategy. By
using just-in-time inventory, they are able to move products quickly
which reduces inventory costs. They use ID tags to better control
inventory. They constantly try to improve their supply chain,
especially with their trucks. Walmart has seen a 21% increase in fuel
efficiency in their trucks, 5.5% increase in the pallets in their
trucks, and a 6.5% reduction in empty truck miles (About.com, 2010).
About.com. 2010. Retrieved from http://logistics.about.com/od/industryfocus/a/Wal-Mart.htm
Inc. 2010. Retrieved from http://www.inc.com/news/articles/2010/06/wal-mart-worker-retention.html
Walmart. 2012. Retrieved from http://careers.walmart.com/training-and-development/
Wikipedia. 2013. Retrieved from http://en.wikipedia.org/wiki/Criticism_of_Walmart
Yahoo Finance. 2013. Retrieved from http://finance.yahoo.com/q/ks?s=WMT
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