Free Essay

Case Study I: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc.

In: Business and Management

Submitted By yeeboa
Words 3654
Pages 15
Case Study I: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. Chao Han
Junliang Shi
Zhongyi Hu
Azusa Pacific University

Case Study I: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc.
Sears, Roebuck and Co. and Wal-Mart Stores, Inc. are the two big retail companies in U.S. Although Wal-Mart was acknowledged powerhouse of the U.S. retailing industry, Sears’ ROE exceeded Wal-Mart’s 2%, which can show that this firm was the true powerhouse. Therefore, Don Edwards, an analyst with a prestigious investment bank. He compared two financial performances of these two companies and he wanted to figure out which company performed better in different areas.
Sears, Roebuck and Co. was founded in 1891. It started originally with a sole catalog business and then expanded into retail stores in 1924. Its stores were primarily located in shopping malls, including a large variety of merchandise. Sears has become the world’s largest retailer in terms of annual sales. By the early 1980s, Sears faced increased competition and declining market share. In 1992, The CEO of Sears, Arther C. Martinez has carried out three methods to improve profitability. The first was to cut costs. The second was to re-oriented the product mix in which the target audience was set to be middle-class female shoppers. The third was to offer customers more flexibility through the use of the company’s proprietary credit card. The policy of credit card has enhanced Sear’s profitability.
In 1962, the first Wal-Mart store was opened in Bentonville, Arkanas. Then the small rural community grew into a retailing powerhouse. In 1991, Wal-Mart claimed $43.9 billion net sales and the title of world’s largest retailer. Five years later, the company’s annual sale was up to $100 billion. Wal-Mart offered competitive price which reflected in the slogan: Always low prices. The group also operated Sam’s Club membership warehouses and Wal-Mart Supercenters to extend their business. Different with Sears, Wal-Mart customers could own a MasterCard with the Wal-Mart logo and this credit card was issued by Chase Manhattan Bank.
There are several exhibits which respectively showed basic financial status of Sears and Wal-Mart. The first four exhibits represented the business description, the non-standard spending, financial statements, and several significant accounting policies of Sears during fiscal 1997. The data showed that Sears used credit card services to enhance its profitability; and the Company (Sears) allowed third credit and debit cards to participate its services. Then the data showed the net income before noncomparable items of the Company increased in fiscal 1997 due to the strong merchandise sales and higher credit operating income. Moreover, exhibits 5 to 7 represented the lease footnote of the Company in fiscal 1997, its business segment which consists of retailing, service, and credit business, and the details of its credit segment. On the other hand, exhibit 8 started to introduce the status of Wal-Mart’s business; it showed the financial costs for conversions of Wal-Mart discount stores to Wal-Mart Supercenters and the total Wal-Mart sales per square footage, which includes discount stores, supercenters, and Sam’s Clubs. In addition, exhibit 9 stated that Wal-Mart had an increment of net income during fiscal 1996-1998. Finally, the last two exhibits contained several accounting policies of Wal-Mart and its lease footnote. After analyzing these data and other related sources, this paper shall compare these two retail companies in marketing, service, business strategy, and assets, liabilities and stockholder’s equity areas, and then give a brief conclusion of which company performs better and worth being invested.
Sears Roebuck & Co. offers a variety of merchandise and related service; it has made effort to expand its market. Sears not only established stores in the foundation of shopping malls, but also exploring other places. According to “Sears, Roebuck and Co. Profile.”, beyond about 785 US mall-based stores in all 50 states, Sears operates 20 Sears Essentials/Grand stores in 10 states, as well as 54 specialty stores that include three dozen free-standing Sears Auto Centers and more than a dozen Lands' End retail stores. Sears' stores sell apparel, tools, and appliances , and provide home services under the Sears Parts & Repair Services and A&E Factory brands. It also operates a growing online business. Sears was acquired by Kmart Holding Corp. in 2005. The deal formed Sears Holdings, which owns both chains. Nutsch,Kacani, Seely, Green and Eagle (2004) indicated that Sears operates primarily in the United States, Puerto Rico, and Canada. Sears, Roebuck, & Co. is ranked fifth in the retail market, behind: Wal-mart Stores Inc., Target Corp., Kohl’s Corp, and JC Penney Company Inc. Sears operate both specialty and full-line stores. The customer operations of Sears consist of major sales from online and catalog marketing. Sears’ 871 full-line stores offer a wide range of products for the home, including appliances, clothing, jewelry, automotive supplies, power tools, and garden equipment. is Sears’ implementation of internet marketing and offers a limited assortment of home and accessories merchandise. In addition to its full-line stores, Sears operates 1,100 specialty stores, 792 primarily independently owned stores, 245 Sears Hardware Stores, 8 furniture stores, 18 The Great Indoors stores, 45 Sears Outlet Stores, and a commercial sales division.
Wal-Mart Stores, Inc. has over 11,000 stores in 27 countries, under a total 71 different brands. It operates retail stores in various formats worldwide. The company operates through three segments: Wal-Mart U.S., Wal-Mart International, and Sam’s Club. It operates discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, restaurants, apparel stores, drug stores, and convenience stores, as well as various retail Websites, such as and With more than 11,100 stores internationally, Wal-Mart stores leverage their global resources to meet local needs. It offers an assortment of merchandise and services at everyday low prices.
Comparing these two companies’ performance in marketing, both of them served as the worldwide retail stores to meet the needs of local people. But Wal-Mart could be the preference for most of people rather than Sears. Wal-Mart stores relatively provide more comprehensive products for customers, including grocery items such as meat, bakery, and dairy as well as consumables such as health and beauty aids. It provides almost everything customers may need in their daily lives. Therefore, it is one of the aspects that Wal-Mart overshadows Sear. Sears once had enormous customer trust, admiration, and loyalty -- it was known for its hard-line products. However, it has just been a history. Sears has a loyalty program called Shop Your Way Rewards, which allows customers to earn and save in a number of ways and offers an entire online store with products from appliances to fashion to toys. However, it has ignored the customer preferences over the years. The problem is that Sears has relied on this flawed loyalty program in a flawed attempt to bring customers to the stores. The loyalty of customers is based on their changing needs but Sears failed to do so.
Wal-Mart Stores, Inc. outperforms Sears Roebuck & Co. in marketing strategies. According to Bagons (2013), Wal-Mart Stores, Inc. has several outstanding marketing strategies that make it occupies a big market share. The first is the low prices it offers their products for. The guaranteed low prices are very attractive to customers since prices are the important elements customers will consider when they are seeking for products. There are no guaranteed low prices in Sears even if there is a reward program. “Shopping” actually takes place before “reward”. The second is its extremely easy access for customers. Wal-Mart Stores, Inc. has thousands of stores all around the world. Even if customers don’t live near one, they could always use their internet store and buy from there. This strategy makes marketing to customers much easier since it’s easy for the customers to find the stores and consequently do business with them. On the other hand, the customer service is available for customers 24 hours a day, which help maintaining customer satisfaction and adjust the problems in time. The locations of Sears are not as impressive as Wal-Mart--not that many, not that convenient and not that close to the neighborhood. Even if many of Sears are located in shopping malls, they are easily ignored by customers since Sears is not the main part of shopping malls. The third, as mentioned before, is Wal-Mart’s supply of all types of products. Anyone coming to Wal-Mart could find something that they are seeking for. To this extent, Wal-Mart gives customers a much broader appeal to all personality types. Even if customers’ needs are changing, they will finally be satisfied in this retail that almost contains all kinds of products. The fourth strategy is social media campaigns carried out by Wal-Mart. Social media campaigns have become a prevailing marketing strategy in our times. Since it is one of the best types of marketing due to its consistent results, all large companies including Wal-Mart have focused a lot of resources on it. Blogging and video sharing have proven to be the best types. Based on social media campaigns, Wal-Mart has become a retailer that is known to every household. As a result, the customer base of Wal-Mart is more steady than Sear’s. It’s understandable that customers prefer to go to a close retailer in which the low prices are guaranteed and more products could be found.
Sears did a great job in maintaining the penetration of Credit products in all their sales and service channels which increase their revenues of the Retail and Services business. By suggesting customers to use the Company’s domestic credit operations, Sears attracted many customers whatever old or new to purchase goods and enjoy services. According to the report by Don Edwards, at the end of 1997, Credit had 27 million active customer credit accounts, with an average balance of $1,058. The traditional charge card occupied 90% of total receivable. It is obvious that Sears used to offer a good Credit service and did attract a lot of customers. However, based on Sears’ recent year’s performance on service, Sears does not perform very well. According to Loeb (2014), “Under current leadership, the company has ignored customer preferences.” The key of the service is around the company’s target customers. If the service cannot reach the target customers, then the service is not good. Now the fact is that Sears ignored the new trend and only relied on the loyalty program and fail to attract customers to the stores. That is why in 2006, Sears restructured its operations and these operations are run by people with little retailing experience. It showed that Sears does not care about the quality of the service. Thus, Sears used to successfully attract customers and made the annual sales increased, however, since the wrong strategy, their service cannot help them to appeal new customers.
Wal-Mart added another financial service across the country last year. This retailer announced in Apr, 17, 2014 that customers can transfer money to and from any of its 4,000 stores in the U.S. and Puerto Rico. This financial service is not new to Wal-Mart customers. According to Touryalai (2014), Wal-Mart has played the role as a bank for a long time. This company once fails to get a bank charter. After this, Wal-Mart tried to use other ways to provide financial services to customers which also included the new financial service announced recently. The aim of Wal-Mart’s service is that earning money by providing service and keeping shoppers stay longer in stores. Based on Ben Jackson (2014)’s understanding, who is the senior analyst at Mercator Advisory Group, a payments and banking consulting firm, offering financial service is an extension of Wal-Mart larger financial service strategy. Another service Wal-Mart has is that the company establishes the new partnership with in 2014, which can help consumers to shop for health insurance. “This approach is similar to what we saw with Wal-Mart’s retail clinic strategy, where they leased space in their stores to local health systems rather than operating their own clinics,” said by Alicia Daugherty, who leads the Advisory Board Company's marketing and planning research. Partnering with also helps Wal-Mart to know how consumers shop for health plan.
Comparing these two companies’ performance in service area, both two companies made some effort to service customers and to satisfy them in order to keep them stay longer in stores. From the statements of income of Sears in fiscal year 1997, the merchandise sales and services section showed the increase trend than the two previous fiscal years. Therefore, the total revenues of Sears in 1997 are $41,296 million, which is 3,232 million more than 1996. With more and more evidence showed that Sears is not as it used to be, investor needs to consider whether Sears is still worth investing. Due to the wrong strategy and leadership method, Sears does not provide high-quality service in stores. Shoppers will not feel satisfied if only the product and the service are good. The service shows company’s attitude towards customers. However, the CEO of Sears, Edward Lampert claims that inventory reductions, expense management and a ‘member-based’ business model will save the company instead of focusing on retail business and improving service quality. If Sears cannot improve their service, it will not enjoy the decreasing popularity in once enjoyed.
However, Wal-Mart is doing a totally different service strategy. Financial service The company keeps consumers staying longer in stores by providing financial service, not only the money transfer service, but also let licensed agents to help consumers shop for health insurance and navigate Obamacare’s health insurance exchanges. Wal-Mart keeps customers stay longer and then gets profit by financial service. According to Mercator’s Customer Monitor Survey Series, in 2013 14% of consumers sent transferred money to friends and family up from 9% in 2012. Multi-service helps Wal-Mart to compete with transfer giant such as Western Union and MoneyGram. Jackson explains this by saying “If a customer’s wallet is filled at a Wal-Mart store, then it’s likely the customer will do some incremental shopping there too.” It is true that Wal-Mart’s goal is becoming a shopping place that offering multi-services. Thus, only comparing the two retail companies in service area, Wal-Mart is doing better in keeping customers longer in stores and getting profit by service, however, Sears Credit service is old-fashioned and the company is lost in the retail trend.
Business Strategy
During the fiscal 1997, based on the idea that “make it more attractive for customers to purchase goods and services from the retail and services businesses”, Sears, Roebuck and Co. drove its operation in selling credit cards through its own brand, which allowed the products to offer by Sears, Roebuck and Co.’s domestic credit operations. The results of operating credit business are that the sales of products and services increased 8% than previous year. In the exhibit 7 of Edwards’ research, it showed that Sears credit card was sold as 55.1% of its total sales. As a result, Sears gained 1.30 billion dollars as the net income before noncomparable items in 1997, which grew 4.8% per share to 3.27 dollars from previous year. During the fiscal 1995 to 1997, Sears distributed its business as home stores, full-line stores and auto stores. According to related researches, “the home stores showed a growth of 6% over total sales area”. On the other hand, the full-line stores and auto stores decreased 5% on total sales. The credit policy reduced Sears’ operational costs and increased its income. Moreover, Sears also accepts credit and debit cards from third party; its purpose is to maintain the penetration of credit products in all sales and service sections. The net income of Sears benefited from this policy, which showed in description of business in fiscal 1997.
For Wal-Mart’s part, it respectively operates business as Discount Stores, Supercenters and Sam’s Clubs. Wal-Mart started to combine full-line supermarket and discount store as Supercenters in fiscal 1988. In the Edwards’ exhibits 8 of Wal-Mart’s description of business, the total balance of conversions of Wal-Mart discount stores to Wal-Mart Supercenters were increasingly growing, and Wal-Mart gained a considerable increase of income on Supercenters. In the same report as Sears’ research, the discount stores of Wal-Mart decreased around 2% over the total number of premises; the super centers grew 134% and Sam’s clubs grew 2% of the total of their respective premises during fiscal 1995 to 1997. Wal-Mart mainly invested on its conversion of super centers and gains a valuable return through it. Besides, with the classical slogan “always low prices”, Wal-Mart becomes increasingly competitive than most of retail stores.
To compare these two top enterprises, they show us totally different ideas on business strategy. The results as the data of exhibit 2 and 8 showed, Sears, Roebuck and Co. gained many profits based on its credit business in fiscal 1997, but the total sales at Sears fell a bit unlike those of Wal-Mart rose. Also, the retail store revenues per selling square foot of Sears were 318 dollars in fiscal 1997, which were different from Wal-Mart’s 337.35 dollars. Thus, Sears’ strategy was not advanced like Wal-Mart’s. A report from Crain Communication Inc. stated that the move of Sears’ issuing MasterCard was outmoded. Customers got lower interest rates on their bank cards and “offering sweet rewards programs are using the Sears store card less and less”. Sears cannot compete with discount stores like Wal-Mart under this situation. In contrast, Wal-Mart aimed at the needs of customers and developed many substantial supercenters which supply articles for daily use on low price. That is, conversion of discount stores to supercenters not only increases the income of Wal-Mart, but also successfully attracts increasingly number of shoppers.
Assets, Liabilities and Stockholder’s Equity

These two charts showed the total liabilities and stockholders’ equity of Sears and Wal-Mart in 2014. From the first chart, it is clear that the total stockholders’ equity decreased in 2014. At the beginning of 2014, the total stockholders’ equity of Sears is 1, 739, 00 million dollars, then in November, the number decreased to 126, 00 million dollars. The total liabilities and stockholders’ equity also decreased 3,092 million dollars, from 18,261 million to 15,169 million dollars. The total assets of Sears and Wal-Mart in 2014 are also displayed in these two charts. By 10/31/2014, the total assets of Wal-Mart are 207,889 million, which surpassed the total assets of Sears (15,169 millions) a lot. The general trend of total assets of Wal-Mart in 2014 in increasing; but for Sears in 2014, the general trend is decreasing. The first chart illustrated that all the assets, liabilities, and stockholders’ equity have the decreasing trend, therefore, it is hard to estimate that Sears can perform well in 2015.
In addition, the above chart showed an obvious phenomenon that the Sears holdings shareholders equity rapidly declined from 2012 to now. Thus, investors would face a big risk when they consider participate Sears shares. New investors should begin to shift their goal to other optimistic enterprises.
In conclusion, this paper compares Sears, Roebuck and Co and Wal-Mart Stores, Inc. in four different areas: marketing, service, business strategy and assets, liabilities and stockholder’s equity. Wal-Mart outperforms Sears in marketing due to its outstanding marketing strategies. Wal-Mart occupies a bigger market share than Sears in terms of its guaranteed low prices, easy access, all types of products, and social media campaigns. Sears relied on its flawed Shop Your Way rewards system and consequently ignored the customer preferences over the years. Wal-Mart also does better than Sears in service area. By offering money transfer service and helping customers who have problem in health plan. However, Sears failed to improve their service due to several wrong strategies. Moreover, Sears relied on its special credit business strategy to gain many profits, but it was outmoded. In contrast, Wal-Mart made an excellent decision that transforming Wal-Mart Supercenters and keeping low price to attract more shoppers. By looking at the balance sheet of these two companies in 2014, Wal-Mart has an increasing trend in assets, liabilities, and stockholder’s equity, comparing to Sears has an decreasing trend in 2014 whole year and the three previous years. Therefore, Wal-Mart is more worthy of investing than Sears.

Bagons, S. (2013). Top Marketing strategies that can be Learned from WalMart. Retrived from
Crain Communications Inc. (2000). Credit card push won't recharge Sears' strategy. Retrieved from
Loeb, W. (2014). Why Sears Is The Dying Dinosaur Of Retailing. Retrieved from
Nutsch, M., Kacani, R., Seely. M., Green A., & Eagle, W. (2004). Sears, Roebuck and Co. G5 Investment Group. Retrieved from
Sears, Roebuck and Co. Profile. (2015). Retrieved from
Touryalai, H. (2014). Walmart's New Money Transfer Service: Should Banks, Western Union And MoneyGram Be Nervous? Retrieved from

Similar Documents

Premium Essay


...The University of Illinois Executive MBA July 13, 2004 Tentative Syllabus Managerial Perspective on Financial Accounting Accountancy 401X; Fall 2004 Michael J. Sandretto, 225C David Kinley Hall (217) 244-6410 (office); (217) 352-4832 (home, before 10:30 p.m.) or Texts: Antle, Rick, and Stanley J. Garstak, Financial Accounting, Southwestern (United States), second edition, 2004 (Antle). Palepu, Krishna G., Paul M. Healy, and Victor L. Bernard, Business Analysis and Valuation: Using Financial Statements, Text Only, Southwestern (United States), fourth edition, 2004 (Palepu). Background: Accounting is called the language of business for at least two reasons. First, accounting terms such as sales, revenues, profit, net income, costs, gross margin, expense, and capitalize are widely used in business. Any businessperson is expected to understand those terms. Second, managers rely on accounting to understand an organization’s economic condition at a point in time and its economic performance over a period of time. As a result, they use accounting information to communicate with others. Managerial Perspective on Financial Accounting will help you understand publicly available financial statements for publicly traded companies and financial statements prepared for internal use. It is also an introduction to financial statement analysis and valuation methods. The basic financial accounting methodology...

Words: 2809 - Pages: 12

Premium Essay

Best Buy Overview

...Executives 6 Strategy 7 Customer Centricity 7 Value-added Services Business 9 Supply Chain and IT Systems 9 New Store Openings 10 Mergers & Acquisitions 10 Employees 11 Key Competitors 12 5-Year Performance vs Key Competitors 13 Appendix 14 Business Summary Best Buy is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services in a superstore format. It operates retail stores and commercial Web sites in the U.S., Canada and China, under the brand names Best Buy ( and, Future Shop (, Magnolia Audio Video ( and Geek Squad ( and As of Feb 25 2006, Best Buy operated 742 Best Buy stores, 20 Magnolia Audio Video stores and 12 Geek Squad stores in the U.S.; and 118 Future Shop stores, 44 Best Buy stores and five Geek Squad stores in Canada. Best Buy operates two reportable segments: Domestic and International. The Domestic segment is comprised of all U.S. store and online operations, including Best Buy, Magnolia Audio Video and Geek Squad. Magnolia Audio Video stores offer high-end audio and video products, and services. Geek Squad offers residential and commercial in-home computer repair and support. The International segment is comprised of all Canadian store and online operations, including Future Shop, Best Buy and Geek Squad. The International segment offers products and......

Words: 23684 - Pages: 95

Premium Essay


...ROBERT F. HARTLEY • Cindy Claycomb 12th Edition T W E L F T H E D I T I O N MARKETING MISTAKES AND SUCCESSES Robert F. Hartley Late of Cleveland State University Cindy Claycomb Wichita State University VICE PRESIDENT & EXECUTIVE PUBLISHER SENIOR EDITOR PROJECT EDITOR EDITORIAL ASSISTANT ASSOCIATE DIRECTOR OF MARKETING MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR PRODUCT DESIGNER SENIOR PRODUCTION MANAGER ASSOCIATE PRODUCTION MANAGER PRODUCTION EDITOR COVER DESIGNER George Hoffman Franny Kelly Brian Baker Jacqueline Hughes Amy Scholz Kelly Simmons Marissa Carroll Harry Nolan Allison Morris Janis Soo Joel Balbin Eugenia Lee Kenji Ngieng This book was set in 10/12 New Caledonia by Aptara®, Inc. and printed and bound by Courier/Westford. The cover was printed by Courier/Westford. This book is printed on acid-free paper. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is built on a foundation of principles that include responsibility to the communities we serve and where we live and work. In 2008, we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and ethical challenges we face in our business. Among the issues we are addressing are carbon impact, paper specifications and procurement,......

Words: 180086 - Pages: 721

Premium Essay

Mm4 Details Case Study E L E V E N T H E D I T I O N MARKETING MISTAKES AND SUCCESSES 3 0 T H A N N I V E R S A RY Robert F. Hartley Cleveland State University JOHN WILEY & SONS, INC. VICE PRESIDENT & PUBLISHER EXECUTIVE EDITOR ASSISTANT EDITOR PRODUCTION MANAGER PRODUCTION ASSISTANT EXECUTIVE MARKETING MANAGER ASSISTANT MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR SENIOR DESIGNER SENIOR MEDIA EDITOR George Hoffman Lise Johnson Carissa Doshi Dorothy Sinclair Matt Winslow Amy Scholz Carly DeCandia Alana Filipovich Jeof Vita Arthur Medina Allison Morris This book was set in 10/12 New Caledonia by Aptara®, Inc. and printed and bound by Courier/Westford. The cover was printed by Courier/Westford. This book is printed on acid-free paper. Copyright © 2009, 2006, 2004, 2001, 1998, 1995, 1992, 1989, 1986, 1981, 1976 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website Requests to the Publisher for permission......

Words: 177260 - Pages: 710

Premium Essay

Ann Taylor: Survival in Specialty Retail

...The CASE Journal Volume 5, Issue 2 (Spring 2009) Ann Taylor: Survival in Specialty Retail Pauline Assenza Manhattanville College Alan B. Eisner Lubin School of Business, Pace University Jerome C. Kuperman Minnesota State University Moorhead In the summer of 2008, headlines announced that the declining economy was generating a “wave of retail closures” among many well-known companies, including Home Depot, Pier 1 Imports, Zales, Gap, Talbots, Lane Bryant, and Ann Taylor. The Chief Executive of J.C. Penney’s called the 2008 situation “the most unpredictable environment in his 39-year retail career”. i One industry group forecasted that nearly 6,000 retail stores would close in 2008, a 25 percent increase from the previous year. A representative from the National Retail Federation (NRF) suggested that these businesses should “look at where they’re underperforming and how can they change their operations so that they have a little bit more power in another area, or a little bit more growth potential.” ii Kay Krill, President and CEO of Ann Taylor Stores Corporation (ANN), was already considering this advice. Krill had been appointed President of ANN in late 2004, and succeeded to President/CEO in late 2005 when J. Patrick Spainhour retired after eight years as CEO. At that time, there had been concern among commentators and customers that the Ann Taylor look was getting “stodgy”, and the question was how to “reestablish Ann Taylor as the preeminent......

Words: 11348 - Pages: 46

Free Essay


...of SRI funds by using holding data of regular funds to create replicating portfolios. In the replicating portfolios, unethical investments are excluded according to a norm-based screening list, hence creating artificial SRI funds. The replicating portfolio returns are then used as a benchmark to compare against the SRI funds’ and regular funds’ returns. Results from the study indicate that an exclusion of companies according to norm-based screening can improve a fund’s performance. However, when looking specifically at the fund management of SRI funds, the results point towards inferior performance compared to regular funds. Key Words: Socially Responsible Investment (SRI) funds, ethical investments, holding data analysis, norm-based screening PhD Stefan Engström 13:15-15:00, December 14, 2007 Room 349, Stockholm School of Economics Tutor: Presentation: Venue: * ** H.C. Stenström and J.J. Thorell ACKNOWLEDGEMENTS Special thanks to tutor PhD Stefan Engström for all support and guidance. Thank you for providing your time and expertise to make this study possible. Daniel Berglund, SSE Alumni Ida Bohman, Banco Fonder Emma Ihre, Ethix SRI Advisors Mia Karlsson, SSE Alumni Wolfgang Meyerhoffer, Finansinspektionen Peter Norman, Sjunde AP fonden Helena Olander, Banco Fonder Johan Peterson, SSE Alumni Mauritz Redin, Banco Fonder Andrei Simonov, SSE Department of Finance Emma...

Words: 18153 - Pages: 73

Premium Essay


...C H A P T E R A Further Look at Financial Statements o STUDY OBJECTIVES 2 T H E N AV I G AT O R I I I I  Scan Study Objectives Read Feature Story Read Preview Read text and answer Before You Go On p. 58 p. 63 p. 69 p. 72 p. 75 Work Using the Decision Toolkit Review Summary of Study Objectives Work Demonstration Problem Answer Self-Study Questions Complete Assignments I I I I After studying this chapter, you should be able to: 1 meaning N Explain the principlesof generally accepted accounting and describe the I basic objective of financial reporting. F E AT U R E S T O R Y 2 qualitative N Discuss theinformation.characteristics of accounting 3 N Identify two constraints in accounting. 4 N Identify the sections of a classified balance sheet. 5 compute ratios N Identify andprofitability. for analyzing a company’s 6 N Explain the relationship between a retained earnings statement and a statement of JUST FOOLING AROUND? Few people could have predicted how dramatically the Internet would change the investment world. One of the most interesting results is how it has changed the way ordinary people invest their savings. More and more people are spurning investment professionals and instead are striking out on their own, making their own investment decisions. Two early pioneers in providing investment information to the masses were Tom and David Gardner, brothers who created an online investor bulletin board called the Motley Fool. The name comes...

Words: 20029 - Pages: 81

Premium Essay


...An Integrated Approach to Strategy Running Case Featuring Wal-Mart Wal-Mart’s Competitive Advantage (Chapter 1) ● Working Conditions at Wal-Mart (Chapter 2) ● Wal-Mart’s Bargaining Power over Suppliers (Chapter 3) ● Human Resource Strategy and Productivity at Wal-Mart (Chapter 4) ● How Wal-Mart Became a Cost Leader (Chapter 5) ● Wal-Mart’s Global Expansion (Chapter 6) ● WalMart Internally Ventures a New Kind of Retail Store (Chapter 8) ● Sam Walton’s Approach to Implementing Wal-Mart’s Strategy (Chapter 9) Strategy in Action Features A Strategic Shift at Microsoft (Chapter 1) ● The Agency Problem at Tyco (Chapter 2) ● Circumventing Entry Barriers into the Soft Drink Industry (Chapter 3) ● Learning Effects in Cardiac Surgery (Chapter 4) ● How to Make Money in the Vacuum Tube Business (Chapter 5) ● The Evolution of Strategy at Procter & Gamble (Chapter 6) ● Diversification at 3M: Leveraging Technology (Chapter 7) ● News Corp’s Successful Acquisition Strategy (Chapter 8) ● How to Flatten and Decentralize Structure (Chapter 9) Practicing Strategic Management Application-based activities intended to get your students thinking beyond the book. Small-Group Exercises Short experiential exercises that ask students to coordinate and collaborate on group work focused on an aspect of strategic management. Exploring the Web Internet exercises that require students to explore company websites and answer chapter-related questions. Designing a Planning System (Chapter 1)......

Words: 223966 - Pages: 896

Premium Essay

Essential of Strategic Management

...An Integrated Approach to Strategy Running Case Featuring Wal-Mart Wal-Mart’s Competitive Advantage (Chapter 1) ● Working Conditions at Wal-Mart (Chapter 2) ● Wal-Mart’s Bargaining Power over Suppliers (Chapter 3) ● Human Resource Strategy and Productivity at Wal-Mart (Chapter 4) ● How Wal-Mart Became a Cost Leader (Chapter 5) ● Wal-Mart’s Global Expansion (Chapter 6) ● WalMart Internally Ventures a New Kind of Retail Store (Chapter 8) ● Sam Walton’s Approach to Implementing Wal-Mart’s Strategy (Chapter 9) Strategy in Action Features A Strategic Shift at Microsoft (Chapter 1) ● The Agency Problem at Tyco (Chapter 2) ● Circumventing Entry Barriers into the Soft Drink Industry (Chapter 3) ● Learning Effects in Cardiac Surgery (Chapter 4) ● How to Make Money in the Vacuum Tube Business (Chapter 5) ● The Evolution of Strategy at Procter & Gamble (Chapter 6) ● Diversification at 3M: Leveraging Technology (Chapter 7) ● News Corp’s Successful Acquisition Strategy (Chapter 8) ● How to Flatten and Decentralize Structure (Chapter 9) Practicing Strategic Management Application-based activities intended to get your students thinking beyond the book. Small-Group Exercises Short experiential exercises that ask students to coordinate and collaborate on group work focused on an aspect of strategic management. Exploring the Web Internet exercises that require students to explore company websites and answer chapter-related questions. Designing a Planning System (Chapter 1)......

Words: 223966 - Pages: 896

Premium Essay


...Learning with Cases INTRODUCTION The case study method of teaching used in management education is quite different from most of the methods of teaching used at the school and undergraduate course levels. Unlike traditional lecture-based teaching where student participation in the classroom is minimal, the case method is an active learning method, which requires participation and involvement from the student in the classroom. For students who have been exposed only to the traditional teaching methods, this calls for a major change in their approach to learning. This introduction is intended to provide students with some basic information about the case method, and guidelines about what they must do to gain the maximum benefit from the method. We begin by taking a brief look at what case studies are, and how they are used in the classroom. Then we discuss what the student needs to do to prepare for a class, and what she can expect during the case discussion. We also explain how student performance is evaluated in a case study based course. Finally, we describe the benefits a student of management can expect to gain through the use of the case method. WHAT IS A CASE STUDY? There is no universally accepted definition for a case study, and the case method means different things to different people. Consequently, all case studies are not structured similarly, and variations abound in terms of style, structure and approach. Case material ranges from small caselets (a few......

Words: 239776 - Pages: 960

Premium Essay

Business Ideas

...return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Diagram of Porter's 5 Forces   | SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry |   | THREAT OF NEW ENTRANTS Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products | | THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to  substitute -Price-performance  trade-off of substitutes |   | BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives | DEGREE OF RIVALRY......

Words: 16997 - Pages: 68

Free Essay

Patent Law Outline

...Utlity/Novelty /Non-Obvious 38 Priority 39 Statutory Bars 40 Infringement 41 Defenses 43 Remedies 44 Trade Secrets 46 IP In General I. Origins a. Patents began in Venice b. Copyright began in England - Publisher competition c. Trademarks - Guild System would mark the bottom of product so that people would know from whom they were purchasing II. Federal Authority a. Copyright/Patent Authority Article I Sec.1 cl. 8 i. “Progress of science and useful arts” 1. Science is copyright, and useful arts is patents 2. In the days of the Constitution means “knowledge.” ii. Utilitarian clause – not based on the moral rights iii. Most protection is pretty much on federal level. iv. Certain States with particular businesses adopted their own laws, which Congress eventually incorporated into federal law (e.g. CA sound recording) b. Trademarks ( Commerce power – basis for federal system i. Prevents consumer confusion and protects information assets – tells people who is making the goods ii. Historically, there was only state TM law, but people starting producing things in different states causing consumer confusion iii. Most trademark cases...

Words: 34600 - Pages: 139

Premium Essay

Benetton and Zara

...Títol: Benetton and Zara information systems:a comparative analysis Volum:I de I Alumne: Chiara Pirone Director/Ponent:Jose M.Cabré Garcia Departament:Organización de Empresas Data: 28 Junio 2010 DADES DEL PROJECTE Títol del Projecte:Benetton and Zara information systems:a comparative analysis Nom de l'estudiant:Chiara Pirone Titulació:Ingenieria superior Informatica Crèdits: 37.5 Director/Ponent:Jose M.Cabré Garcia Departament:Organización de Empresas MEMBRES DEL TRIBUNAL President:Ferran Sabate Carriga Toma de decisiones y gestión de proyectos empresariales(PDGPE) Vocal:Francesc Tiñena Salvañà Compresion de datos e imagen (CDI) Secretari:Jose M. Cabré Garcia Empresa y entorno economico(EEE) QUALIFICACIÓ Qualificació numèrica: Qualificació descriptiva: Data: INDEX CHAPTER 1: INTRODUCTION CHAPTER 2: VERTICAL INTEGRATION 2.1. VERTICAL INTEGRATION 2.2:  THE  THREE  A’S  OF  A  SUPPLY  CHAIN  EXCELLENCE 2.2.1: AGILITY 2.2.2: ADAPTABILITY 2.2.3: ALIGNMENT 2.3:  PORTER’S  ANALYSIS 2.4: EXAMPLES: WAL-MART AND DELL CHAPTER 3: THE SYSTEM LOCK-IN 3.1 THE DELTA MODEL 3.2: THE SYSTEM LOCK-IN 3.3: EXAMPLE: FORD MOTOR CO 3.3.1: FORD MOTOR CO LOCK-IN CHAPTER 4 : ZARA 4.1 ZARA’S  HISTORY 4.2 BUSINESS MODEL 4.2.1:  PORTER’S  ANALYSIS  ON  ZARA 4.2.2 PRODUCT LIFE CYCLE CURVE 7 9 9 13 15 16 17 19 30 36 36 39 41 42 45 45 47 47 49 1 4.2.3: KEY FACTORS OF SUCCESS 4.2.4: STRATEGIC DRAWBACKS 4.2.5: LOGISTICS AND SUPPLY CHAIN 4.2.6: STRATEGY 4.2.7: OPPORTUNITIES 4.3 THE......

Words: 43564 - Pages: 175

Free Essay

Cap Rate

...GROWTH PROPERTIES: TO THE BRINK AND BACK December 6, 2011 Students: Yu (Cherry) Chen, Kevin Connolly, Bill Davis, Stephen Duncan, James Faello, Michael Hazinski, Noah Johnson Faculty Supervisor: Joseph L. Pagliari, Jr. Copyright © 2011 The Real Estate Group at The University of Chicago Booth School of Business All Rights Reserved This case study has been prepared solely for academic purposes. It should not be construed as a judgment about or an endorsement of any particular business matter. Moreover, the information contained herein has been obtained from sources we believe to be reliable; however, we make no representation or warranty as to its accuracy. TABLE OF CONTENTS EXECUTIVE SUMMARY ...................................................................................................... - 1 GENERAL GROWTH BACKGROUND ............................................................................ - 7 2004: A Historic Year for General Growth........................................................................ - 9 2005-2006: Secured Mortgages and Increasing Debt ..................................................... - 16 Simon vs. GGP - Capital Markets Strategy ..................................................................... - 24 IMPACT OF THE CREDIT CRISIS .................................................................................. - 31 GGP Faces Liquidity Challenge......

Words: 37589 - Pages: 151

Premium Essay

The Intelligent Investor

...THE INTELLIGENT INVESTOR A BOOK OF PRACTICAL COUNSEL REVISED EDITION B E NJAM I N G RAHAM Updated with New Commentary by Jason Zweig To E.M.G. Through chances various, through all vicissitudes, we make our way. . . . Aeneid Contents Epigraph iii Preface to the Fourth Edition, by Warren E. Buffett viii A Note About Benjamin Graham, by Jason Zweig x Introduction: What This Book Expects to Accomplish COMMENTARY ON THE INTRODUCTION 1. 1 12 35 The Investor and Inflation 47 COMMENTARY ON CHAPTER 2 3. 18 COMMENTARY ON CHAPTER 1 2. Investment versus Speculation: Results to Be Expected by the Intelligent Investor 58 65 COMMENTARY ON CHAPTER 3 4. A Century of Stock-Market History: The Level of Stock Prices in Early 1972 80 General Portfolio Policy: The Defensive Investor 88 COMMENTARY ON CHAPTER 4 5. 101 124 Portfolio Policy for the Enterprising Investor: Negative Approach 133 COMMENTARY ON CHAPTER 6 7. 112 COMMENTARY ON CHAPTER 5 6. The Defensive Investor and Common Stocks 145 iv 155 COMMENTARY ON CHAPTER 7 8. Portfolio Policy for the Enterprising Investor: The Positive Side 179 The Investor and Market Fluctuations 188 v Contents COMMENTARY ON CHAPTER 8 9. Investing in Investment Funds COMMENTARY ON CHAPTER 9 213 226 242 10. The Investor and His Advisers 257 COMMENTARY ON CHAPTER 10 272 11.......

Words: 224262 - Pages: 898