2. Industry Sector & the NAICS 2 Digit Code The Sector as a Whole: The Retail Trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise; retailers are, therefore, organized to sell merchandise to the general public. Store retailers operate fixed point-of-sale locations, located and designed to attract a high volume of walk-in customers. In general, retail stores have extensive displays of merchandise and use mass-media advertising to attract customers. They typically sell merchandise to the general public for personal or household consumption, but some also serve business and institutional clients. Source: http://www.naics.com/ 44-45 NAICS 2 Digit Code: Retail Trade Industry Sector:
3. Industry Sub-Sector & the NAICS Code This industry comprises establishments known as warehouse clubs, superstores or supercenters primarily engaged in retailing a general line of groceries in combination with general lines of new merchandise, such as apparel, furniture, and appliances. Source: http://www.naics.com/ 452910 NAICS Code: Warehouse Clubs & Supercenters Industry Sub-Sector:
5. Discount Industry & the NAICS Code This U.S. industry comprises establishments known as department stores that have central customer checkout areas, generally in the front of the store, and that may have additional cash registers located in one or more individual departments. Department stores in this industry sell a wide range of general merchandise (except fresh, perishable foods). Source: http://www.naics.com/ 452112 NAICS Code: Discount Department Stores Industry Sub-Sector:
6. Discount Department Stores (452112) Source: http://www.naics.com/
7. Warehouse Clubs & Supercenters (452910) + Discount Department Stores (452112) Combined Since Wal-Mart belongs to both Sub-Sectors, Wal-Mart data will be compared to the total of both NAICS codes 452910 & 452112 Source: http://www.naics.com/
8. Wal-Mart Source: www.walmart.com
9. Wal-Mart’s performance relative to Warehouse Clubs & Discount Stores In 1997 Wal-Mart contributed 50% of the Sub Sector’s overall Sales. (Warehouse Clubs - 452910 & Discount Stores - 452112 ) By 2002 Wal-Mart sales grew to 66% of the Sub Sector’s overall Sales. Source: http://www.naics.com and www.walmart.com /
10. Market Share & HHI ENTERPRISE MARKET SHARE Let's begin at the beginning. A two year time frame (2006-07) was used because their fiscal years have different closing dates. The fiscal years of Mal-Mart (WMT) and Sears (SHLD) closed in early 2007 while those of Costco (COST) and Target (TGT) closed in late 2006. The companies generated $456.6 billion in combined sales revenues. Wal-Mart's share was 62.2 percent of group revenues. The market shares of its three competitors were 13.2, 13.0 and 11.6 percent. Source: http://www.customersandcapital.com/book/walmart/
12. HHI The higher the index, the more concentration and (within limits) the less open market competition. A monopoly, for example, would have an HHI index of 10,000, the maximum score. If the 4 company’s had an equal share of 25% the HHI index would be 2500, with no particular company having a higher concentration over the others. Based on these parameters an HHI index of 4235.28, the Discount Department and Warehouse Clubs industry would be considered low to mid concentrated with Wal-Mart having the majority of share. Source: http://www.oligopolywatch.com/2003/08/15.html
13. Wal-Mart’s Performance Relative to Competitors within the same Sub-Sectors Source: http://www.smartmoney.com/stock-quote/?referrer=/marketmap/index.cfm&story=competition&symbol=WMT
14. Travel Agencies <ul><li>NAICS code: 561510 </li></ul><ul><li>This industry comprises establishments primarily engaged in acting as agents in selling travel, tour, and accommodation services to the general public and commercial clients. </li></ul><ul><li>The travel agency industry has been seeing a decline in both sales (-6%) and # of establishments (-26%). The decline is sales from ‘97 to ’02 can be attributed to the slight 2001-02 recession in the US economy after the dot com bubble burst and 9/11 terrorist attacks. The number of establishments has decreased due to the popularity and convenience of e-ticketing options. </li></ul>Source: http://www.naics.com/
15. <ul><li>NAICS code: 511130 </li></ul><ul><li>This industry comprises establishments known as book publishers. Establishments in this industry carry out design, editing, and marketing activities necessary for producing and distributing books. These establishments may publish books in print, electronic, or audio form. </li></ul><ul><li>There has been an increase in both sales and # of establishments from ‘97 to ‘02. The outrageous cost of college books must be contributing to the increase in sales. </li></ul>Book Publishing
16. Book Publisher’s & Travel Agency’s Sales & No. of Establishments Compared.
17. Industry Life Cycle Based on the competitive and comparative analysis (Sales, # of establishments, growth rates) I would place Discount Stores in the low to mid section of The Maturity stage in the Industry Life Cycle, Book Publishers in the mid to high Maturity stage and Travel Agency's in the mid Decline stage.