2013年8月23日星期五

Is not an end, but a tactical approach

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Wal-mart's e-commerce goal is in the long run, rather than replace its physical store structure, but to build a meaningful revenue stream, flexibility to adjust action as a lever to the rest of the deposit business. The company's current business model into a net profit margin is very predictable, in any given quarter range between 3% and 4%. With the increase of online sales significantly, the company may improve margin for their shareholders in a meaningful way.
The concept is similar to a class of mainly by the manufacturer, referred to as "cost - number - profit", or CVP analysis to make decisions. When A company use CVP to determine, in A given period of time, covering all the fixed cost and variable cost, and the organization is at or above the breakeven point. As a manufacturer, once you've written a check building rent, utilities, insurance, salary, etc. During the month, you have more flexibility, based on its profit ability to accept or reject the order.
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In addition, once you hit your expected profit of the month, you can be more aggressive pricing to attract more sales profits, from this point, all the incremental - the gravy, if you like. Wal-mart's e-commerce will be the company to promote more sales per month to increase its profits.
Please note that this is a completely different business model of online rival Amazon.com (NASDAQ: AMZN), it is current allowance of sacrifice, to scale is more and more large retailers, in some uncertain commitments consistent profits in the future.

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