In this photo illustration a Walmart stock trading chart seen displayed on a smartphone screen. (Photo … [+]
Disney (DIS) networks became inaccessible in early September for 15 million cable television subscribers nationwide. An operating partner disputes Disney’s retransmission fees. Not surprisingly, ripping off customers is a bad business model.
Longer term investors should accumulate Walmart
WMT
Traditional businesses are under siege globally. Software enables innovative, agile businesses to quickly gain a foothold and dominate.
The automotive sector is being emptied of its substance by You’re here
TSLA
Netflix
NFLX
Cord cutting is at the center of Disney’s breakdown.
Charter Communications
CHTR
Variety reported In May, U.S. pay-TV subscriptions fell to 75.5 million in the first quarter of 2023, down 7% year-over-year to the lowest level since 1992. Analysts attributed the decline to higher costs of ESPN’s retransmission fees.
Price gouging has become a go-to strategy for failing traditional businesses in the era of digital transformation.
The Ford F-150 is the best-selling vehicle in America. The median price increased from $49,831 in 2019 to $77,040 in 2023, according to data has US News & World Report. That’s three times the rate of inflation. It should be noted that vehicles in the automotive sector are rise faster than inflation, even if sales volumes contract. The exception is Tesla, whose prices are falling despite rising sales.
Leaders of traditional businesses need to think more about customers.
Walmart (WMT) operates 11,500 stores under 72 brands in 28 countries. The company based in Bentonville, Ark., achieved sales of $572.8 billion in 2022. Sales in 2023 are expected to reach $611.3 billion, an increase of 6.8%. Walmart is a historic company, but its executives have not resorted to price gouging to curry favor with investors. They responded to the disruptions of Amazon.com (AMZN) with a forward-looking vision and commitment to customers. They leveraged Walmart’s inherent strength; stores.
Ninety percent of Americans live within 10 miles of a Walmart. It turns out that customers like to order products online and then pick up the bagged items in stores. This omnichannel, click and collect strategy gives consumers control and lower prices.
Click and Collect e-commerce orders in 2021 reached $20.4 billion. Walmart accounted for 25% of those purchases, according to Brett Briggs, chief financial officer.
Briggs was the architect of an aggressive e-commerce acquisition strategy. Jet.com, Bonobos, Eloquii and Modcloth were purchased for $3 billion, $310 million, $100 million and $60 million, respectively. However, the buyout took place in 2016, when Walmart spent $16 billion to acquire a 77% stake in Flipkart, India’s largest e-commerce company. The leaders then spent $1.4 billion in 2023 for additional Flipkart shares.
Not all traditional businesses will succeed in their digital transformation. Too often, their strategies are wrong. Executives place short profits above winning customers. At a stock price of $161.57, Walmart stock is attractive in the event of a pullback toward $140. Investors should accumulate stocks amid weakness.
Are you ready to take control of your financial future? OUR Strategic Advantage Newsletter provides the information and guidance you need to succeed. Try it now for just $1!