Best Product Deals

31/08/2022

30/08/2022

The figures shows that Walmart is currently performing at a revenue of 5.36 times its
benchmark competitor and with a net income that is 6.41 times. By 2025, the forecast suggests
that Walmart's revenue will be 6.4 times with a net income that would be 7.12 times the
synthetic competitor. However, this scenario is quite different for Amazon.

29/08/2022

To build the forecast for Walmart and Amazon from the historical data, we projected their
revenue and income trends for 10 years into the future based on the data from the 10 years. We
limited the historical basis to the last 10 years to ensure we only take into account the
performance considerations associated with the recent choices of each of the firms. We used a
linear forecasting model which showed an R-sq of 0.97 and 0.91 for Walmart and Amazon,
respectively. Although we found the R-sq to be somewhat higher in the case of the polynomial
model, we used the linear model for simplicity.

28/08/2022

Next, we projected the expected future behavior of each firm (Walmart and Amazon) as well as
of their synthetic competitors. In the case of the firm, we relied on their historical performance
to forecast the future performance. This is consistent with the idea of ‘path dependency’ which
suggests that firms are constrained by their historical choices and their future actions will be
not too different from their history.

27/08/2022

To develop a firm that is completely identical in terms of its sources of revenues, we averaged
the performance of the top three competitors for Walmart and Amazon shown earlier. Once the
average performance was established for each category, we created a weighted average of the
competition based on the proportion of revenues from each category. The resulting
performance represents a benchmark for Walmart (across its five major categories) and
Amazon (across its ten major categories).

25/08/2022

As the product category-wise distributions indicate, there are significant differences between Walmart and
Amazon in terms of the source of their revenues. These differences suggest that the market outlook of
Walmart is likely to be different than the outlook for Amazon. The two firms are not completely comparable.
This requires some way to establish and apples-to-apples comparison whereby the performance of Walmart
is compared to a synthetic competitor with similar revenue streams (i.e. product categories) and the
performance of Amazon to its own synthetic competitor. T