SUPPLY CHAIN DRIVERS AND METRICS: WALMART vs AMAZON

The case study is a comparison of the financial metrics used in performance management between Walmart and Amazon. Both companies are well-renowned retail companies, though their presence is within different areas. Walmart, unlike Amazon, is a brick-and-mortar company based in the US with over 2 million employees and the largest company when referred to in revenues. Below is a snippet of their performance from their recent financials, showing their ROI and ROA:

On the other hand, Amazon is an online retailer that offers programs to sellers to sell their products on their branded online websites, and allows the world to have a global online store. Although not having the same size and capacity as Walmart, Amazon can be classed as a close competitor in some aspects of the business. Below is a snippet of their financials, management metrics for their ROI and ROA:

In Question 1, we are asked to calculate some metrics, and some results are as follows:

In Question 2, we notice that Amazon performs better in the following metrics:

·         Return on Equity – indicates that Amamzon is is generating a considerable and positive amount of profits from its shareholder capital.

·         Return on Finacial Leverage – due to its acquisitions it has an increased/high leverage as compared to Wlamart.

·         Profit Margins – high margins show a positive in the profits exceeding the costs of the business, allowing us to assume Amazon is able to break-even.

Walmart performs better in the following, compared to Amazon:

·         Return on Equity

·         Return on Finacial Leverage

·         Acounts Payable turnover

·         Return on Assets

The supply chain drivers which may aid in explaining the diffrences in performance would be:

 

By: Tinotenda Gova