Operations Workshop 2006
to Godzilla: Evidence on the operational and financial impact
of being a major supplier to Wal-mart"
Randall, Michael Lemmon and Perry Solheim
past 15 years, Wal-mart has steadily increased its market
share and market power. Improved operational efficiency often
receives part credit for Wal-mart’s success. Claims
in the popular press suggest that the improved efficiency
may come at the expense of suppliers. However, recent theory
posits that Wal-mart has incentives to share efficiency gains
with suppliers. We offer evidence to this discussion by examining
the operational and financial performance of publicly traded
suppliers to Wal-mart. In this group of suppliers, we examine
trends in inventory performance, gross margins, collections,
accounting returns and stock market returns.
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