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Comparison between two retail companies picked are Walmart and Costco

The two retail companies picked are Walmart and Costco whose 2017 Financial statement links are provided below: WALMART https://www.nasdaq.com/symbol/ wmt/financials?query=income- statement COSTCO https://www.nasdaq.com/symbol/ cost/financials?query=income- statement Both organizations are well known brands and position themselves well with their customer base. Walmart’s value proposition is “We save people money so they can live better”. On the other hand, Costco’s value proposition is “All-in-one convenience and everyday affordability”. Both retailers focus on cost saving for their customers. Looking at their financial statements and by analyzing them a few key areas are evident when comparing the two organization. Looking at the current ratio and quick ratio we can determine the short-term solvency of each organization. The current ratio can be determined by dividing the assets by the liabilities. Walmart’s current ratio sits at 0.86 while Costco’s sits at 0.99. The quick ratio is c...
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How important is the reputation of a business?



The reputation of the company is increasingly recognized as the most important strategic asset in terms of value creation. Scientists' interest in the reputation of the company has increased the number of scientific papers and studies published over the last decade (Barnett and al., 2016).

A reputation of a company is crucial for the survival of a company. Reputation is defined as the judgement people make about a company in terms of finance, performance, social and environmental impact. Reputation has a direct impact on its customers and helps to build relationship with the customers and target audience. A good business reputation facilitates growth in valuable relationships which builds the entire business entity.   

How important is CEO's reputation to the reputation of the business itself?

CEO reputation is very important for leadership. The employees build their trust based on the CEO reputation. If the employee trust is built, then their morale and productivity increases. Customer’s perception on quality is based on the CEO reputation. The growth and fall of an organization are purely based on the CEO reputation. The customer-company relationship increases based on the CEO reputation. Companies trade on the high profile reputed CEOs for acquisitions and mergers.

Is it better to have the reputation of being powerful or of being fair? For example, do you want to be insured by a company that always wins, or by an insurance company that is willing to allow the benefit of any doubt?

Personally speaking, it is important for an organization to have reputation of being fair rather than being powerful. This is because people always wanted to be treated with fair and just. If a company always wins with power, then there is a group of people who loses and hence they contribute more towards the negative growth of the company. Thus fairness is always good for the management.

Goodwill is the technical word for the asset of a company being worth more than the sum of its parts. How would you measure the Goodwill of a company in dollar figures?

Goodwill is the market value of a company. If a company is making a purchase of another business entity, then the goodwill of the business entity needs to be added to the fair market value of the business or its assets. Then liability needs to be subtracted from this total sum. Thus, goodwill can be got in dollar value if this concept is used.

“Assumed value of the attractive force that generates sales revenue in a business, and adds value to its assets. Goodwill is an intangible but saleable asset, almost indestructible except by indiscretion.” (BusinessDictionary, (n.d), para. 1).



Sources:

Aaron, R. (2017). CEO reputation vs. corporate reputation. Retrieved from: https://www.communication-director.com/issues/strategy-and-cco/ceo-reputation-vs-corporate-reputation#.W2lF6ygzY54

Alva Group. (2017).  CEO Reputation vs. Corporate Reputation. Retrieved from:  http://www.alva-group.com/en/case-study/what-is-the-relationship-between-ceo-profile-and-corporate-reputation/

Andrew, M. (2015). Why high-profile CEOs may produce better results. Retrieved from: https://www.managementtoday.co.uk/why-high-profile-ceos-may-produce-better-results/article/1360117

Business Goodwill definition: http://www.businessdictionary.com/definition/goodwill.html

Business Goodwill. ValuAdder. Retrieved from: http://www.valuadder.com/glossary/business-


James, B. (2012). Business Ethics. V.1. Retrieved from: http://2012books.lardbucket.org/books/business-ethics/index.html

Nathalie, M., Serban, T. (2012). The reputation of your company: is your most strategic asset in danger? Retrieved from: https://www.cirano.qc.ca/pdf/publication/2012RB-02.pdf

Porter, M. (2008) The Five Forces that Shape Strategy. Harvard Business Review. Retrieved from: https://mgmt4001winter2012.wikispaces.com/file/history/The+Five+Competitive+Forces+That+Shape+Strategy.pdf


Spender, J. & Kraaijenbrink, J. (2010). Why Competitive Strategy Succeeds—and with Whom. In: Huggins, R. and Izushi, H. (Eds.) ‘Competition, Competitive Advantage, and Clusters: The Ideas of Michael Porter’, Oxford University Press: New York.  Retrieved from: http://kraaijenbrink.com/wp-content/uploads/2012/06/Why-competitive-strategy-succeeds-Spender-Kraaijenbrink-15-12-2009.pdf

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