GLOBAL
INVESTING 2000
A
Guide to the Best Stocks in the World
Nokia
Corp.
|| Cisco
Systems
|| AXA
Vodafone
Air Touch
|| Wal-Mart
Stores
Andrew Leckey,
nationally syndicated columnist has written his fifth book on
investing Global Investing 2000: A Guide to the 50 Best Stocks
in the World, published by Warner Books. Leckey is also the
reporter for the Quicken.com Money Reports, syndicated to TV
stations around the country. Leckey received the "Distinguished
Service Award in Investment Education" from the National
Association of Investors Corp., which sponsors thousands of investment
clubs around the world. Leckey's columns appear regularly in
The Bull & Bear Financial Report.
In his latest book, Leckey focuses
on international companies likely to shine for investors in the
new century. Leckey examines the new type of corporate leadership
sweeping the globe and reveals how readers can adopt a global
strategy for their personal portfolios.
Profiled below are 5 of the 50
international companies featured in "Global Investing 2000":
Finland's Nokia Corp., the world's largest maker of cell
phones whose stock is traded in the U.S. as an American Depositary
Receipt; Cisco Systems, the high-tech giant dedicated
to connecting the Internet worldwide; the French financial services
company AXA, an unfamiliar giant that owns well-known
American investment and insurance firms, whose stock is available
in the U.S. as an American Depositary Receipt; the telecommunications
powerhouse Vodafone AirTouch Plc. of the United Kingdom,
which boasts 31 million mobile-phone customers on five continents
whose shares are available in the U.S. as American Depositary
Receipts; and the famous retailer Wal-Mart Stores Inc.,
which has expanded its domestic game plan the include the entire
world.
A walk through
the streets of Helsinki, Finland, is like nowhere else in the
world. In sharp contrast to the historic backdrop provided by
this city's ornate and imposing architecture, a carryover from
its rule by the Russia Czars from 1809 to 1917, its streets are
filled with thoroughly modern people constantly jabbering on
cellular phones.
And not just people in business
attire. Grandmothers. Children. Folks in work clothes. People
with groceries in their arms. Old men with canes. Streams of
people braving freezing temperatures and gingerly stepping around
snowbanks, all the while holding cell phones to their ears. At
one traffic light during my visit there, I counted eight people
either chatting on the phone or listening intently as we waited.
Nearly 60 percent of Finns now own cell phones, compared to 25
percent of Americans. The number of cell phones in Finland has
surpassed fixed-line phones, a precedent inspirational to all
cell phone manufacturers, but one company in particular.
Finland's
Nokia Corporation, whose stock constitutes half the asset
value of the Helsinki stock exchange, is not just No. 1 in cell
phone handset sales in its home country, but in the world. According
to research company Dataquest, Nokia now has about 23 percent
of the global market, Motorola Inc. of the U.S. around 19 percent,
and L.M. Ericsson Telephone Co. of Sweden around 15 percent.
It wrested leadership of its competitive
field from Motorola in spectacular fashion in 1998, its operating
profits up 75 percent and split-adjusted earnings per share increasing
66 percent. The company expects mobile phone penetration in a
number of countries to eventually reach 100 percent, with the
number of worldwide mobile phone users to rise from the current
300 million to more than 1 billion by the year 2003. With this
scenario firmly in mind, the company has been providing a steady
flow of slick and functional new handsets to keep things fresh
and exciting. Among a batch of recent offerings are the breakthrough
Nokia 7110 that permits Internet access and the budget-priced
3210 that's expected to attract young customers.
"An organization has the right
attitude if it is in a state of flux all the time, ready to move
and willing to be extremely flexible in adapting to competitive,
technological, and market pressures," Chairman and Chief
Executive Officer Jorma Ollila told me in an interview at Nokia's
headquarters in Espoo, a suburb of Helsinki.
A flexible, competitive, technologically-advanced
Nokia always makes sure it has appropriate handsets with the
features and style favored by specific market segment. Competitor
Motorola stuck too long with analog rather than digital technology
and rival Ericsson stalled with lackluster phone models, but
they are tough competitors and sure to fight back. Nokia strives
to stay a step ahead.
Besides shrewdly coming to the
market early with digital handsets, it correctly estimated the
size of the mobile phone market so it could meet demand and also
successfully bet on the more efficient three-volt technology,
rather than the prior six volts. It intends to stick with its
current corporate mix of 60 percent mobile phones and 40 percent
telecommunications and other products for a while. After supplying
network equipment to 78 operators in 37 countries in 1998, it
enjoyed a constant flow of significant new contracts in 1999
to provide network equipment to the likes of China's Zhejiang
Mobile Communications Co., Japan's NTT DoCoMo, Poland's PTK Centertel,
and Spain's Centre de Telecomunicacions de la Generalitat de
Catalunya.
The company also manufactures satellite
receivers, cable network systems, PC and workstation monitors,
multimedia network terminals, and loudspeaker systems for cars,
television, and audio.
The long-term outlook for Nokia
stock remains strong thanks to continued growth in worldwide
wireless subscribers, the switchover of existing cellular carriers
from analog to digital service, and the firm's proven ability
to introduce newer and higher-priced phone styles. Its impressive
resources for manufacturing many of the key components in these
phones means it can also improve gross margins.
The only reservation about Nokia
is that its excellently performing shares are at a high multiple
and the company faces tough profit comparisons.
"It's a fact of life that
we intend to grow 25 to 35 percent each year, that we have high
requirements of research and development, that our marketing
is important and that we must excel in management and logistics,"
asserted pragmatic Chief Financial Officer Olli-Pekka Kallasvuo.
"I don't spend time worrying about it."
Selling products in 130 countries,
Nokia must have worldwide research and development capabilities.
It has manufacturing centers in Finland, Dallas, and Asia (Korea
and two Chinese factories). The recently-expanded Salo, Finland,
plant that I visited has eight production lines (average age
of workers 28 years old) making several handset models, including
one for the Japanese market featuring the ultra-streamlined,
shiny platinum style popular there.
It's a very democratic operation.
"Our new production line ends close to where it begins so
everyone can see the outcome of that line," explained Riku
Luomaniemi, plant manager, as we walked the catwalk above a brightly-lit
production area the size of two football fields.
"We have no offices here,
with managers in low cubicles so everyone can see us and we can
set an example in our attitude toward work."
Globally, Europe for 57 percent
of Nokia's overall sales, Asia-Pacific 23 percent, and the Americas
20 percent. Sales growth has been strong in all regions. A visit
to Nokia's austere, businesslike headquarters and state-of-the-art
manufacturing facilities revealed a focused company which, because
its homeland only accounts for 4 percent of sales, has always
needed to aggressively reach out. The corporate culture exhibits
a relentless determination borne of Finland's long, harsh winters.
While Nokia is winning in grand style now, its greatest strength
may prove to be its endurance.
Accessing
the Internet. Sending e-mail. If you've done either lately, Cisco
Systems Inc. probably transferred the data. Almost all
information on the Internet travels across its systems. This
relatively young company has worked hard to be in the right place
at the right time in order to prosper from a new Internet economy
in which seven people gain Internet access every second, and
electronic messages outnumber regular mail by ten to one.
Cisco Systems is everywhere and
knows everyone. It built its business on a dominant market share
in selling networking equipment to large corporations and more
recently has been selling to telephone companies as well. It
has expanded its relationships with the likes of Microsoft, Hewlett-Packard,
EDS, Sprint, Fujitsu, MCI/WorldCom, Swisscom, and Japan Telecom,
while initiating strategic relationships with U.S. West, Hitachi
and NTT. In fact, Cisco has created a new group that includes
engineering, marketing, and sales, in order to focus primarily
on the development of strategic alliances.
Cisco began a campaign in 1999
to build up its consumer business, centered on a new cable modem
device and the furtherance of its relationship with AT&T
to develop a national cable modem network. It will license its
technology to other manufacturers, such as Sony, rather than
enter the home market directly. Cisco practices what it preaches
about Internet use, with its Web site for exchange of technical
information and software upgrades long providing support services
for customer care, which has led to high levels of customer satisfaction.
A dramatic success story has been
written since Cisco's initial public offering in 1990, as businesses
throughout the world have set up or upgraded their computer networks.
The company had been formed in 1984 by two Stanford University
professors, married couple Leonard Bosack and Sandy Lerner, who
came up with the idea of low-cost "routers" (devices
that transmit data from network to network despite differing
protocols and computer languages) to make it possible to exchange
data between the computer science department and the business
school. It shipped its first computer product in 1986. Since
then, it has grown into a multinational corporation with more
than 15,000 employees in over 200 offices in 54 countries.
Cisco is the biggest player in
the business, with a market position comparable to Intel's in
semiconductors and Microsoft's in software. The company has grown
50 percent faster in revenue than most other networking companies,
primarily because it's gaining market share from weaker rivals.
Cisco controls two-thirds of the market for machines that route
traffic on the Internet, which is five times the market share
of its closest competitor.
Growing through acquisitions has
been a Cisco game plan that will continue. For example, in 1999
it bought GeoTel Communications Corporation, which makes software
for routing telephone callers to big companies' least busy call
centers, for $2 billion.
An important product in which it
holds 85 percent of the market is the multiprotocol router that
allows data communication between distant computer networks that
would otherwise be incompatible. Cisco also makes software that
supports its routers, connects to the Internet, and provides
network management, diagnostic, and security capabilities. The
firm sells its products worldwide to computer-equipment producers
who resell them under private labels to network users. Products
are sold in 90 countries and foreign sales account for more than
40 percent of total sales.
Its high-profile, high-energy leader,
John Chambers, wants to avoid the complacency that has led some
prior technology giants to fall by the wayside when they strayed
too far from their customers and their employees. Chambers energetically
spends more than 40 percent of his time on the road, meeting
with customers each day and typically wrapping up his activities
by taking out local Cisco employees for pizza and beer.
"We've never been better positioned
to lead in the Internet economy," Chambers told securities
analysts in early 1999, voicing his expectation that the company
can grow 30 to 50 percent annually, at least through 2002, despite
global economic concerns and increased competition. Cisco serves
customers in three target markets:
Enterprises, those large organizations
with complex networking needs that usually involve multiple locations
and types of computer systems. Enterprise customers include corporations,
government agencies, utilities, and educational institutions.
For example, more than 500,000 Federal Express customers are
on line with the help of a Cisco-based network. Fed Ex launched
its "VirtualOrder" service, providing customers with
a turnkey virtual marketplace on the Internet.
Service providers, which are companies
that provide information services, including telecommunication
carriers, Internet service providers, cable companies, and wireless
communication providers. An example is British Telecommunications
Plc., which uses Cisco products in providing managed network
services for many of Britain's largest companies. Firms with
as many as 2,000 locations can contract with BT, which will design,
own, and operate the network on their behalf.
Small/Medium business, the companies
with a need for data networks of their own, as well as connection
to the Internet and business partners. For instance, 29-employee
Caster Technology Corporation in Garden Grove, CA uses its Cisco
network to market its caster, wheel, and hand-truck products.
A network links the headquarters with its three remote locations,
enabling a virtual warehouse so employees can provide customers
with real-time pricing and availability of products from any
warehouse or supplier.
The company has endless opportunities
to expand even further globally. Cisco's revenues currently break
down to around 60 percent from the U.S., 30 percent from Europe
and 10 percent from Asia, but the latter category is dramatically
on the rise as more people in that region get hooked on the Internet.
Cisco's Asian business has been growing at a 40 percent clip
despite the economic woes there and the company, in 1999, put
a $40 million Asian expansion plan into effect to make it happen
even faster.
AXA,
Paris France: This giant company with a name that sounds like
alphabet soup is a global power in asset management and life
insurance that is constantly expanding its empire. Yet investors
who know plenty about its individual businesses are unaware of
the parent organization itself.
AXA, the world's third-largest
insurer in terms of revenue, is also the world's third-largest
asset manager with more than $600 billion under its control.
In addition, it is France's largest non-life insurer and third-largest
life insurance firm. In the United States it can do plenty of
name-dropping, for it own 60 percent of the Equitable Companies
insurance organization (recently renamed AXA Financial Inc.),
which in turn owns 73 percent of the Donaldson, Lufkin &
Jenrette investment bank and 58 percent of the Alliance Capital
Management fund company.
The ever-aggressive parent company
AXA operates in 50 countries. It increased its stake in Belgium's
Royale Belge insurer to 98.7 percent in 1998 and won the fierce
bidding for Guardian Royal Exchange, Britain's fifth-largest
insurer, for $5.67 billion in 1999. Both are considered stepping
stones in its quest to be the world's foremost insurance company.
Having previously emphasized the purchases of insurers with blighted
investment portfolios that it was convinced it could turn around,
it is most recently said to be eyeing potential acquisitions
in the Japanese and U.S. insurance markets.
"The big advantage of being
global is that you spread your risk all around the world,"
AXA Chairman and Chief Executive Officer Claude Bebear, nicknamed
"crocodile Claude" for his relentless acquisition pace
during the 1980s, told Chief Executive magazine in April 1999.
The flamboyant Bebear became convinced of the importance of both
international business and the need to emphasize profits when,
as a young man, he spent time in Canada setting up a life insurance
branch for the small French insurance firm Ancienne Mutualles.
He would one day head that company, inject what he terms an "Anglo-Saxon"
attitude toward shareholder value, and rename it AXA in order
to sound less regional.
Describing himself as a "classical,
market-oriented liberal," he has circled the globe explaining
his strategy for growth while stressing how important each part
of the world can be in effectively pulling it all together. His
corporate philosophy is one of decentralized management, encouraging
local managerial talent to work as it knows best in various countries.
He believes that life insurance and asset management are converging
in the modern world and is a player in the inevitable consolidation
process that is underway.
Bigger claims, after all, require
companies with more capital. Scheduled to retire in 2000, Bebear
most likely will be replaced by similarly aggressive Senior Vice
President Henri de Castries, a man who has compared today's asset
management business to the gold rush in California where the
most efficient players ultimately dominated. Outside the office,
Bebear and de Castries are often hunting partners.
The company has gained the often
fickle attention of Wall Street analysts based on what some of
them believe will be a strong 19 percent average annual earnings
per share growth rate through the year 2002 with only medium
risk for its investors. Earnings were up significantly in 1998
due to sharply higher life insurance earnings in the U.S., Great
Britain and Asia that were in keeping with bullish expectations.
Further improvement in French life insurance earnings and strong
growth from both Equitable and Sun Life should give a boost to
future results and put AXA on a course to equal the superior
profitability of rival American International Group.
While Bebear is committed to developing
systems on the Internet to help sell insurance, he maintains
it would be a big mistake to push too hard and destroy traditional
professional networks in the process. His use of the Internet
is therefore to augment the work of professional agents, not
supplant them. He has also worked hard to speed the computerization
of all AXA's businesses in order to reduce costs.
The result of the merger of AXA
and the once state-owned French insurer UAP in 1996, the company
quickly cut 2,500 UAP insurance agents from its rolls and moved
quickly to consolidate, a daunting process it has already completed.
AXA had acquired the then-troubled
and certainly undervalued Equitable Life in 1991 at a bargain
price of $1 billion and worked hard to successfully turn around
its earnings. It was a bold gamble that paid off. Staffing was
cut by 4,000 and annual premium and deposit growth soon reached
a steady 20 percent a year pace, which is where AXA expects it
to continue. Variable annuities have been a particularly hot
product.
The goals are to expand its distribution
system, broaden its product line, and gain more upscale customers.
Financial planning efforts in which insurance agents can also
plan and sell securities is its one-stop shopping motif. Equitable's
popular "financial fitness profiles" tailored to individual
clients have already resulted in higher sales and stronger customer
loyalty.
The Midwest and West portions of
the U.S. have especially been targeted by Equitable for growth.
Meanwhile, the Donaldson, Lufkin & Jenrette investment bank
is an aggressive full-service provider in the U.S. and selected
overseas markets. DLJ also boasts much-respected and profitable
on-line brokerage DLJdirect, which has benefited from the rush
toward trading on the Internet, and its Pershing unit, which
has turned in record profits in processing services. Alliance
Capital Management is the 18th-largest U.S. mutual fund company
at more than $119 billion in assets, but has more than twice
that impressive amount under management for big clients such
as pension funds, financial institutions, and banks.
An array of valuable antiques and
collector hunting rifles in AXA's headquarters near the Champs
Elysee in Paris indicates Bebear's reverence for the past. But
his mindset, and that of his enormous global company, is full
speed ahead. Progress will continue to come from taking risks
and buying assets cheaply.
Vodafone
AirTouch Plc., Newbury, United Kingdom: Forget the Beatles.
The latest British invasion of U.S. shores carried a price tag
of more than $70 billion. Vodafone Plc.'s purchase of San Francisco-based
AirTouch Communications Inc. to form Vodafone AirTouch Plc. in
1999 followed an intense bidding war and marked the biggest bet
yet that wireless will be the communications technology of the
new century.
The world's largest wireless-communications
company has 31 million mobile-phone customers on five continents,
annual revenues of $9.9 billion, and cash flow of $3.4 billion.
Chief Executive Officer Christopher Gent is a serious cricket
fan known for taking long trips to big matches around the world,
but he has the sort of home run swing American investors can
identify with. Soon after he took command of Vodafone in early
1997, he began streamlining its distribution system, opened stores
on main shopping streets, boosted advertising, slashed subscriber
rates and pushed a rapid expansion in 13 countries in Europe,
Asia, and Africa. The result was a doubling of its subscribers
to more than ten million worldwide prior to the AirTouch acquisition.
Vodafone AirTouch's highly-publicized
recent hostile bid to buy Mannesmann A.G., the enormous German
telecommunications and engineering conglomerate, is further evidence
of its well-defined, ongoing international goals.
"The spectacular growth of
the mobile phone industry around the world shows no sign of abating,"
said the confident Gent, who heads his small management team
at the company's headquarters in Newbury, an hour's drive west
of London. "Ultimately, we expect penetration rates to reach
65 to 70 percent of the population in every sophisticated market
in the developed world." Shares of both Vodafone and AirTouch
had been robust performers in the past and the investment future
for the combined company looks bright.
Annual revenue growth of 35 to
40 percent is projected as it enters new international markets,
expands in its current markets, and enjoys operating synergies
from the merger. Already-attractive profit margins are expected
to widen in the future. Business expansion is expected to be
concentrated in Western Europe, South Africa, Egypt, and the
Pacific Rim. The company is also developing other mobile and
radio-related businesses, such as wide area paging, network services,
and packet data radio.
This is a union of two aggressive
young companies that began their lives as subsidiaries of larger
firms at a time when the financial potential of wireless communications
was hardly clear. Vodafone started as a division of Racal Electronics
Plc. in the early 1980s.
Then known as Racal Telecom, in
December 1982, the company won a competitive bid to build and
operate the second U.K. cellular telephone network, which was
launched as Vodafone in January 1985. The first stock exchange
listing in London and New York came in October 1988, when 20
percent of shares were floated. The company became fully independent
from Racal Electronics Plc. in September 1991 when the remaining
shares were issued in the largest corporate "demerger"
in U.K. history. At the same time, the name was changed to Vodafone
Group Plc. Meanwhile, it's easy to see why Bell Atlantic Corp.
started the bidding war for AirTouch Communications that Vodafone
eventually won.
The aggressive and profitable AirTouch
ranked in the top 20 of Business Week magazine's 1999 list of
best-performing U.S. companies. This spin-off from Pacific Telesis
Group was the largest international wireless company even prior
to this merger, its earnings boosted by significant subscriber
growth and the consolidation of its MediaOne Group acquisition.
It was an attractive blue-chip growth company.
The deal was structured as a merger,
with each company obtaining seven seats on a board of 14. Shareholders
of Vodafone own slightly more than 50 percent of the combined
company, an arrangement permitting the stock portion of the offer
to be tax-free to AirTouch shareholders.
AirTouch shareholders received
0.5 of a Vodafone AirTouch American Depositary Receipt (each
ADR equal to five Vodafone AirTouch ordinary shares) and $9 in
cash. About 130 AirTouch employees lost their jobs and the merged
company has about 23,000 employees worldwide. The two companies
aren't strangers, already working together in Sweden and Egypt.
A definite plus is the fact that Vodafone has divisions to sell
wireless services to both large and small companies, something
U.S. carriers haven't done as successfully.
Another important step was taken
when Vodafone AirTouch and Bell Atlantic reached a definitive
agreement in 1999 to create a new wireless business in the U.S.
with a national footprint, a single brand and a common digital
technology. The lack of such a wireless presence had been considered
a weakness of Vodafone AirTouch, but the new enterprise will
have a footprint covering more than 90 percent of the U.S. population
and 49 of the top 50 U.S. wireless markets. When the transaction
is completed in 2000, Bell Atlantic will own 55 percent and Vodafone
AirTouch 45 percent of the venture. The agreement also provides
that Vodafone AirTouch and Bell Atlantic will work together on
global business efforts such as equipment purchases, global roaming
agreements and development of new technologies.
Vodafone AirTouch Plc. is an exciting
new global company whose true potential is not yet known. If
this international bet on wireless for the future of communications
is indeed correct, customers and shareholders alike will benefit
handsomely.
Wal-Mart
Stores, Inc., Bentonville, AK: The Wal-Mart juggernaut continues
unabated. Talk as you wish about its quaint, small-town Arkansas
roots and folksy personality, its modern power is derived from
outstanding high-tech management, productivity gains designed
to cut prices to consumers, relentless growth ambitions on a
global scale and an uncanny ability to test and execute new concepts
flawlessly. Investors a decade ago were scratching their heads
and wondering if super-achiever Wal-Mart Stores Incorporated
could keep up its amazing pace.
Yes it could. Yes it can. When
Wal-Mart's profit growth was slowing several years ago, its aggressive
move into the grocery business through giant Supercenters with
170,000 to 200,000 square feet of general merchandise and food
kicked it back into gear again. The nation's No. 1 retailer is
now the No. 2 grocer in the U.S., thanks to nearly 600 Supercenters,
and fresh produce is a major driver of store sales.
There's much more. Wal-Mart has
become the biggest U.S. toy retailer as well, recently accounting
for nearly 18 percent of that lucrative market. Toys R Us had
held down the No. 1 spot for 15 years. Wal-Mart uses toys to
increase floor traffic, realizing that many busy parents prefer
to skip a separate trip to a toy store and buy popular toys while
doing their general shopping. There's always something going
on, such as the company's in-store test-marketing of coffee bars
in a few Indiana Supercenters in 1999, with plans for more to
open if the idea continues to do well.
The company hopes such cafes will
encourage shoppers to linger and, hopefully, buy even more store
items after they've been energized by a latté.
With about 3,600 Wal-Marts, membership-only
Sam's Clubs, and Supercenters, this company, built on an "everyday
low price" philosophy, has become bigger than former value
kings Sears, Kmart, and J.C. Penney combined. About 100 million
people shop at Wal-Mart stores each week. The company is adding
more than 100 Supercenters annually, often converting smaller
Wal-Marts. It expects that concept, currently producing nearly
one-fourth of company earnings, to account for about 50 percent
of earnings growth over the next five years.
The company employs more than 815,000
sales associates in the U.S. and 135,000 internationally. Ninety-five
percent of Wal-Mart stores are in the U.S., Canada, and Mexico,
but the stage is being set for international expansion providing
growth in the new century. It announced plans in early 1999 to
develop 75 to 80 new retail units outside the U.S. Over the past
two years, the company acquired and converted 95 retail stores
in Germany to serve as a base for further European expansion.
As a result, price wars and extended shopping hours common in
the U.S., but unheard of in Germany, have now become the norm
there.
The firm also took a big step into
the U.K. with the acquisition of retailer Asda Group Plc. Wal-Mart
for eight years has owned a majority stake in Mexicos largest
retailer, Cifra S.A. Among the 400-plus stores under various
local brand names that Cifra runs are over 60 Sams Clubs and
Supercenters. Wal-Mart also has stores in Argentina and Brazil
and, under joint venture agreements, China and Korea. The opportunities
are not lost on the company, as it carefully seeks to retain
the aspects of its corporate culture that have made it successful,
while adapting somewhat to the unique personality of each new
nation.
"We believe the successful
retailers of the future will be those that bring the best of
each nation to todays consumer," President and Chief Executive
Officer David Glass, who has led the company since 1988 and received
a $2.44 million bonus for a record-breaking 1998, said in the
most recent annual report. "We call it global learning.
We are committed to being a successful global retailer and we
believe the attributes that made us successful in the United
States will also lead to success internationally."
Continued strong capital appreciation
is expected for the stock of this company, whose shareholders
saw the stock price double in 1998. It continues to turn in record
revenues and earnings, often surprising Wall Street analysts
with the strength of its results. It is gaining market share
and, apart from the natural quirks of the economy, doesnt seem
to be facing any competitive threats. The company is improving
its operating efficiencies and investing in new warehouses in
the U.S. for fresh produce. Its merchandise selection and inventory
controls set the standard for the retailing industry.
Being No. 1 puts a company under
greater scrutiny. One criticism leveled at Wal-Mart is the fact
that it hasnt been more aggressive in e-commerce, with its Web
site www.wal-mart.com that has been in operation since mid-1996
still considered a modest contributor to its bottom line. The
company says that Internet business, offering a relatively finite
number of items such as computers and specialty foods, continues
to grow. And there is also ongoing criticism of the economic
impact of discounter Wal-Mart as it wreaks havoc among the conventional
long-time retailing establishments whenever it plants one of
its giant stores in a new, carefully-researched locale. In light
of the companys growth prospects, that trend is unlikely to diminish.
Whatever ones philosophical view
of the Wal-Mart phenomenon, it is undeniable that common-sense
businessman Sam Walton took the discount idea and ran with it
to places no one else had envisioned. He respected the consumer
and the shareholder. Declining merchandise prices and rising
stock prices were the result then and, one expects, will continue
to be the result in Wal-Marts future.
© By Andrew Leckey. Reprinted with permission of Warner
Books. Distributed by Tribune Media Services.
