May 18, 2011

A Profit Lesson for Global Small Businesses

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Wal-Mart appears to be experiencing international growing pains.  Their strategy for driving global growth is working from a sales stand point but not necessarily from a profit or ease of doing business aspect.
... there’s a big problem with that growth strategy: operating margins are significantly worse internationally then they are in the U.S. In this quarter, U.S. operating margins came in at 7.42%, versus 3.93% for international operating margins. And after taking out currency effects, international operating income fell 3.3% year over year.
The lesson for global small businesses:  Monitor your operating margins country to country.   You may not be the size of Wal-Mart yet this is a common problem for any sized business operating internationally.  Keep your profits strong and healthy worldwide.
 
Read more here.
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