The "Why-Didn't-I-Think-Of-That" Wal-Mart Secret Weapon

Wal-Mart’s net margin is 3.3% – a bit lethargic compared to its competitors – but it ranks No. 2 in the Fortune 500. Rafi Mohammed, pricing strategy consultant and the author of The Art of Pricing and the forthcoming The 1-Percent Windfall, says in a Harvard Business Review article syndicated in BusinessMirror that:

“A high operating margin doesn’t reflect pricing excellence. In fact, it usually reveals that you’re missing growth opportunities.” But “If you profit margin isn’t a good gauge of pricing effectiveness, what is? Simple. Just find out if your profit is increasing.”

Watch special video People of Wal-Mart. Cartoon courtesy of FargoFirst