...THE CASE ON WAL-MART: Employee Rights In 1998, Barbara Ehrenreich, a social critic and journalist, embarked on a ground-breaking experiment. To understand the typical low-wage worker, she left her comfortable life and took on various jobs and attempted to survive on minimum wage in three different places in the nation. One of her stops was Minneapolis, Minnesota, where she was employed by Wal-Mart, America’s largest employer employs with approximately 1.3 million workers in this country alone. Founded in 1962, Wal-Mart was Sam Walton's vision of great customer service and was meant to be a way to lower the cost of living in America. However, it seems that the corporation chooses to forgo certain issues such as fair wages and decent healthcare for its employees, so that they may afford their low, low prices. In her New York Time’s Bestseller, Nickel and Dimed, Ehrenreich states that “[u]nderneath those vests […] there are real-life charity cases, maybe even shelter dwellers” (175). Ehrenreich’s claim that Wal-Mart employees are dreadfully paid and mistreated are still accurate today, seven years later, as is evident by the statements of current statistics and recent articles that Wal-Mart continues to pay their employees minimum wage while the company’s CEO has a multimillion dollar salary, fails to provide decent health benefits to half of their employees causing these workers to rely on the government, and is strongly anti-union so that the company can continue to exploit...
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...WAL-MART CASE 1) Why has this company been so successful? The origin of its success has to be seek into the innovative vision of its founder Sam Walton whose central goal and philosophy was to offer shoppers lower prices than they get anywhere else. Walton's goals and philosophy have definitely strongly shaped Walmart’s culture and driven the company’s growth. Its founder innovative strategy followed by a good strategy implementation strongly supported by new technology, made the Walmart business model so successful over all these years. Such successful strategy is mainly due to the development of an extremely good distribution network and software system which has revolutionized the relationship between suppliers and retailers with mutual benefits, as well to its founder heritage management principles highly focused on customer value and service, “associates” commitment to the company achieved by means of sharing of information, ideas and profit as well, community involvement and ethic responsibilities. 2) Why haven’t competitors successfully duplicate their strategy? Walmart strategy is hard to duplicate for competitors because it is actually given by a mix of factors and company values deeply entrenched into the company history, culture and mission. While single strategic management decision can be, and effectively, have been replicated by competitors, the synergy of such strategic management decisions, which is the real key of the company’s growth and success,...
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...Verhaal Wal-Mart Case Study September 16, 2014 Sam Walton started Wal-Mart in 1962. When Wal-Mart was first introduced, it was believed to be the least likely to succeed in the discount retailing business. The central focus of Wal-Mart was on price. By 1970, Wal-Mart had expanded to 30 towns, all in small towns. In order to expand Wal-Mart beyond its small region, Wal-Mart decided to go public. By the 1990s, 100 shares increased in value from $1,650 to $3,000,000. At this time, Wal-Mart had also spread throughout the United States in both large cities and small towns. Wal-Mart had many different opportunities and threats facing them including, but not limited to, the general environment, five-forces, and their industry structure. Using the VRIO framework, one can assess Wal-Mart’s resources and capabilities and conclude whether or not they have sustainable competitive advantages. The overall general environment of Wal-Mart posed opportunities as well as threats. Technology posed disadvantageous to Wal-Mart and other companies in the discount retail industry. “Internet shopping was appealing because of the convenience and selection available, but perhaps the most attractive aspect was the competitive pricing” (Hesterly, p. 1-13). Less people were coming in to look around the stores, and many items could be ordered at the comfort of the consumers’ home with the click of a finger. The demographics posed an opportunity for the discount retail industry and Wal-Mart. Demographics...
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...1. Did Wal-Mart overestimate the transferability of its FSAs? Wal-Mart’s expansion to the German Market, did not develop as expected. The unique characteristics of the German Market hindered Wal-Mart’s successful model and the company was not sufficiently prepared to cope with all the liabilities of foreignness it faced in Germany. For example, it was impossible to provide EDLP due to the small size of Wal-Mart Germany, its inability to expand rapidly and its illegally judged loss-leader strategy. Wal-Mart’s secondly transferred FSA, its so-called ‘exceptional service’, was also overestimated, due to the fact that several of Wal-Mart’s basic operating principles were only partially compatible with German stakeholders expectations. To conclude, Wal-Mart overestimated the ease of transferring its FSA’s into the German market, without keeping in mind the host country its cultural differences, local regulations etc. Nevertheless, Wal-Mart used its bad experience problems from the past, as a guide for future growth and changed its core culture. They implemented a new system wherein a stronger focus on government restrictions, management requirements, cultural differences, and the specificities of the competitive landscape was integrated. Wal-Mart learned that is important to hire local managers. So, to reduce the lack in adequate knowledge about the international market Wal-Mart is operating in, the company now leaves greater autonomy for local management and more rigid financial...
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...of Contents Introduction2 Wal-Mart’s resources2 Tangible resources2 Intangible resources3 Human resource3 Wal-Mart’s capabilities4 Distribution4 Corporate function4 Operation4 Management Information4 Marketing5 Competitive advantages5 Knowledge management5 Distribution network5 Relationships strategy with suppliers and associates6 Financial management6 International operation6 Conclusion7 References list7 Introduction This project will analyze resources and capabilities of Wal-Mart and the linkage between two strands. According to Wal-Mart’s case, it can be divided Wal-Mart’s resources into three main types of resource: tangible, intangible, and human resources. Moreover, thanks to its resources, Wal-Mart’s capabilities comprises of distribution, operation, management information, marketing, and corporate function. If linkage between resources and capabilities can be indicated and understood, it enables Wal-Mart to produce many competitive advantages: knowledge management, distribution network, partnerships, and financial management. Through those advantages, Wal-Mart creates some strategies for the growth of its operation line within United State or extending over the world. Wal-Mart’s resources Tangible resources In terms of financial resources, the company has established in discount retailing format and become the largest and most profitable retailer in the world. It has been developing rapidly, as result; Wal-Mart produces much profit to reinvest...
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...Japanese tends to prefer quality over low prices, which constrasts with Walmart core value as Wal mart's motto is Every Day Low Price. Also, Japan is a small country with limited spaces, which has several implications for Walmart. Small housings and apartment sizes, with high rent prices means that Japanese would need to minimize their purchases. Japanese are having trouble with lack of storage room to store purchases. For example, a typical apartment in Japan would be 1 room apartment with Living, Dining, and Kitchen area. A normal size of Japanese apartment are an average of only 27,55 sqm. Japanses likes to make several small purchases frequently. They minimize purchases, they would make their purchases several times a week, in small quantities. This means that stores would have to be readily available within reasonable distance, and bulk purchasing is discouraged. Compared to Walmart usual practice of centralized, big stores, with bulk purchasing to save costs, a neighborhood convenience store would be more suitable for the Japanese people. Japanese have high operating costs, especially because of the prices of rent and buildings in general. An average commercial land prices in Japan is 156,857 Yen (USD 2,017)/sqm, with average commercial land price in Tokyo reaching 1,551,400 Yen (USD 19,956)/sqm, followed by Osaka with average commercial land price of 493,700 Yen (USD 6,360)/sqm. I suppose it is very expensive compared to the U.S. They are also inability to apply original...
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...The U.S. is in a shrinking economy. Many plants are closed and many people are unemployed. The big retailers change their suppliers from U.S. manufactures to the developing countries’ manufactures, which cost much less. The competition between the suppliers( manufactures) is more intensive. The supplier has less prower is retail business. The market is shift from supplier dependence to buyer dependence, which means the buyer/ retailer has more prower. They very know their customers’ needs and wants, and they determine what the manufactures should produce, including the specific product, the schedule, the quality, and the price. Retailers are now more powerful than manufacturers, and they are forcing the decision to move production offshore.2 Dog-eat-dog environment. High competition. High change rate, not able to forecast the trends. What is the driving force to make the industry changing. (focus on the text-book’s idea). Tied into the dynamic environment. Complex! The system relationship. Organization environment. Recourses the company has. The player in the film suggests the Walmart is using pull strategy, which the want. And the player thinks this way is more efficiency and increase U.S. productivity as well. a. In my opinion, Walmart is belongs to the shareholder model. The main reason is, Walmart strives for the lowest cost and gives the best price to its customers, in order to do the best business and maximizes profits, shareholder wealth and satisfaction. Walmart...
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...Wal-Mart is a brand that is well known around the world, especially in the USA. Wal- Mart began in the USA in the state of Arkansas. It was founded by Sam Walton in 1962. Wal- Mart quickly became the largest retailer in the world. Defeating its competitors, Wal-Mart now has control and power of the U.S. retail industry and making huge gains as the top retailer in the world. Globalization was Wal-mart next step because of its retail dominance in the United States. Globalization efforts happened quickly despite the fact that many people were skeptical about Wal-Mart opportunities in the international marketplace. In the year 2006, over 40% of Wal- Mart stores were internationally located. Wal-Mart decided to target emerging markets as the starting point for international expansion in Europe, nations with growing populations in Latin America, and in Asia is targeted China. “The first international store was opened in Mexico City in the year 1991. By forming a joint venture with the Mexican retail conglomerate, Cifra, Wal- Mart was able to overcome cultural differences (Ball al 396).” After some experience with Mexican partners, Wal-Mart succeeded to expand further in Mexico, and entered Brazil and Argentina. Wal-Mart became one of the first international retailers in China. “In the year 2006, Wal-mart out bided its largest competitor in China and acquired Trust-Mart, a chain of over 100 super centers located in 20 cities in China (Ball al 396).” This acquisition...
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...Strategically, Wal-Mart positioned itself to cater to population that lived in small towns having no other discount stores nearby with everyday low prices and greater variety of goods. 33% of its stores operated in metropolitan areas with few competitors enabling Wal-Mart to command 10-20% of total retail sales compared to non-metropolitan areas with 12% gross margins. By lowering expenses in key areas (advertising, COGS, SG&A expenses) and with competitive pricing, Wal-Mart was able to drive up sales and reap superior profits compared to other competitors in the market. The remainder of this paper analyzes in detail the various components of Wal-Mart’s cost structure which formed the core to its high profitability. Cost structure (1984) of Wal-Mart with respect to industry average is as below: Discounting Industry Economics Wal-Mart Economics in 1984 ($ in millions) Net Sales 100.0% $ 6,401 100.0% *Exhibit 1 License fees and other income 1.1% $ 52 0.8% *Exhibit 1 Cost of goods sold 71.9% $ 4,722 73.8% *Exhibit 1 Payroll expense 11.2% $ 645 10.1% *10.1% in 1985 - p.7 Advertising expense 2.3% $ 70.4 1.1% *$16.3 million in 1985 - p.6 Rental expense 2.2% $ 120 1.9% *1.8% + 0.1% in 1980's - p. 4 Miscellaneous expense 7.6% $ 346 5.4% *Calculated from difference Operating income 5.9% $ 550 8.6% *Exhibit 1 - Earnings before interest and taxes - $271 + $231 + $48 Net income 2.7% $ 271 4.2%...
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...Nicholas Case Analysis #2 Wal-Mart de Mexico MKT 611-1 April 10, 2015 I. HISTORICAL OVERVIEW/COMPANY PROFILE The present case pits a Mexican retail chain, Comercial Mexicana S.A. (Comerci) against a multinational conglomerate (Walmart), while affording a context through which to measure the many documented benefits of oft-celebrated free trade against its shortfalls. II. PROBLEM IDENTIFICATION The problem for Comerci is the entrance of Walmart into the Mexican market in 1991 amidst trade negotiations between Canada, Mexico and the United States, which eventually resulted in NAFTA (1994). Walmart, through a series of innate and systemic advantages, as well as favorable external conditions (i.e. relaxation of trade protectionism, opening to foreign investment, infrastructural improvement, rise of manufacturing supply base), was able to undercut its domestic rivals on the basis of price. Comerci’s problem regards how, and whether, to compete with Walmart. Beyond a motion filed with the Mexico’s Federal Competition Commission, which seems a longshot, the company is faced with the following options: 1. Remain independent, hoping for more favorable terms with suppliers; or 2. Pursue a merger with a local or foreign retailer. III. STRATEGIC ANALYSIS I have selected Porter’s Five Forces as a strategic analysis tool. This is owing to its incorporation of buyer, supplier and competitive factors, all of which are critical to resolving the case. The present...
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...Alper Küçükaslan S000773 COCA-COLA WARS CASE ASSIGNMENT 1. Compare the economics of the concentrate business to that of the bottling business: why is the profitability so different? (Use 5-forces analysis for both industries) Concentrate business requires relatively less capital investments. This factor makes easier entering to the market. Less material usage and few input requirements also makes threat of substitutes and services more applicable however, Coke & Pepsi grants %72 of the market so that there is a high risk of market entrance in concentrate business. Also, high costs of marketing (advertisement & promotions) require a solid brand image and sustainable budget so that it’s hard to compete in such a market. Furthermore, customer loyalty and economies of scale makes this market profitable for huge players such as Cola and Pepsi. Bottler business on the other hand requires high investment capital and too much operational cost which makes harder for new entrances to the market. Bottlers’ gross margin exceed %40 whereas their operational margin is %8 which is 1/3 of concentrate businesses. Bottlers are responsible for their own logistics and sales forces territorially and they are bounded on their pricing strategy through their contract with suppliers (Coke & Pepsi) so that their operational profitability remains low. More inputs and operational costs weaken bargaining power of suppliers however; because of high sales volumes and solid brand image with...
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...Mission Statement: Level 1 Founded in 1962, Wal-Mart has continued to uphold its mission statement of “Save Money. Live Better.” Wal-Mart shows commitment and appreciation to its customers by valuing them through everyday low prices. Customers can trust Wal-Mart because of their low price guarantee. Building a relationship with customers is an essential part of Wal-Mart’s mission because it allows them to meet their customers’ expectations and provide superior customer service. In return of the customer experience, all customers are encouraged to provide feedback to help improve elements Wal-Mart may lack, as well as provide positive feedback in regards to what they’re doing right. Wal-Mart stays true to its mission statement by continuously returning to the wisdom of their founder, Sam Walton: “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life” (Farfan). Strategic Goals/Plans: Level 2 It’s important to Wal-Mart’s future as a business, to continue expanding its customer base, increase sales, and stay innovative. It’s no easy feat to achieve, but when Wal-Mart noticed an increase in white-collar consumers because of the recent economic downturn, they seized the opportunity to accommodate their new demographic by embarking on an aspiring U.S. store remodel program as part of its three-year strategic plan appropriately named, Project Impact. At the center of this new plan...
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...Case Study I: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. Chao Han Junliang Shi Zhongyi Hu 2/25/2015 Azusa Pacific University Case Study I: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. Sears, Roebuck and Co. and Wal-Mart Stores, Inc. are the two big retail companies in U.S. Although Wal-Mart was acknowledged powerhouse of the U.S. retailing industry, Sears’ ROE exceeded Wal-Mart’s 2%, which can show that this firm was the true powerhouse. Therefore, Don Edwards, an analyst with a prestigious investment bank. He compared two financial performances of these two companies and he wanted to figure out which company performed better in different areas. Sears, Roebuck and Co. was founded in 1891. It started originally with a sole catalog business and then expanded into retail stores in 1924. Its stores were primarily located in shopping malls, including a large variety of merchandise. Sears has become the world’s largest retailer in terms of annual sales. By the early 1980s, Sears faced increased competition and declining market share. In 1992, The CEO of Sears, Arther C. Martinez has carried out three methods to improve profitability. The first was to cut costs. The second was to re-oriented the product mix in which the target audience was set to be middle-class female shoppers. The third was to offer customers more flexibility through the use of the company’s proprietary credit...
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...Wal-Mart Case Study I believe that America supports Wal-Mart and that Wal-Mart has become the most successful retail sales company in the United States. The number one goal of a corporation is to increase shareholders wealth and Wal-Mart is doing just that. If Wal-Mart were so bad, then people would stop shopping there. The world is all one big market, if people wanted to pay more for their goods, then they would end up paying more for the labor of the goods as well. If there are people that want to pay less for their goods (Wal-Mart shoppers) then they expect that they are going to pay less for the labor of the goods. The United States population is selfish, they will purchase goods at the lowest cost for pure self-benefit and Wal-Mart capitalizes on this fact. You can’t blame Wal-Mart for being too good at what they do. “Wal-Mart's company philosophy ('The Wal-Mart Way') is to be at the leading edge of logistics, distribution, transportation, and technology. The Wal-Mart business model would fail instantly without its advanced technology (Wal-Mart has the largest IT systems of any private company in the world) and supply chain (Wal-Mart has made significant investments in supply chain management).” The United States population wants to save their money, and they will save their money one way or another. Just because Wal-Mart provides its customers with the lowest price doesn’t mean they are at fault, the fact is that if your going to pay bottom dollar for your goods...
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...brought against Wal-Mart by a female employee. It specified how female employees were not given the same opportunity to advance as their male counterpart even though they had just as must experience or more. They were also denied training for top positions and prohibited from working in certain departments that were designated for men only, which also paid more (McGraw Hill, 2014, p. 582). Wal-Mart developed a system they used to promote, pay, assign and transfer their employees. This system was said to be subjective and had a disparate impact on female employees. Wal-Mart officials knew about this mistreatment to their female employees but still did nothing to correct it. They even went as far as to retaliate against one female employee who complained about the discrimination (McGraw Hill, 2014, p. 583). Another lawsuit filed against Wal-Mart in June 2001 claimed employees were not allowed to get paid for their overtime work. The employees were also approached with intimidation by threats if they did not finish their work within a scheduled amount of time, even if it was impossible for the work to be completed that same day (McGraw Hill, 2014, p. 586). Discussion When Sam and his brother Bud established their first Wal-Mart retail store, the vision was always customer satisfaction. He believed if he treated his employees well, they would in fact return that same treatment or better to the customers causing them to come back again (McGraw Hill, 2014, p. 586). Wal-Mart soon offered...
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