Wal-Mart Sustainability Strategy

In: Business and Management

Submitted By Yloper
Words 1000
Pages 4
Wal-Mart Sustainability Strategy

“Given the fact that Wal-Mart customers generally are unwilling to pay a premium for environmentally friendly products, how is the company deriving business value from its sustainability strategy, or if not, how can it ensure that it does?”


Wal-Mart launched a sustainability strategy to dramatically reduce the company’s impact on the global environment and become “the most competitive and innovative company on the world”(Denend, L.(2007)).I believe the decision to launch a sustainability strategy was a brilliant move for the company because it takes advantage of the opportunity to significantly increase Wal-Mart’s reputation, thereby increasing consumer loyalty and profits in the long-run. Through this strategy, not only would Wal-Mart benefit, but the global environment as a whole.
Wal-Mart responded to public concerns of the company’s global environmental impact by contracting a nongovernmental organization (NGO) to research the issue. The Union of Concerned Scientists (UCS) compiled data regarding the impact in five areas: 1) greenhouse gas emissions, (2) air pollution, (3) water pollution, (4) water use, and (5) land use. From this research came Wal-Mart’s sustainability strategy. The company began to develop goals and objectives to reduce their impact on the environment (Denend, L.(2007)).
During the process of developing goals and objectives, the organization’s culture shifted from an internally focused culture to collaborative partnerships. Wal-Mart realized that in order to become sustainable, they needed help; so they sought input from every source imaginable, consultants, suppliers, manufacturers, eco-friendly competitors, academics, critics, etc. Ultimately, the company identified to three primary areas that it could set environmental goals to reduce Wal-Mart’s impact: energy, waste, and…...

Similar Documents

Wal-Mart's Sustainability Strategy

... intermediaries while improving its relationships and forming high degrees of trust with the suppliers, enabling them to secure more business with Wal-Mart gaining greater bargaining power and direct access to specialized expertise. Another challenge for Walmart was how to stimulate development of breakthrough innovations. Walmart solved this problem by encouraging suppliers to license their environmental innovations, minimizing supplier sensitivity. Being increasingly reliant on its suppliers to meet its public goal, Walmart will need to measure suppliers’ environmental performance through the use of scorecards, and implement an audit process in order to stay updated on suppliers’ performance with regard to their health, safety and environmental records Although most of Walmart’s sustainability strategies derive both sustainable and business values, 2 initiatives, the Product Take-Back Programme and the aggressive promotion of Compact Fluorescence Lamps (CFLs), lack profitability. However, there are still justifications for Walmart to continue pursuing them. Both programmes improve the firm’s intangible assets (i.e goodwill and brand image). For the Product Take-Back Programme, it further allows Walmart to obtain a first-mover advantage in anticipation of impending legislation. CFLs’ initiative will also allow Walmart to possibly replace their store space for lighting with newer, more profitable products and their in-store marketing can serve as an educational tool, to......

Words: 1263 - Pages: 6

Wal-Mart Mis Strategy

...Wal-Mart- A Case Study of MIS Strategy Walden University Wal-Mart – A Case Study of MIS Strategy Management information system is all about people using technology to work with information as they support the organization in its quest for a competitive advantage (Haag & Cummings, 2008, p. 29). Researchers and authors have discussed management information systems and technology over the decades. The concepts of competitive advantage, technology, outsourcing etc. have been theorized, yet discussion on the subject matter continues. While MIS strategy formulation has seen advancement, organizations are evolving and constantly changing their operating models. An example of such organization is Wal-Mart, the global retail giant. This research seeks to pin-point Wal-Mart’s key management information system strategy, while providing a deeper understanding of the organization’s management information systems strategy and its impacts. Further it aims to investigate knowledge management, e-commerce strategy, and the impact of database management which are aspects that can be incorporated into the MIS strategy formulation. To achieve this objective the literature survey was conducted to explore available published papers in the sphere of IS/IT strategy formulation. Considering that the applicability of information systems and technology is mission critical, the research design focused on the qualitative approach. The primary method of data collection was through semi...

Words: 1763 - Pages: 8

Wal-Mart Sustainability Strategy

...Wal-Mart Sustainability Strategy “Given the fact that Wal-Mart customers generally are unwilling to pay a premium for environmentally friendly products, how is the company deriving business value from its sustainability strategy, or if not, how can it ensure that it does?” Wal-Mart launched a sustainability strategy to dramatically reduce the company’s impact on the global environment and become “the most competitive and innovative company on the world”(Denend, L.(2007)).I believe the decision to launch a sustainability strategy was a brilliant move for the company because it takes advantage of the opportunity to significantly increase Wal-Mart’s reputation, thereby increasing consumer loyalty and profits in the long-run. Through this strategy, not only would Wal-Mart benefit, but the global environment as a whole. Wal-Mart responded to public concerns of the company’s global environmental impact by contracting a nongovernmental organization (NGO) to research the issue. The Union of Concerned Scientists (UCS) compiled data regarding the impact in five areas: 1) greenhouse gas emissions, (2) air pollution, (3) water pollution, (4) water use, and (5) land use. From this research came Wal-Mart’s sustainability strategy. The company began to develop goals and objectives to reduce their impact on the environment (Denend, L.(2007)). During the process of developing goals and objectives, the organization’s culture shifted from an internally focused...

Words: 1000 - Pages: 4

Wal-Mart - Deriving Business Value from Sustainability Strategy

..., Lowes also has a “do-it-yourself” gimmick and operates with fewer stores and state locations. The concepts that have made these companies an oligopoly are several factors, “one stop shop”, low prices, do-it-yourself, buy-it-yourself, convenient locations, and excellent customer service. (Tolunay, Wang, Ma, Zhang) A few of their strategic moves for success for Home Depot is their expansive distribution channels and their e-commerce strategy to bring in new areas of e-tailers in the home improvement industry. (Tolunay, Wang, Ma, Zhang) Lowes has targeted the “big-ticket” items such as appliances and higher margin home furnishing. Lowes had to create a strategy to gain market share and profits to off set the longevity of the older company, Home Depot that has be penetrating the market for longer period of time. Lowes achieved market share by a risky move of entering the backyard of locations of Home Depot. Lowes plan was achieved by a little bit of luck that all of the “moves” aligned with good development, low interest rates for their loan to expand aggressively and margins on the products they sell. (Tolunay, Wang, Ma, Zhang) Another comparative factor, Lowes focuses on women customers, convenient and accessible store layout, but most importantly higher-margin goods. Locations and expansions have also been a sequential decision-making game by which Lowes entered markets and avoided others with the anticipation of what Home Depot, their competitor’s positioning...

Words: 2989 - Pages: 12

Wal-Mart

...Abstract This paper is an analysis. Labor Market Level. Stakeholders According to walmartstores.com, Wal-Mart is committed to engaging all of their shareholders, both internally and externally, to become the most sustainable, responsible company they can. Wal-Mart believes that by listening to, and partnering with their stakeholders, they are truly saving their customers money so they can live better. Wal-Mart’s stakeholder group differs, in an effort to adapt to the changing needs, and issues that continue to evolve in the marketplace. As Wal-Mart pursues their corporate goals, they further strengthen relationships with shareholders in order to be transparent and enhance their relevancy with the customers and communities they serve. Markets Wal-Mart focuses on creating a low price appeal to its customers. The marketing strategy relies on word of mouth communication based on everyday low prices; consequently the focus market will be drawn to the low price guarantee. The low price strategy aligns well with its objective of minimizing operating cost while adding value for customers because of the savings from advertising, and these savings are passed onto the customer by offering products at a lower price than the competitor. Competition Because of Wal-Mart’s low price offering, low cost operations as well as their operational efficiency, Wal-Mart tops the list of retailers worldwide. While some retailers such as Dollar General offering a low price initiative...

Words: 508 - Pages: 3

Wal Mart

...-service, cash-and-carry basis with the objective of maximizing sales volume and inventory turnover while minimizing expenses. Business level strategy Wal-Mart has adopted cost leadership strategy to achieve competitive advantage in the market. They have achieved cost leadership by attracting price sensitive customers and offering lowest price consumer goods. The cost leadership strategies are helping Wal-Mart to reduce its cost of operations and thus enjoy higher profits as well as the larger market share. The company is able to beat its competitors such as Target Corporation by reducing prices and thus achieving sustainable competitive advantage to a great extent. The few techniques that Wal-Mart is using to gain sustainability are mentioned below. Wal-Mart has gained benefits from economies of scale that helps to keep the prices lower as compared to the competitors. The company is able to spread its fixed cost over a large number of units of products resulting in a lower cost per unit. Due to its enormous size and large number of stores worldwide, Wal-Mart has the tremendous bargaining power with its suppliers and thus it purchases products at lower prices. Walmart concentrates on finding ways to lower their costs by constantly rethinking how to complete their primary and support activities to reduce costs still further while maintaining competitive levels of differentiation. They has effective inbound logistics by using just-in-time inventory.......

Words: 961 - Pages: 4

Wal-Mart

... increasing emphasis on sustainability of businesses, it is very much probable that these regulations will become more stringent in the future. Walmart also offers take-back programs for goods sold in-store as well as online. Circumstances may require household hazardous waste received as part of take back programs to be managed under the Universal Waste Rule. (40 CFR 273.8) (U.S. EPA) An advantage of increasing e-commerce for Walmart would be that it will be able to fight the allegations of environmental agencies regarding the company occupying vast land areas for its stores and that it increases the energy consumed by customers to drive to and from the stores. But at the same time, it will have to invest sensibly in implementing a greener IT infrastructure with appropriate data center designs and design a logistics infrastructure that would use fuel efficient ways of transportation. Also, it will need to be proactive and incorporate the use of sustainable packaging in its e-retail strategy to avoid negative implications of the fast-evolving environmental regulations. Challenges: Wal-Mart and Amazon are both successful companies. Both dominate their expertise areas. Amazon is the biggest online store, while Wal-Mart is the world’s largest retailer. Wal-Mart has $469 billion revenue in 2012 revenues while Amazon has $61 billion. The biggest challenge Wal-Mart faces is to let people think of them as a low price leader in both online and off. Amazon has done a great...

Words: 7273 - Pages: 30

Wal Mart

...1) Wal-Mart Company has been able to lead the retail industry, because it focused on specific customers and applied many measures to satisfy them. In fact, Wal-Mart company targets customer who buy merchandise in bulk, and has succeed to locate her stores at a suitable places where consumers could have access easily. One of the innovations of the Wal-Mart-mart company is that she procured goods directly from manufacturers without facing all intermediaries. Therefore the organization has gained enormously in terms of margin thanks to economies of scale. In fact, Wal-Mart has quickly realized that the success would be to seduce the supplier before the customer, that why the company makes effort to understand their cost structure so as to build a long term relationship. Moreover, the Wal-Mart supply chain management succeed because of its distribution strategy, at first, Wal-Mart has a lot of distribution stores located on different cities in the United States, Second, the strong relationships between supplier and client make the company able to stock up every two weeks, third, Wal-Mart distribution centers ensured a steady and consistent flow of products to deal with the request. Furthermore, Wal-Mart has a varied range of product that can satisfy the majority of customers. Another crucial element which the supply chain management of Wal-Mart depends on is her logistic infrastructure, indeed, Wal-Mart distribution centers are serviced by a lot of company-specific vehicles...

Words: 781 - Pages: 4

Strategy : Wal-Mart vs Honda

...Wal-Mart vs Honda 1. What are the sources of Wal-Mart’s competitive advantage in discount retailing? Discount stores extended to general merchandise by charging gross margins 10% ~ 15% lower than those of conventional department stores. To compensate, discount stores cut costs to the bone. In this way, Wal-Mart had two key aspects of initiating their business. First, they were locating stores in isolated rural areas and small towns. The other element was the pattern of expansion. They were always pushing from the inside out. As for operating business, Wal-Mart had their own way of doing things. First, they built their own warehouse so they could buy in volume at attractive prices and store the merchandise. Second, their useful information systems made flexibility among stores to operate their own strategy like “everyday-low-prices”, “satisfaction guaranteed” policies. Also, a two-step hub-and-spoke distribution network was used to reduce costs. It made Wal-Mart and their vendors benefited from reduced inventory costs and increased sales. In spite of some legal conflicts with competitors, they kept focusing on diversification and international operations with a strong relationship between the management and employees. 2. What is the strategy that allowed Honda to be so successful in the motorcycle industry? Beginning in the 1950s, Honda focused on superior productivity. First, they offered a multiproduct line. Second, they took leadership in product innovation and...

Words: 349 - Pages: 2

Wal-Mart

...Running Head: WAL-MART EXPANDS HEALTH BENEFITS Business Case 4 Human Resource Management Foundation – HRM 500 1. How well do you think Wal-Mart’s earlier, more limited health benefits supported the company’s overall business strategy? I feel Wal-Mart’s earlier, limited health benefits did not support the company’s overall business strategy because, in order for employees to want to work for a specific employer, employees must feel they are making a difference in his/her position. Employees must also feel that the organization is meeting some of their important needs. Employees place value in job satisfaction for example, employee earnings and benefits. ‘A job is the primary source of income and financial security for most people” (Noe. 2009, p.294). An employee expects a fair salary for the work he/she performs. If the employee feels his/her pay is not equal or comparable to others, who are doing the same job, can cause the employee to feel a sense of unfairness and dissatisfaction. An employee who feels the organization supports their individual needs are more motivated in displaying positive behaviors and working relationships. When an employee feels good about his/her employer it shows in his/her performance. Employees are more engaged in their position when the organization presents a pleasant working environment and opportunities for growth. One of Wal-Mart’s expectations of their employees is to provide superior customer service. Employees who are...

Words: 1052 - Pages: 5

Wal-Mart & Target – 2014 Holiday Season Strategy

...Wal-Mart & Target – 2014 Holiday Season Strategy Retail stores Target and Wal-Mart have tacked holiday season in a different way this year compared to before. In previous years, there has been a trend to bring Black Friday’s discounts earlier in November, however, this year Wal-Mart and Target went beyond all market expectations. Wal-Mart’s strategy for the holiday season is “to offer the best brands, to make shopping experience easier, and to continue providing low prices than competitors to bring joy to their customers”, says Duncan Mac Naughton, Wal-Mart Us Chief Merchandising Officer. For 2014 Holiday season these retail stores have begun the season sales on November 1st, providing Black Friday and Cyber Monday discounts from the first week of November all the way till the week before Christmas, stretching the holiday season almost an additional month compared to previous years. Brian Cornell, Target’s Chairman of the Board and CEO, says “Target’s promise is ‘Expect More. Pay Less’, and when we do that, Target is impossible to beat”. Retail stores depend largely on their pricing in order to be competitive and successful in their industry. In order to be able to achieve success, these stores need to implement a pricing strategy that goes in accordance to their mission. In the case of Target and Wal-Mart, their pricing strategy is based on a maximum market share pricing objective. When looking and this retail stores, they possess a huge part of the market and they...

Words: 1162 - Pages: 5

Wal-Mart

...Wal-Mart is an all American multinational retailer corporation, with many different departments it is impossible not to find exactly what you are looking for. Thanks to their large warehouse stores and many chain stores, it has become the world’s largest public company. Wal-Mart is successful because of their business strategy, which is to offer their shoppers the lowest prices guaranteed. Wal-Mart finds way to save pennies in everything they do. They pay their estimated 1.6 million employees minimum wage, they offer low to none benefits. They also try to save money when it comes to heating and cooling their building. They push its supplies to cut prices, for example they pushed P&G to drop from putting deodorant into boxes. Wal-Mart’s strategy is also to build stores outside of large cities but still close to existing stores. Because stores are so close they save on distribution costs. They also save on advertising by relying on the customer by word-of-mouth. The characteristics of Wal-Mart target customers are low, middle class income families. They focus on women because they are usually the ones that do all the shopping. They look for busy people and need a one-stop store, where they can get everything they need from groceries to clothes and necessities. They target customers who are price conscience and price sensitive. Customers who want the lowest price possible without having to sacrifice quality. The average age of the typical Wal-Mart customer is 25-50. The......

Words: 336 - Pages: 2

Wal-Mart

... occupying approximately 70,000 square feet in sales space (other department chains' stores averaged 40,000 square feet). But now, even these stores were no longer big enough. With globalization going through, the United States would receive a flood of imported goods. Both for this, and for advantage against its competitors, Wal-Mart, starting 1987, began to build supercenters, stores with an amazing 180,000 to 200,000 square feet, which sold everything from hard goods to fresh food.Figure 1 documents the shift in policy. The number of Wal-Mart regular stores rose between 1985 and 1995, although after 1990, the rate of growth slowed. In 1995, the number of Wal-Mart regular stores peaked at 1,995; in the ensuing seven years, the number contracted by more than 400. There were no supercenters in 1985, only five in 1990, but by 2002, there were 1,268—a staggering growth of 25,000% since 1990.As the second prong of the globalization strategy, Wal-Mart established stores abroad, regimenting foreign markets using the same methods as it did in the United States, thus destroying those countries' economies. Figure 2 shows that the number of stores that Wal-Mart has built in foreign countries has risen from 1 in 1990, to 1,288 in 2002. Wal-Mart is now the number one retailer in Mexico, Canada, and other countries. The trajectory of the curves of building Wal-Mart international stores, and of building domestic Wal-Mart supercenters are virtually the same, arising from a single policy.The...

Words: 5677 - Pages: 23

Wal-Mart

... allow Wal-Mart to better exploit its core competencies. Capture Share of Middle and Upper-Income Customers Middle- and upper-income customers have low price inelasticity, relatively low switching costs and are sensitive to brand reputation. These characteristics show that customers’ wants are different with Wal-Mart’s strategy and vision “saving people money so they can live better” (Hanson et al., 2011, p.508). Therefore Wal-Mart should take a different strategy in order to exploit middle- and upper-market shares. We suggest separating Sam’s Club operations from Wal-Mart and establishing a subsidiary corporation of Sam’s Club. The Sam’s Club should focus on catering middle- and upper-income customers. For example, Wal-Mart might stock ‘Konka’ TVs (a Chinese brand with standard quality but low price), while Sam’s Club stocks Sony 3D TV. For this separation to be successful Sam’s Club needs to establish a new management team in order to embrace the new business strategy. Restoration of Reputation To restore its reputation in the USA, each Wal-Mart store should focus on the local community and causes that are important to their customers. The continuing of environmental and sustainability policies is also critical, as they can utilise their supply chain efficiency to ensure their environmentalism is profitable, reputable and sustainable. The disallowing of unions by Wal-Mart has been a key criticism by the public and therefore the costs of unionism may actually be......

Words: 3943 - Pages: 16

Wal-Mart

...Wal-Mart is the world’s largest retailer. It is bigger than ExxonMobil, General Motors, and General Electric. It does more business in three months than its number two competitor Home Depot does in a year. Just to help you gauge how large Wal-Mart has become it does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined. They provide many jobs within communities because there are 8500 stores in 15 countries under 55 different names. Wal-Mart’s goal is to provide low prices to its customers no matter what the cost, but behind the scenes how is it really to work for Wal-Mart? Wal-Mart has the highest employee turnover rate of industry, over 50% turnover rate the first year. That means approximately 50,000 employee’s turnover per month. Overall Wal-Mart’s business model doesn’t care about the high employee turnover because it’s not a bad thing to them since it lowers their payroll cost and means that fewer employees qualify for benefits. One out of 7 Wal-Mart employees has no health care coverage since associates must wait one year before qualifying for health care coverage. Also a leaked Wal-Mart memo shows that Wal-Mart employees spend 8% of income on health care which is twice the national average. Part of the high employee turnover rate contributes to the fact that most walmart associates earn below the poverty line. The average walmart employee working “full time” at 34 hrs a week and earning $10.11 per hour will earn $17,874.48 per year.......

Words: 295 - Pages: 2