...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...
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...Sustainability and System Change Wal-Mart’s Pioneering Strategy Frank Dixon (Published on CSRwire.com, April 18, 2006) On October 24th, 2005, Lee Scott, CEO of Wal-Mart, gave one of the most important business speeches ever. In it, he committed the largest company in the world to making zero waste, using 100% renewable energy and selling sustainable products. The implications are huge. These goals cannot be achieved without broad systemic changes in areas including supply chain, regulatory and consumer awareness. To achieve its goals, Wal-Mart is integrating system change efforts into its sustainability strategy. By doing so, it is pioneering what may be the first sustainability strategy that actually has the potential to achieve sustainability (sustainability relates to ensuring society survives and prospers over the long-term). This article discusses the need to better address systemic issues that essentially compel all firms to negatively impact society. It also describes why sustainability will be the competitive advantage strategy of the 21st century and how Wal-Mart is capitalizing on this opportunity. System-Watch All companies produce negative environmental and social impacts. As companies impact the closed Earth system, pushback from the system is inevitable. This pushback can take the form of activist campaigns. As the largest company in the world, Wal-Mart has high environmental and social impacts. Several activist efforts have arisen in response to...
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...Donald Tiffany Retail Marketing Mid Term alternate assignment CASE 3 Wal-Mart’s Sustainability 360 1. Is Wal-Mart good for society? Would society be better off with or without Wal-Mart? The debate on whether Wal-Mart has done more good or bad for society has been a longstanding one. Apologists of the world’s largest retailer defend its business strategies, touting it as the prime example of unfettered American capitalism, the epitome of free market efficiency with low costs and high quantities of production and consumption. Opponents argue that the retail behemoth has led to the transfer of millions of jobs to less-developed countries like China, the exit of many small-to-medium businesses, and also infringement of employee rights. There are two sides to this debate depending on the stance one takes, along with how “society” is defined. From an economic standpoint, society refers to, collectively, the common person; the consumer. Consumers would benefit from low prices and an increase in quantity of goods consumed. Wal-Mart’s strategy of “everyday low prices” has certainly served society well in that respect. Due to its enormous economies of scale, notably its bargaining power with suppliers and the establishment of its own distribution centers, Wal-Mart has managed to offer very competitive low prices to its consumers due to the low costs. This has resulted of millions of Americans – especially the low-to-medium income consumers it traditionally targets – being able...
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...Target Sustainability Strategy Mohan (2011) stated Target made known publicly its sustainability commitments developed to guide Target continuing success, and sustainability which is outlined to lead the company toward a sustainability environment, and accomplish considerable commitments. The commitment outlines involves empowering customers, teams to lead sustainable lifestyles to make available the correct tools, and awards for increased productivity. The company commitment also includes sustainable choices for products that adequately balance suitability, and company performance. By 2015, Target goals are to have achieved its goals and continue its success as a sustainability organization throughout communities by bringing together different programs, and enhancing the communities. Wal-Mart's Sustainability Strategy According to Plambeck and Denend (2011), Wal-Mart chief executive officer Lee Scott and president made a speech to 1.6 million employees from 6,000 retail stores, and 60,000 suppliers. The purpose of the speech was to discuss Wal-Mart launching a steadily business sustainability strategy to decrease the impact on the international environment (Wal-Mart's Sustainability Strategy, 2011). The company goal was also to become a competitive and innovative global company. Although the company was profitable, it was not exclusive. Wal-Mart strong desirable goals were to restore more than 99% of energy, develop no waste campaign and selling products that support the...
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...Tactical plans can be devised with the strategic plan as the guiding force. The allocation of resources, or financial planning, is what helps an organization realize its goals and achieve success. Wal-Mart successfully has accomplished this task year over year. In just under 50 years, one store has grown into an economic force. “Wal-Mart was built on the foundation of saving people money so they can live better. This mission has allowed the company to grow to more than 8,400 stores in 15 countries around the world” (Wal-Mart, 2010, p. 2). Strategic Planning Initiative Strategic planning initiatives for Wal-Mart are numerous for an organization of its size. It has initiatives that include sustainability with a commitment to reduce the greenhouse gas emissions, community involvement as well as global expansion. The organization has a global reach that has spread cost-effective, clean technologies around the world. This allows Wal-Mart to share its best practices in environmental design across all its markets. Wal-Mart’s United States, International organizations, and Sam’s Club exceeded $100 billion in net sales for the first time in company history. One successful strategic planning initiative Wal-Mart has, considering the size of the organization is Sustainability. They strive to create zero waste, be supplied 100% by renewable energy, and sell products that sustain people and the environment. This initiative, which encompasses...
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...What are the problems that Wal-Mart has faced, and what has the company done to address them? Wal-Mart Stores, Inc., is an icon of American business. From small-town business to multinational, from hugely controversial to a leader in renewable energy, Wal-Mart has long been a lightning rod for news and criticism. With 2008 sales of over $405.6 billion and more than two million employees worldwide, the world’s largest public corporation must carefully manage many different stakeholder relationships. It is a challenge that has sparked significant debate. Although Wal-Mart reportedly can save the average family $3,200 annually, the company has historically received plenty of criticism regarding its treatment of employees, suppliers, and economic impacts on communities. Feminists, activists, and labor union leaders have all voiced their beliefs that Wal-Mart has engaged in misconduct in order to provide low prices. However, Wal-Mart has been turning over a new leaf. New emphases on diversity, charitable giving, and sustainability have contributed to Wal-Mart’s revitalized image. The story of Wal-Mart and its low prices includes both positive and negative impacts on society. Positively, Wal-Mart reportedly saves consumers over $287 billion annually, equating to about $950 per person. On the flip side, research shows that communities can be negatively impacted by Wal-Mart’s arrival in their areas. This analysis attempts to show both sides of the controversy. It begins by briefly...
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...A Case Study of Wal-Mart’s “Green” Supply Chain Management Adam Heying Whitney Sanzero MGT 520 Operations Management Professor Jim Constand May 4, 2009 Summary Supply chain management has been the cornerstone to Wal-Mart’s success and remains their primary competitive advantage in the retail/department store industry. Their distribution system is generally regarded as the most efficient and they have an approach to supply chain management that has long emphasized visibility through the sharing of information with their suppliers. Although there are hundreds of logistical functions which allow Wal-Mart to be the price and logistics leader, the focus will be primarily on the company’s newly adopted strategy of making logistical processes “green” and more environmentally conscious. According to the Supply Chain Management Review, Wal-Mart CEO Lee Scott committed the company to three ambitious goals: to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain Wal-Mart’s resources and the environment. Wal-Mart’s 14 Sustainable Value Networks, the Network’s structure, new “green” logistics technologies, and additional future initiatives will be considered along with counter arguments which suggest that Wal-Mart’s green initiative is simply unsustainable. The main sticking point seems to be the same one that has long held back the adoption of better light bulbs...
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...following case will analyze the Wal-Mart China’s Sustainability efforts. Wal-Mart China is in the begging stages of becoming sustainable, in an ecological sense, and faces some key issues. First the case will provide background information on Wal-Mart Global and Wal-Mart China to ensure the reader is aware of the circumstances. Then the case will analyze Wal-Mart China based on the 4Rs, recycling, resource, regulations, and reputation, described in Operations Management by Heizer, and how their efforts correlate with them. The case will then address key issues, such as questionable logistics practices, and price sensitive customers, and weary stakeholders. Background Information Wal-Mart Global Sam Walton “our customers are the reason we’re in business, so we should treat them that way. We offer quality merchandise at the lowest prices, and we do it with the best customer service possible. We look for every opportunity where we can exceed our customers’ expectations. That’s when we’re at our very best” (2011, Wal-Mart Culture). Sam Walton opened his doors in 1962, Arkansas, with the promise of offering the highest quality merchandise for the lowest prices while maintaining the best customer service. The company then sprinted to the top becoming a Fortune 500 and one of the largest retail companies in only four decades. Wal-Mart soon took on public scrutiny for being too powerful and with that came the realization of how much power Wal-Mart used. It was in 2005 when...
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... July 5, 2011 Resources and Capabilities of Wal-Mart Wal-Mart had enough financial resources to make capital investments to improve its operations and labor productivity. Most important investments were technological investments such as the UPC (Uniform Product Code) infrastructure, the computerized system within stores and the satellite network that enabled almost real-time communication among the stores, the distribution centers and vendors. These technological resources can also be classified as equipment related resources. As a result of these resources, Wal-Mart had strengthened capabilities in financial management, purchasing, administration, inventory management, labor productivity and store management. The computerized system within the stores enabled Wal-Mart to wire the merchandise requests of the stores directly to the central computer at the related headquarter, which functioned as a distribution center. In case the stock levels were lower than the critical levels, the merchandise could be reordered directly from the related vendors thanks to this computerized system. This system not only enabled to track inventory, sales and accounting functions but also strengthened the bargaining power in purchasing of Wal-Mart. Each vendor could supply no more than 2.8% of total purchase of Wal-Mart. With the $20 million worth of satellite network investment, Wal-Mart could ease the real-time communication among the stores, the distribution...
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...Wal-Mart is not only the world’s largest retailers, but it is also the world’s largest company in terms of revenue ($485 billion USD in 2015) and the world largest private employer with 2.2 million employees. The case describes the growth of Wal-Mart under Sam Walton’s values and leadership and reviews the main functions and operation of the company. Q.1 The retail industry is a highly competitive industry. Although Wal-Mart can rarely be beaten on price, there are many big discounted retail stores such as Target and K-Mart. There are also competitors that offer other advantages such as higher quality (Whole Foods) or better service (Best Buy). There is also little differentiation between the retailers. As seen on Table 2, the sales increase (%) in international markets is higher that of the US market, which means faster growing markets and that the growth can be attributed the industry attractiveness. Table 4 shows that Wal-Mart is doing a lot better in terms of financial performance against its competitors. This means that its performance in more attributable to its competitive advantage rather than industry attractiveness. Competitive advantage has a bigger effect to the performance of Wal-Mart. Wal-Mart’s strategy is low prices and thanks to the huge size of the company, it is able to employ economies of scale in the best way possible. It can negotiate very low prices and offer cost savings to customers. It is also able to import and produce products at very low...
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...Overall, Wal-Mart’s sustainability strategy has proven to be extremely profitable and cost-effective for the company. There are, however, two initiatives that benefited both society and the environment, but had a negative effect on Wal-Mart’s earnings. The first action was that Wal-Mart held for electronic products several recycling take-back events. The other approach taken by Wal-Mart was to lower the price of compact fluorescent light bulbs (CFLs) and refrain from selling incandescent light bulbs. Although these two strategies apparently led to a decrease in Wal-Mart’s profits, the social and environmental impacts that these initiatives have had greatly outweighs their lack of financial returns. For instance, Wal-Mart’s electronic take-back days are an excellent way to reduce the amount of e-waste in communities. In just five events, Wal-Mart was able to collect approximately seventy tons of electronic products. Even though these events were quite expensive and did not have a major effect on sales, the large number of e-waste that Wal-Mart helped avoid is still extremely substantial for the environment. Wal-Mart needs to establish a strategy to make these recycling days spark consumer interest and participation. The company attempted to sell a green laptop that came with a recycling kit. Although this was a strong effort, consumers did not react highly to it. Wal-Mart needs to develop a plan to educate its consumers on the importance of e-waste reduction and its...
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...weakness will allow a company to determine the opportunities they can take advantage of. The internal environment consists of structure, culture, and resources. Gathering information is the first process in strategic planning. It allows a firm to create value, and sustain a competitive advantage. Firms measure their strategic effectiveness by using measurement guidelines. This paper will examine the strengths, weaknesses, opportunities, and threats of Wal-Mart, the world’s biggest retailer. Wal-Mart Wal-Mart is a multinational retail chain headquartered in the Bentonville, Arkansas. The company was founded by business man Sam Walton in 1962. It quickly grew and by 1967 Walton owned 24 stores doing $12.7 million in sales. Today Wal-Mart is the third largest company in the world, employs over two million employees, and has over 8,900 locations worldwide. The firm is one of the most valuable companies in the world. Wal-Mart creates a competitive advantage by using a cost leadership strategy. Cost leadership is a strategy used by businesses to create a low cost of operation within their niche....
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...Activities of Value Chain in Wal-Mart Wal-Mart is one of the leading Fortune 500 companies, which is spread across the globe. It is perhaps the largest retail chain which deals with everything from food to consumer electronics. In terms of the revenue generated, it leads the fortune 500 companies like GE and Microsoft. Simply put, it has everything a homemaker can ever think of. Affordable price range coupled with aggressive online and market strategy has led to wide acceptance for Wal-Mart in towns and cities alike. Wal-Mart is probably the only largest fortune 500 corporations in the world, which directly services the common man. The major point is that all of these activities have to be in sync in order for the value chain to operate effectively. The support activities is not bound to any of the primary activities, but is supposed to serve them, the first step in analyze of intern resources is to identify how the company’s different activities makes the foundation for its competition strategy. Supportive Activities: 1. Firm Infrastructure: There are 2485 Wal-Mart stores all over the world. This includes 682 Supercentres, 457 Sam’s Clubs, 5 Wal-Mart Neighbourhood Markets and 1007 units of Wal-Mart International. Wal-Mart serves over 100 million customers weekly worldwide. There are 1035000 associates, and the company is America’s largest private employer. Wal-Mart is run from a national headquarter. The headquarter takes care of orders, and every local store has to report...
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...DR. BASMA KASHMOOLA bUSINESS ETHICS / SPRNG 2014 Case 2 Wal-Mart: The Future is Sustainability The Wal-Mart case was written to give students another perspective on one of the largest employers in the world. Over the years Wal-Mart has faced a large number of lawsuits and allegations of unethical behavior. Students will likely have heard stories of unethical and illegal activities involving Wal-Mart, and should be encouraged to share them in class. However, Wal-Mart has gained significant ground in recent years in regaining its reputation. The company has been a leader of adopting energy-efficient and renewable energy technology, offers a broad selection of organic items, and has improved its employee rights record. Nevertheless, it is still Wal-Mart, the largest corporation in the world, and many people remain hesitant to accept that Wal-Mart has fundamentally changed its ways. After having students read this case, instructors may want to ask whether they believe Wal-Mart is inherently unethical, or whether they are convinced the giant has changed its ways. As Wal-Mart has grown, its strategy has changed. Could its new push into sustainability and social responsibility be driven by profits, not by a real desire to clean up its act? In the 1970s, Wal-Mart’s strategy was to go into secondary markets, meaning communities with fewer than 10,000 residents. The company’s logistical strategy was to grow out from Bentonville, Arkansas in order to gain channel economies...
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...Wal-mart 2013 Principles of Management Wal-Mart and Effective Management Karwan S. Othman Wal-Mart, United States Of America Wal-Mart at Its Peak Wal-Mart is the largest retailer worldwide; the reasons may vary from different functional fields of the company. Fifty years ago, the company started the business based on the lowest prices that could be offered to customers. Since then, Wal-Mart is “Everyday low price” pricing strategy to maximize the sales as much as possible. Besides of that, it is using the current technology to keep track on every single sale at each store among all the stores in around forty countries. New financial systems through the new technology being in charge enable the company to manage the financial systems of each single store. Wal-Mart’s mission is to get to zero waste and highest sales among the other retailers. It is been said that Wal-Mart is doing the best of retailing, and it is because of various aspects of the organization although I believe planning, low pricing, using modern information systems and controlling strategies are the most vital characteristics of the organization’s triumph. Wal-Mart is established based on lowest prices possible for customers, and that is one of the most significant factors of the company’s success. Everyday low pricing, EDLP is a strategy that organizations use to offer low prices than common prices of products which would encourage customers to purchase without waiting for sales. According to the...
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