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a cultural phenomenon and a lightning rod for controversy.cutting-edge technology. It all started with a simple philosophy from founder Sam Walton: Offer shoppers lower prices than they get anywhere else. In this article. Now that Wal-Mart is so huge. We'll also take a look at the scope of Wal-Mart's impact on the economy and the controversies surrounding Wal-Mart. it has unprecedented power to shape labour markets globally and change the way entire industries operate. you will learn the key reasons that Wal-Mart has been able to keep its prices low -. That basic strategy has shaped Wal-Mart's culture and driven the company's growth. It is an economic force. as well as the future of the company.Wal-Mart is more than just the world's largest retailer. a frugal corporate culture and a push to make suppliers sell merchandise at cheaper and cheaper prices. .
going public in 1970 and adding more stores every year. In 1990. Neighbourhood Market stores and Sam's Club warehouses . even after Wal-Mart made him very rich.A Little History. In the early 1960s. Walton opened his first Wal-Mart in Rogers. Sam Walton opened his first five-and-dime in 1950. The company continued to grow.Wal-Mart Supercenters. He was right. Two years later. he figured he could make up for that in volume. WalMart discount stores. it surpassed Sears. Arkansas. His vision was to keep prices as low as possible. Walton continued to drive an old pickup truck and share budget-hotel rooms with colleagues on business trips. Wal-Mart surpassed key rival Kmart in size. He demanded that his employees also keep expenses to a bare minimum -. The company has continued to grow rapidly after his death in 1992 & now operates four retail divisions -.a mentality that is still at the heart of Wal-Mart culture more than a decade after Walton's death. Even if his margins weren't as fat as competitors.
040 2. Home Depot has 2. Wal-Mart has 6. 2006. Wal-Mart had sales of $312.200 retail outlets.43 billion in January 31.How Big WalWal-Mart Is Today Wal-Mart employs 1. posted sales of $81. . 2nd-largest Home Depot.040.5 billion billion.6 million people.
The technology uses radio frequencies to transmit data stored on small tags attached to pallets or individual products.Wal-Mart Strategy Establish the universal bar code which forced manufacturers to adopt common code. During the first eight months of 2005. labelling. RFID tags hold significantly more data than bar codes. The bar allowed retailers to generate all kinds of information -. . Wal-Mart experienced a 16 percent drop in out-of-stock merchandise at its RFID-equipped stores. Wal-Mart became especially good at exploiting the information behind the bar code & is considered a PIONEER in developing sophisticated technology to track its inventory and cut the fat out of its supply chain Wal-Mart became the 1st major retailer to demand manufacturers use radio frequency identification technology (RFID).creating a subtle shift of power from manufacturers to retailers.
Store managers often work more week. they stay at 73. Even on things like the heating and cooling of the stores.m. instead of an expensive city like New York. ~ They work long hours. typically arriving at work before 6:30 a. ~ Executives fly coach and often share hotel rooms with colleagues. and working half-days on Saturdays. and in the summer. Wal-Mart's headquarters in Bentonville. ~ You won't catch executives in limousines and you won't see them dragging into work at 9:30 a. ~ The building is drab and dull. AR . This culture is also present at the company's headquarters. stores are kept at 70 degrees Fahrenheit. Wal-Mart is headquartered in WalBentonville. It has also been Accused of demanding that hourly workers put in overtime without pay. Arkansas.m. In the winter.Frugality At Its Best The company has been Criticized for the relatively Meagre wages & health care plans that it offers to rank-&-file employees. than 70 hours per week They are expected to pinch pennies wherever they can.
Experts estimate that Wal-Mart saves shoppers at least 15% on a typical cart of groceries." author Charles Fishman discusses how the price of a four-pack of GE light bulbs decreased from $2.Including the technology and corporate culture. Everything -.The company has been very successful at this. This philosophy is known as ³PLUS ONE.´ . -. feeds into that ultimate goal of delivering the lowest prices possible. to cut prices.´ ONE.19 to 88 cents during a five-year period.In "The Wal-Mart Effect.Wal-Mart also pushes its suppliers. -. -.The PLUS ONE Concept The central goal of Wal-Mart is to keep retail prices low -.Wal-Mart demanded that each supplier either lower the price or increase the quality every year on every item. Wal-. some say relentlessly.
Economist Emek Basker. ~ Grocery stores. Wal~ It wields incredible Power. . ~ Three other retailers close within two years and ~ Four close within five years.D.Power & Controversy Because of Wal-Mart's Massive Size. manufacturing jobs Overseas and changed the way that even large & established industries do business. ~ While the Wal-Mart might employ 300 people. Overseas. ~ It has driven smaller retailers out of business. ~ Sporting goods stores. when a Wal-Mart opens. another 250 people working in retail lose their jobs within five years in that city. ~ Local pharmacies. Found that in a typical United States city. Ph. ~ Forced manufacturers to be more Efficient often leading these suppliers to move Efficient. There is plenty of Anecdotal Evidence that a new Wal-Mart in town spells DOOM for.
Then. which meant layoffs. groceries. because it is the # ONE supplier-retailer of most of our consumer goods -. Gary Gereffi. but home appliances. Lakewood opened a China. sporting goods. food.IMPACT On Supply Chains«! Suppliers are also heavily Impacted by Wal-Mart. a Duke Professor who studies Global Supply Chains. By 2003. Lakewood also badgered it own suppliers to knock down the prices of parts. and Lakewood responded by automating the production process. etc.not just clothes. shoes. a 20-inch box fan costs $20. Wal-Mart pushed the manufacturer to lower the price. in Chicago. bicycles. The stories of how Wal-Mart pushes manufacturers into selling the same product at Lower & Lower prices are legendary. toys. the price on the fan in a Wal-Mart store had dropped to about $10 from $20. factory in China where workers earn 25 Cents an hour. put it this way in a PBS Interview: Wal-Mart has life or death decisions over (almost) all the consumer goods industries that exist in the United States. a fan manufacturer. . One example is Lakewood Engineering & Manufacturing Co. in 2000. electronic products. In the early 1990s.
. But also remember that Wal-Mart once touted a "Buy America" campaign. that philosophy quietly faded in the 1990s. ~ In 1985.WalWal-Mart & outsourcing? You may have heard that Wal-Mart sends manufacturing jobs overseas. Wal-Mart said that 6 percent of its total merchandise was imported. Walton launched a "Bring it Home to the USA" program. ~ In 1995. offering to pay suppliers as much as 5 percent more for products made in the United States. A decade later. Here's how the discrepancy sorts out. experts estimated that Wal-Mart imported about 60 percent of its merchandise. as Wal-Mart joined other retailers in a quest to find the Cheapest Sources Of Production around the world. ~ However.
It also affects how even major. called Slice One. Coke planned to launch one new diet cola called Coke Zero. ~ Pepsi also came up with a line of diet drinks. At Wal-Mart's request. In 2005. At Wal-Mart's request. to initially be Sold Exclusively in Wal-Mart. ~ Coke and its largest bottler Coca-Cola Enterprises announced that they are Changing the way they Deliver PowerAde in the United States. Altering a Basic Distribution Method for drinks that has been in place for more than a century. Wal~ Coke also now Allows Wal-Mart in on the research-and-development process.High Retailer Involvement WalWal-Mart's Impact extends beyond just small suppliers. . This kind of retailer involvement was Unheard of at Coke a decade ago. established companies like Coca-Cola and PepsiCo do business. it changed the name to Diet Coke with Splenda & launched a separate product called Coke Zero.
. There may be a Dark Side to the Frugal Culture. ~ Employees have said that it Squashes efforts to unionize & doesn't provide Decent Healthcare. The controversies have involved a broad range of topics from. Wal-Mart has come under fire on a number of Labour Issues as well. ~ Outsourcing of jobs.The Controversy «! WalWal-Mart is a Polarizing Force. At the end of 2005. ~ Women have also accused Wal-Mart of Discrimination Discrimination. ~ The company faced dozens of Lawsuits across the country for allegedly not paying workers overtime. ~ The kind of health care Wal-Mart offers to its employees. ~ The company's environmental policies. ~ Wal-Mart selling guns.
executive vice president of WalMart's people division. president and CEO of WalMart Stores. Inc. "You need to look at who's complaining about Wal-Mart" WalYoung told USA Today in March 2006. "If it's not 100 million people shopping there every week & it's not 8.000 people competing for 500 jobs [at a new Atlanta store]. by Wal-Mart that is supposed to spread a +ve message about the company. who is it? They're complaining because they're wrong & they don't understand that ending poverty means generating wealth & not just fighting to redistribute the existing wealth. heads up a group backed Young." . Andrew Young a former UN ambassador & Mayor of Atlanta. Lee Scott.Not every1 is DOWN on Wal-Mart Ambassador Andrew Young with Lawrence Jackson.
is currently growing its same-store sales more than Wal Mart. Wal-Mart's growth in same-stores sales has slowed considerably in recent years. a key measure in the retail industry. 3. Sales at Wal-Mart stores open for at least one year grew. and that the company may have already reached that Threshold. . arguing that Wal-Mart can always enter New Retail Segments. is Saturated with Wal-Mart stores. ~ Target. it didn't sell groceries originally & now that is a huge part of the company's business. compared with a 5. according to the International Council Of Shopping Centres (New York Times).S." Wal~ Also. ~ The U. on average. Wal-Mart also has plenty of growth opportunity in the International Market.6% a month in fiscal year 2005.S. Instead. population already lives within 15 miles of a Wal-Mart. 90% of the U.8% gain for Target. Some experts disagree that Wal-Mart has peaked. Target doesn't just compete on price. measure the sales versus the year before in stores open at least one year. according to "The Wal-Mart Effect. while much smaller.Cri Critics Critics say that Wal-Mart can only push prices so low. it sells style as well as a good price. Same-store sales. After all.
Wal ± Mart¶s 10 Year Income Mart¶ .
The There is Heated debate. . Economists View Debate about whether Wal-Mart is good for the American economy. & well-respected economists come down firmly on Both Sides of this Some experts say it is Good for the economy because it keeps prices low. both at its stores & at other retailers. Other experts argue that Wal-Mart is Bad for the economy because it drives competing retailers out of business & forces manufacturers to move jobs overseas to keep expenses down.
Ark. smaller than 1985: competitors Kmart and Sears. 1979: 1985 Wal-Mart has about 880 stores and $8. 1950: five-andWal1962 Walton opens 1st Wal-Mart in Rogers. 1990: 1991 Wal-Mart opens 1st International Store in Mexico City. 1990 Wal-Mart Surpasses Kmart in size. .The WalWal-Mart 1970 Wal-Mart has IPO.5 billion in revenue. Sam Walton Dies. 1962: 1979 Annual sales top $1 billion. 1991: 1992 Wal-Mart Surpasses Sears in size. 1992: 1994 Wal-Mart Surpasses in size Kmart and Sears 1994: Combined. 1970: Timeline 1950 Walton opens 1st five-and-dime.
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