WALMART FUTURE SUSTAINABILITY

Walmart Future sustainability

Executive Summary

Wal-Mart has undergone many growth stages since Sam Walton first decided to be the best retailer in the world. His initial strategy was to target low-income families in rural areas by offering significantly lower costs. Wal-Mart leadership has done well to put the right people in the right seats on the bus to drive the company forward. Sophisticated technology boosted supply operations such that Wal-Mart's efficient retail stores became the manifestation of a fast and flawless distribution business. When Glass succeeded Walton, he believed that “technology would ultimately drive this business to be the size that it is” which was the fundamental difference that set his approach apart from that of Walton's (Turock, 2004). The late 80s and 90s began a technology boom, with the computer industry making rapid advancements. A more advanced distribution system would move product faster and more efficiently, allowing Wal- Mart to maximize use of their suppliers as well as internal distribution lines. Glass used cutting edge technology to create a logistical competitive advantage in “an industry with high volume, inelastic pricing, fragmented market share, and inefficient distribution.

Background

The way market structure trends go Wal-Mart will most likely still go on practicing a little bit of all the structures, ideal competition, monopolies, monopolistic competition, and oligopolies. Which market trend will be used will depend on what part of the world Wal-Mart is dealing with at the time. Wal-Mart reached out to external stakeholders to try and develop areas of maximum environmental impact and identify key networks which would help achieve these goals. In return for participating in these value-added networks, participants would receive information about as well as a say in Wal-Mart's operations.

Wal-Mart's Sustainable Value Networks

Each of the 14 networks serves at least one of Wal-Mart's three environmental goals.

Networks

Global Greenhouse

Gas Strategy

Alternative Fuels

Global Logistics

Energy, Design,

Construction, &

Maintenance

Operations and

Internal

Procurement

Packaging

Chemical Intensive

Products

Seafood

Electronics

Food & Agriculture

Forest & Paper

Jewelry

China

Textiles

At the center of the business sustainability strategy pursued by Wal-Mart is a shift from generating additional value through price-based interactions, relationships with nonprofits, suppliers, and other stakeholders. Through the above networks, Wal-Mart is gaining a system perspective which helps retailers find ways to address environmental issues. In exchange for these suppliers addressing the issues, nonprofit network members gain huge leaps towards their overall missions because of the scale of the operations at Wal-Mart. Suppliers also enjoy not only the stability that more intimate relationships with Wal-Mart brings, but also the guidance and support from Wal-Mart's nonprofit partners.

Sustainability Strategy

The Wal-Mart sustainability strategy no doubt looks to be off to a promising start; they must not become complacent and must press-on carefully in order to make these networks sustainable and able to expand without interruption. The first thing they need to do is manage these partnerships carefully in order to keep costs down. They also need to be able to manage the balance between offering “green” and conventional “non-green” products in its stores. Finally, because of the very high number of nonprofits in the network, Wal-Mart must manage the loss ...