The Wal-Mart Effect

Fishman, Charles (2006). The Wal-Mart Effect and a Decent Society: Who

Knew Shopping Was So Important?

Introduction

Wal-Mart is one of the leading retail companies of the world and is the huge retailers founded in 1962 by Sam Walton which highlights the importance of giving low rates always or selling the goods at the lowest prices possible to its consumers. Wal-Mart focuses on delivering low prices to its customers in such a way that is way different from its competitors and this practice has created different criticism for Wal-Mart related to the employment practices it follows, its supplier relations and the impact of Wal-Mart on local economies. According to Fishman the Wal-Mart Effect has two perspectives to be looked and they are both directly and indirectly. The competitors have to eventually lower down their prices in a certain area or surrounding where Wal-Mart actually having its operations. In one of the featured frontline documentary professor, Edna Bonacich of U.C. Riverside said that Wal-Mart is following one of the system referred to as “the pull system” which basically relates to the retailers that make decisions and collects information on what is being sold and then finally let know the manufacturer all the specific details of what and when to produce (Frontline 2004) it is basically a one-sided approach.

Discussion

Environmental Analysis

Providing lower prices is one of those elements that created a lot of consequence for Wal-Mart because it ended resulting in lower wages, cheap quality and poor products, pressurizing its suppliers and off-shoring of jobs. This lower price strategy makes it very clear that Wal-Mart basically focusing or favoring on only one group of stakeholders i.e. it's customers whereas, neglecting all others like its employees and other businesses with which Wal-Mart is in relation nationwide and as well as worldwide.

Key Issues and Stakeholders in the Case

Basically, Wal-Mart operates on the basis of a social institution rather than having processes as a corporate system. Wal-Mart has been facing troubles creating balance and harmonious interactions between its stakeholders. Wal-Mart always had a lead to its competitors and always makes a good use of technology specifically in managing inventory and at the same time having a good reputation throughout United States but has overcrowded market with high saturation in US due to which expansion is necessary. Wal-Mart faces high turnover rate of employees because employees are not attracted towards the low pay rates and the lack of benefits being offered to them. The low pricing principle was coming at the cost of many other people and favoring of one stakeholder is unethical in all the business practices. Wal-Mart's stock price started falling in international locations because of lack of economies of scale and is exposed to external forces.

Stakeholder Analyses

Stakeholders

Interest

Sources of Power

Customers

Customers always shop for the good value being offered to them with strong emphasis on customer.

Customers are given all those things that they want and when they want with all the value.

Calm, pleasant, and all customer friendly environments are provided.

Exchange and refund policy with all satisfaction ...