Wal-Mart, one of the largest retailers and employers in the world, has surged to the top of the business world through its various control mechanisms. Its market power, 2nd mechanism, third mechanism, and fourth mechanism, are essential to its success, but there are also some negatives to deal with. The very things that have made Wal-Mart successful have also made the store a target of immense criticism and attacks from activists and even politicians. Wal-Mart may be as hated by others as it is loved by its customers, but nobody can deny its success. That success, however, is dependent on the goodwill of consumers, so Wal-Mart has begun to make some moves to shore up its public image. Despite these efforts, many of which smack of PR initiatives rather than pro-social change, Wal-Mart continues to be harshly criticized. As far as the development of a "balanced scorecard", (see Kaplan and Norton, 1992) Wal-Mart has a long way to go.
[...] Wal-Mart is well-known for entering towns and them dominating their retail economies, as superior pricing and product mixes (the most popular of everything from CDs to groceries to furniture and clothing) allows them to outcompete the local stores. However, Wal-Mart makes sure that it maximizes its gains by carefully selecting and re-selecting locations for its stores. Biasiotto and Hernandez (2001) note: For example, in 2000, Wal-Mart opened 77, refurbished 140 and extended/relocated 115 stores; over two-thirds of their location decisions involved existing stores. [...]
[...] 42) Vlasic "begged" Wal-Mart to raise its price, and eventually Wal-Mart did. Now Vlasic, though bankrupt (not due to the gallon jars) sells pickles at $ 2.79 for half a gallon. However, there remains enormous waste. Fishman (2006) notes that the product itself a gallon jar of pickles was more of a brand builder/loss leader than anything else, a representation of how inexpensive a sense of "plenty" could be for Wal-Mart shoppers. However, most families cannot eat a whole gallon jar of pickles; most of them eventually find their way to the garbage. [...]
[...] Rugman (2006) put it simply: Wal-Mart is the world's largest company. As such, however, it extracts significant resources from the economy, from its personnel, and from the environment, leading to a radically unbalanced scorecard. Customers and shareholders are prized, but other stakeholders: communities, competitors, vendors, employees, and the environment (and everyone who lives in it) is externalized and harmed by Wal-Mart's sheer size and interest in avoiding PR problems without actually solving problems of impoverished employees and overdevelopment of Wal-Mart stores. [...]
[...] 51) Many Wal-Mart employees buy into the "family friendly" concept, and also enjoy shopping at Wal-Mart (and using their employee discounts), and are thus willing to go very far for the store, both figuratively and literally. Wal-Mart uses its valuable retail space to dictate terms to those few other retailers it cooperates with, and does all it can to replicate the retail services at a lower price in order to minimize and potentially replace its own vendors and clients. Sam's Club products, such as sodas, which are cheaper than Coke and Pepsi, and sold alongside of them, is another major example of this control mechanism. [...]
[...] As Wal-Mart positions its stores and products to meet the lowest wages and prices that the market can bear, it is no surprise that human capital is not a locus of heavy investment. The second perspective is the business processes perspective. Here, Wal- Mart shines. Wal-Mart is almost completely oriented towards business processes and support processes. As described above, Wal-Mart owns its own infrastructure and uses its influence with wholesalers and other retailers to create a product mix exclusive to its stores. [...]
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