Case 22: Walmart

1. Problems:

• Bad labor standards

• Political corruptness

• Overall bad citizenship

• Huge pursuit of low costs resulted in substandard wages

• Insufficient medical benefits

• Too much merchandise sourcing from Chinese suppliers

• Detracts from small merchant atmosphere

• Puts many other smaller stores out of business

• Used illegal immigrants for cleaning their stores

• Discrimination against women with pay, promotions, and job assignments

2. Strategic Analysis:   Wal-Mart is losing business to rivals of different shapes and sizes.
Customer traffic at U.S. stores has declined for five straight quarters. Meanwhile, sales have
surged at discounters like Dollar Tree and Family Dollar Stores. Those chains often charge less
than Wal-Mart, though they carry a much smaller selection of items. So Wal-Mart is caught in
the middle. If you want something quick, go to a convenience store. If you want something
cheap, go to Amazon. Wal-Mart’s place is becoming smaller and harder to find. Wal-Mart’s
assets are a mixed blessing. Managing a whole lot of real estate assets can distract
management from its real challenge—creating a business that has a future. Besides, the stores
are big and clunky and located in places that people used to be willing to drive to, just to buy
cheap stuff. Now that its stuff is no longer the cheapest, distance becomes an issue. It is much
easier to walk to the computer. Wal-Mart’s perspective is essentially “You buy what we sell,
because it’s cheaper.” Now that what Wal-Mart sells is no longer cheaper, that business model
is broken.

3. Recommendations:

• Begin by asking who its customers are and what would delight them

• Stock products people actually want, not just what makes money

• Implement self-checkout stands

• Treat its own staff right: If they were treated better, their attitude would be better, and they might be more inclined to find other ways that would delight the... [continues]

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