Wal-Mart: Nonmarket Pressure and Reputation Risk (a)

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WRITTEN ANALYSIS AND COMMUNICATION I

Assignment No. 4

Wal-Mart: Nonmarket pressure and reputation risk (A)

Instructor: Prof. Meenakshi Sharma

Academic Associate: Prathyaksh Janardhanan

Submitted By:

Shantanu Shekhar

Section C

Date of Submission: 23 August 2009

[pic]

XYZ

ABC Management Consultants

1234, Red Street

Bentonville, Arkansas

H. Lee Scott

CEO, Wal-Mart

2300, White Lane

Bentonville, Arkansas

February 14, 2006

Sir

Sub: Wal-Mart’s nonmarket strategy and reputation risk

You will find enclosed a report on the development of a nonmarket strategy to address the criticism faced by Wal-Mart and change its deteriorating reputation. The report includes an analysis of various possible alternatives. It recommends improvement of Wal-Mart’s community presence and an increase in transparency to re-align public perception.

Yours sincerely

XYZ

Enclosure: Report and Exhibit

Executive Summary

Implications of various business policies of Wal-Mart have subjected it to negative news coverage on environmental and labour issues, and allegations of inducing a negative effect on local communities. The opposition to Wal-Mart is attributed to vested interests of unions, politicians and interest groups.

To improve Wal-Mart’s reputation, the alternatives of projecting Wal-Mart as an employer of choice, improving its community presence through increased transparency and compromising with the unions are explored by the report. Based on customers’ perception, associates’ perception, issues countered and synchronisation with company policies, it is recommended that Wal-Mart’s community presence be improved along with an increase in transparency to re-align public perception.

WORD COUNT: 109

CONTENTS
| | | |Situation Analysis….……….……..………………………………….. |01 | |The Objective..……..……….………..……………………………….. |02 | |Statement of Options……………..….…………………………..……. |03 | |Criteria for Evaluation…….………………………………………….. |03 | |Evaluation of Options………………………………………………… |03 | |Recommendation..……………………………………………………. |05 | |Action Plan……………………………………………………………. |05 | |Exhibit.………..………………………………………………………. |06 |

Situation Analysis

An insight into what has led to this reputational crisis can be gained by looking at the company policies and their implications. Wal-Mart has been successful in avoiding unionisation - the problem partly stems from here. In addition, Wal-Mart’s low prices and market domination have forced the hand of unions to compromise and agree to lower wages for their employees working in other supermarkets, such as Safeway and Albertsons. It can be inferred that the disgruntled and threatened unions are campaigning with a vengeance to cater to their own vested interests.

Expansion being another component of Wal-Mart’s strategy, the resistance from local businesses, NIMBY groups and unions to attempts to expand in the financial sector and to open stores in urban areas indicates a bias; meant to deter Wal-Mart from shifting its focus to the higher-income customers to complement the focus on existing customers and associates. The strongest voice against Wal-Mart has been coming from the unions and their allies, who...
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