Wal-Mart: the Main Street Merchant of Doom.

Subject: Wal-Mart: The main street merchant of Doom.
Date: 01.28.2010

ISSUES:
• Largest purchase made from overseas which forced local manufacturers out of business.
• Oppositions from labor unions and activists organizations regards to low wage, low benefits and taking advantage of illegal immigrants.
• Gender discrimination against women.
• Most sued company in America in respect of lawsuits.

RECOMMENDATIONS:
• Purchase from local manufacturers so that they are not out of business. Will benefit the region to develop.
• Should work on the welfare of the employees as they are the assets of the company.
• All genders should be given equal opportunities.
• Detect the route cause of the issues and rectify them to avoid future problems of lawsuits.

COURSES OF ACTION/ALTERNATIVES:
• It can save the local manufacturers from the episodes of global recession. But if purchases are made from other countries there are alternatives for a company.
• A revision should be made in respect of the benefits of the employees, which may render many jobless.
• Need to focus on development of employees irrespective of their gender. If not then there will be male dominant workforce and will effect the reputation of the company.
• Appoint a specialist team to detect the route cause to avoid future lawsuits against the company.

EVALUATION/SELECTION OF BEST ALTERNATIVE:
• Give an opportunity to small merchants to work with the company and it can be proved useful.
• Provide good benefits to the employees so that they are motivated to work loyally.
• Form an alliance with an external party to help solve the problems of the employees.
• Stop employing employees who prove to be a liability for the company.
• Avoid cheap labor by not employing illegal immigrants.
• Revision of benefits strategy. Limited risk initiative.

IMPLEMENTATION PLAN:
• Purchasing from the local market at a reasonable price will lead to good business relations. Will increase the market value of the company locally and internationally. It will create an interest in other manufacturers and in turn make business stronger.
• Stock ownership and profit sharing with employees.
• Good practices lead to community involvement
• Realign health insurance.
• Lower life insurance coverage levels.
• Capture savings from initiatives to improve labor productivity e.g. reducing labor work hours.
• Offer a pillow of other benefits from which to choose e.g. paid time off, education etc.
• Restructure the retirement plan to reduce cost and help associates better save for retirement.
• Redesign benefits such as job design to attract more healthier and productive workforce.
• Gender discrimination should be eliminated.

Exhibit – 1 SWOT Analysis
Strengths:
1. By 2007 Wal-Mart’s sales had grown to $345 billion and has been named “retailer of the century” by Discount Store News, made Fortune magazine’s list of the “Most Admired Companies in America” and the “100 Best Companies to Work For”
2. It has a reputation for value for money, convenience and a wide range of products all in one store and made the customer feel homely when a customer enters Wal-Mart.
3. Mr. Samuel Moore Walton was a strong promoter of “10-Foot Rule”.
4. It has the core competency involving its use of information technology to support its international logistics system.
5. Wal-Mart’s one of key to success is its people. Wal-Mart's business and it invests time and money in training people, and retaining a developing them.
6. Wal-Mart has been the innovator of “store within a store” concept.
7. 25% of the U.S. economy’s productivity gains from 1995 to 1999 came from efficiencies of Wal-Mart.
8. Overhead expense was low as compared to its competitors and in respect to average earning it was more then their competitors.
9. Stock ownership and profit sharing with employees.
10. The Buy American plan was one of Wal-Mart’s early efforts at corporate social responsibility. The plan had restored 4,538 jobs to the American economy and its people, in February 1986 after 12 months after the implementation of its plan.
11. Inflation cutter. As per the economists Wal-Mart has single handedly cut inflation by 1% which has saved customers billions of dollars annually.
12. Customers per week – 127 million in US and 176 million worldwide.

Weaknesses:
1. The company is global, but has a presence in relatively few countries worldwide.
2. Wal-Mart sell products across many sectors such as clothing, food, or stationary, it may not have the flexibility of some of its more focused competitors.
3. Initially when Wal-Mart made purchases from abroad forced many U.S. manufacturers out of business.
4. Gender discrimination at workplace against women.

Opportunities:
1. Form a strategic alliance with other global retailers and focusing on tapping the retail market in China and Europe.
2. The stores are currently only trading in few countries. Therefore, there are tremendous opportunities for future business in expanding consumer markets, such as China and India.
3. Wal-Mart has been successful in expanding overseas by encountering some resistance and challenges.

Threats:
1. Wal-Mart is considered to be the “most sued” company in America in respect of lawsuits. About every other hour of every day of every year, Wal-Mart gets sued. These type issues will destroy the image of the company as a whole.
2. It is being target of competition locally and globally.
3. Being global retailer means that you are exposed to political problems in the countries that you operate in.
4. Intense price competition is a threat.
5. Facing new oppositions from labor unions, other activist organizations and lawsuits with respect to overtime, paying few or low benefits and taking advantage of illegal immigrants.
6. Small town do not want entry of Wal-Mart.

Exhibit – 2 Factor Analysis
Factor Criterion Priority
Local Purchase Local purchase made will lead to decrease in transportation cost as well as disputes. B
Focus on Europe, China and India The retail markets in these areas have not been tapped. Need to take the opportunity to explore the retail market in these areas to help the company expand globally. B
Focus on external competitors while expanding globally Since they are large it is necessary for them to be alert for its competitors. A
Need to be cultural friendly If we respect one countries culture it will be easy for establishing in that country. A
Eliminate gender discrimination If the issue of gender discrimination is resolved then employees will be motivated to work for the company. A
Employment Package In order to retain good employees their employment package should be revised. A
Entry in small towns To get entry in small towns it has to look into the interest of the locals. At present it is not a priority as it involves lot of investment. B