walmart case summary
Walmart Supply Chain Controversy
August 29, 2005 Hurricane Katrina hit the Louisiana coast and Wal-Mart was one of the main sources of aid of this disaster. Their efforts included personally helping their associates with the disaster relief, setting up and re-opening he affected stores as soon as possible, and even worked hand in hand with government relief agencies. Their trucks were the first to arrive with emergency relief supplies. This was a great act that helped Wal-Mart in the short and long run with their positive media image. On the other hand, Wal-Mart had been struggling with some very negative propaganda. September 2005 a lawsuit was filed against the company on behalf of Wal-Mart workers from China, India, Indonesia, Nicaragua, Swaziland, and California. They accused it of not complying with contractual obligations of their Standards for Suppliers Agreement, and claiming that they did monitor and follow the Code of Conduct. Workers accused the company of violating their wage, overtime, and right to organize. Basically many times violating their human rights and taking advantage of looser labor regulations abroad. In response, Lee Scott Wal-Mart’s chief executive decided to develop a series of reforms including a new public relations strategy.
Wal-Mart’s founder Sam Walton wanted to “bring big-city discounting to his corner of the rural American South,” offering low prices every day. The strategy was simple, sell cheap, so the company worked very hard to lower costs by buying directly from manufacturers and always increasing workers’ productivity. After Walton’s death, the company went on with an accelerated new technologies and globalization of its operations. From 1995-1999 Wal-Mart alone gained 25% of productivity of the US economy. Also, by 2004 it became the largest importer from China in the world (10% of all China’s exports.) With this huge market power, Wal-Mart was able to exert lots of power over its business partners and employees. They
August 29, 2005 Hurricane Katrina hit the Louisiana coast and Wal-Mart was one of the main sources of aid of this disaster. Their efforts included personally helping their associates with the disaster relief, setting up and re-opening he affected stores as soon as possible, and even worked hand in hand with government relief agencies. Their trucks were the first to arrive with emergency relief supplies. This was a great act that helped Wal-Mart in the short and long run with their positive media image. On the other hand, Wal-Mart had been struggling with some very negative propaganda. September 2005 a lawsuit was filed against the company on behalf of Wal-Mart workers from China, India, Indonesia, Nicaragua, Swaziland, and California. They accused it of not complying with contractual obligations of their Standards for Suppliers Agreement, and claiming that they did monitor and follow the Code of Conduct. Workers accused the company of violating their wage, overtime, and right to organize. Basically many times violating their human rights and taking advantage of looser labor regulations abroad. In response, Lee Scott Wal-Mart’s chief executive decided to develop a series of reforms including a new public relations strategy.
Wal-Mart’s founder Sam Walton wanted to “bring big-city discounting to his corner of the rural American South,” offering low prices every day. The strategy was simple, sell cheap, so the company worked very hard to lower costs by buying directly from manufacturers and always increasing workers’ productivity. After Walton’s death, the company went on with an accelerated new technologies and globalization of its operations. From 1995-1999 Wal-Mart alone gained 25% of productivity of the US economy. Also, by 2004 it became the largest importer from China in the world (10% of all China’s exports.) With this huge market power, Wal-Mart was able to exert lots of power over its business partners and employees. They