Walmart Manages Ethics and Compliance Challenges
Part 1 Introduction
Walmart Stores is the world’s second largest public corporation with its mission to help people save money and live better. Meanwhile, however, it is also a hugely controversial company with various scandals and criticism in terms of business ethics. This case begins with briefly introducing the growth of Walmart, and then talks about how Walmart deal with its ethical issues concerning its stakeholders including competitors, suppliers, and employees. For its competitive stakeholder, the greatest complaint against Walmart is it puts other companies out of business. As for its suppliers, Walmart works with suppliers to reduce costs of packaging and shipping, which lessens costs for consumers, and most companies believe supplying Walmart is the best thing for their business, but the constant drive by Walmart for lower price can negatively affect suppliers. Ethical issues involving its employee stakeholder include low wages and benefits, Walmart’s stance on unions and workplace conditions and discrimination. The case also discusses other ethical issues concerning these stakeholders including leadership misconduct, bribery and safety. Walmart has suffered significantly from these scandals. The analysis describes how Walmart respond to these concerns, as well as recent endeavors in sustainability and social responsibility. At last, the case concludes by examining what Walmart is currently doing to increase its competitive advantage and improve its ethical reputation. Part 2 SWOT Analysis and Answer to the Questions
This is Walmart Store Inc. SWOT analysis based on the information from this case and its official website. Strength
1. Large scale of operation. With 2012 net sales of more than $443 billion, 10,130 stores and more than 2 million employees, Walmart is the largest grocery chain that no other retailer can match. Large scale of operation make Walmart obtain greater buyer power than competitors. And larger scale results in lower prices that attract more consumers. 2. Sustainable supply chain and low cost strategy. Effective management of supply chain is one of the most important factors for Walmart success. Walmart works with its suppliers to reduce costs by expecting them continually to improve their system. 3. Wide range of products. Wider range of products than any other retailer attracts more customers to Walmart stores, and meanwhile because of the volume of products it requires, many suppliers believe supplying Walmart is the best thing for their business. 4. International operation. Walmart does not only rely on sales from US stores, foreign markets also make Walmart’s rapid growth. Weakness
1. Lawsuits related to ethical issues. Walmart faces lawsuits every year such as labor related lawsuits, which costs millions of dollars for the company. 2. High employee turnover. Due to poor work conditions, low wages, unpaid overtime work and discrimination, Walmart suffers from high employee turnover that increase firm’s costs. 3. Negative word-of-mouth. Walmart’s reputation has been damaged for its various negative report such as bribery of authorities, safety issues, as well as poor work conditions. Opportunities
1. Online shopping growth. With online retail increasingly growing in the US and other foreign countries, Walmart has huge opportunities to start up its online retail market. 2. Retail market growth in developing countries. Since retail market is growing in emerging markets every year, Operating in developing countries such as Brazil, China and Indian is a huge and sustain opportunity for Walmart’s revenue growth. 3. Recognition of supermarket chain products. More and more consumers accept supermarket own label product compared to other brand products, which is a great opportunity for Walmart to increase the number of its own label products in its store and earn...
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