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Wal-Mart is one most top company in the US leading in retail and other market field like grocery sales and sale of gas. It was founded about 40 years ago in the rural Alkansas by Sam Walton. Since then, the company has multiplied within and without its line if operation to achieve annual revenue close to $250 billion. Wal-Mart has extended its activities from production of its own products such as Ol'Roy dog food and Equate vitamins to banking, sale of used cars, travel and Internet access. The company serves up to 100 customers a week! (Wal-Mart, 2011) a consultant says the company alone accounted for 25% of the US productivity gains between1995-1999. Such gains lead to companies increase in profits and consequently stock prices. People whose stock rose around this time attributes this to Wal-Mart.
Wal-Mart has contributed a lot towards job creation due to its high job retailing. With a population of 1.3 million workers, it is the largest private employing company employing almost twenty folds compared with the other retailers. It has been estimated that Wal-Mart employs one out of 123 workers up to date. Wal-Mart employs thousands jobseekers and pays them competitive wages and benefits. The company has a massive buying power and high technology (its computer network rivals that of the Pentagon) and this makes it to compete strongly with the rival companies and accord its customers with relatively low prices for its products. Wal-Mart is very popular and almost everyone knows about it or has a direct experience with it. (Canadian Business and Current Affairs, 1996)
The company is the leading one in consuming other's consumer producing products e.g. Kraft. Gillette and Proctor and Gamble (P&G). At proctor and Gamble, Wal-Mart accounts the bigger percentage and in the recent years, this has tremendously increased. The company has a direct role to such company's success and any downward or upward trend reflects similar. 450 suppliers have opened offices near the Waal-Marts headquarters in tiny Bentonville, Ark. More than 800 others are expected to be opened in the next five years. (Rich Davies) a local economic development official says that these companies wants to come close to it's headquarter to beat competition.
Wal-Mart has affected the lifestyle of many Americans in matters relating to product choice. P&G for instance are doing away with less quality products from their shelves.eg Crisco and Jif peanut butter. Its intention was to target on well popularized items, like the detergents which are mostly preferred by Wal-Mart and other big retailers. The implementation of this plan helped P&G to greatly improve on their second quarter net income and this lead to increase of total income up to $1.5 billion. Other companies competing with Wal-Mart have improved the quality of their products to level it. Wal-Mart has continued to behind the enormous force in retailing. Its global sales have surpassed those of France's Carrefour which is rated as the world's second best public retailer. In addition, Wal-Mart's U.S. revenue has beaten its closest discount rival together with the U.S.A largest food retailer, Kroger by over four times.
In last year only Wal-Mart's clothing and shoe sales went beyond the total revenue of Macy's, the close relative of Macy's as well as Bloomingdale's department stores. Planet Moon Studios a video game maker in recent times requested for authorization by Wal-Mart to give it a rating for teen so as Wal-Mart has the appeal of the public and in return Planet Moon benefits. Contributing towards this, (Bob Stevenson), CEO, says that Planet Moon did some changes in the coloration and added other features in their product. With these changes the risks were too high.
From mid 1990s, Wal-Mart has diversified to making its own products called the "Private labels". These products ranged from their existing consumer products like the vitamins to hygienic products. Wal-Mart is committed to maintaining its shelves of well known products full to accommodate any demand throughout the year. Indeed, private label products run as high as 30% vs. 15% of brand name items (Burt Flickinger), managing director of consultant Reach Marketing Wal-Mart has led to other smaller companies which get considerable revenue from Wal-Mart to increase the prices of their products due Wal-Mart increasing demand. (Jonathan Feeney) a consumer product analyst at investment firm Sun Trust Robinson. competitor retailers enticed Americans away from Wal-Mart's low-price guarantee through the provision of more selection capacities, offering greater convenience as well as higher quality or better service.
Along with the country's mounting prosperity, Wal-Mart has fought to revamp its down-market, politically untrue image even as other discounter's oblique themselves as more chic palatable options. PepsiCo, which is a preferential mass-market campaign a decade ago, lately skipped Wal-Mart when initiating a new energy drink in goodwill of Whole Foods Market Consumer-products monster Procter & Gamble. Conversely, Wal-Mart's attempt to expand globally has had mixed achievement in wealthy markets. most recently it departed from South Korea and Germany after failing to become accustomed to local tastes so as to achieve economies of scale (Canadian Business and Current Affairs, 1996).
On the other hand, In Japan, the company's low-price, high-volume approach has fought in a country where low prices often associated with to low quality. Suppliers suffer any time the prices of Wal-Mart fluctuates, either way. A company-Rubbermaid increased the prices it charged Wal-Mart due to the hike in the prices they were charged for some of the ingredients they used in making plastic containers. They were provided with an incentive of increased space and this lead to reduced price from competitors and in sequence brought about merging of this company and Newel their rival company.
Toward employment, Wal-Mart's impact was first felt in rural towns of south and mid-west where Wal-Mart started becoming the leading employer and setting the wage rates for all other retailers. This later grew to nationwide levels contributing to slower wage growth throughout the sector where pay for retail workers rose 43% from 1990 to 2001, vs. 50% for non retail workers, according to Bureau of Economic analyst data. Wal-Mart average hourly pay averages $7 to$8 an hour, vs. $11 at Kroger. The contribution of Wal-Mart to this cannot be denied due to its massive control in jobs employment at the time when it created jobs than any other company. While Wal-Mart intends to add close to a million workers in the next few years, the rest of the retailers would only manage only up to about three million cumulatively by the year 2010.Other manufactures in the field is by far this target although they pay their works more.
This has made the workers unions to react sharply claiming that Wal-Mart may drive many US manufacturing jobs abroad out where labor cost are lower owing to them asking for low prices from the suppliers. In productivity, the company's rise in income and its subsequent thrive arose to an extent due to its vastness in using recent computer technology in their business data compiling and communication and the use of modern means in products delivery in its multiple warehouses across board. The company claims to have the USA biggest satellite communications network where one of such link stores to its central points. Supplies can access directly from the computers to track sales of everything which improves inventory controls and cut costs. A company, Kmart, that tried to level its technology with that of Wal-Mart failed and filed for bankruptcy-court protection and this lead to its cutting its employees by a great number and closing some of its stores. Wal-Mart has influenced manufactures to be more cost effective so as to maintain product prices low. The company, for example suggests that a supplier cut its labor costs by condensing their packaging. This close communications between the retailer and the supplier is being adopted by more other companies, including Dell computer, as US puts more efforts to compete aggressively globally (Quinn, .
Wal-Mart will in future be merging with other companies to achieve economies of scale. The companies has been on demand for products selling at a low cost which has partly been influenced Kellogg's purchase of Keebler in 2011, and the merger of Kraft and Nabisco in 2000. Wal-Mart's has continually increased in its production and the company's share earnings are on the continuous rise over the years. This is not a reason however enough to initiate prices increases as some monopolies have done in the past. Wal-Mart would require be more explorative and efficient in product innovation. Its growth could be affected negatively as it expands more to urban areas where employees would demand higher pay rates and other scale of production like land are quite higher. This is one of the reasons the company find tussles in investing in urban areas. It is still possible for Wal-Mart to sail through this stiff economic recovery. According to Hoopes, if a single company attributes only 25% of their productivity, there are other many companies not growing fast like Wal-Mart (Troy, 2001, pp.47).
In its endeavor to improve the quality of products and make them more consumer friendly, Wal-Mart has announced that it is going to reduce the added sugar by 10% and added salts by 25% and do away with all the outstanding industrially produced trans-fats in addition to partly hydrogenated oils in its classified label food products by 2015. For instance, Michelle Obama was there to draw awareness to the news' significant to her crusade against childhood plumpness. Troy argued that Wal-Mart's power on America was a net depressing, justifying in his observation a call for political as well as popular act to inveigle America's principal company to change its ways. Wal-Mart has recurrently occupied in activities meant to change its image with physical measures. Furthermore, Wal-mart has made substantial progress regarding "efforts to greening its stores, reducing the carbon footprint of its supply chain, improving working conditions and employee benefits, supporting healthcare reforms . . . and advancing corporate social responsibilities in its vendor management programs".
A consumer attributes using Wal-Mart's product for various reasons. Consumers are happy with Wal-Mart low prices. Indeed they are cheaper by a third compared to other retailer's prices, and more than half cheaper than supermarket in low income areas. They provide products of good quality and consumer friendly. It is a requirement of Wal-Mart to recent date; circulate the stock on time to avoid selling of expired products. High technology ensures quick delivery as there is no inventory kept. Wal-Mart has two brand names and one store brand name for major product category. Most of its competitors carry at least one national brand and one store brand. The company has employed many low income people who are minorities and finding jobs elsewhere could prove hard due to geographical locations, discrimination and skills issues the company employs on the basis o first come first served.
Other related companies within its neighborhood cannot give the likes of people who work with Wal-Mart a chance to work for them. Wal-Mart has good channeled link which brings together related businesses along busy avenues e.g. Fast food places, banks, cleaners and gas stations among others. Companies in competition with Wal-Mart also set their businesses alongside. The neighborhood enjoys amenities that come alongside .On the other hand; some customers are dissatisfied with Wal-Mart in that it pays the minimum possible wages stipulated by law. Employees have few time outs and have to work extra hours to keep benefits down besides offering low quality beneficial plans. It is a legacy of Wal-Mart to keep its employers working hard whereby cashiers are measured by scans per hour, stock clerks on stock levels, receiving clerks on accuracy and do away. The manager and the management team in all the different sub divisions have all these data with them. The company is leading in US in the manufacture of clothes, toys, sport equipment jewelry and fashions (Bernstain, 2006).
Wal-Mart has indeed driven out local investors in the same field out of business for they cannot offer quality or different product all the same. These employees are rendered jobless which has impacted negatively in the respective societies. On the overall Wal-Mart has contributed to unfair competitions which its result are felt by other company owners and their labors. Other negative aspects include; overspending, and impulse buying attributed by attractive and open display.
In the recent times, Wal-Mart has put forward some measures to upgrade on the environment and enhance energy efficiency. Some of the initial steps include spending large sums of money to improve the efficiency in its trucks fleet by a quarter and by double in subsequent years. It intends to reduce greenhouse gas emissions, cut energy use to considerable levels. The company's managerial team comprehends on use of non renewable energy sources so as to zero rate waste. Some of this form of energy involves harnessing of natural sources like the sun and the wind. When plus and adds are considered, Wal-Mart has far more good to the economy of US and its people at large.
Wal-Mart is the number one retailer in the US and is at the top of the 500 listing. It operates in many countries world-wide and is moving to new countries each year. It has expanded from retailer to other sectors of market place including groceries, gas stations, electronics, and auto maintenance. Its large number of workers and low wages has lead to union's protests against it in additional to local businesses shutting down when Wal-Mart moves in. This is going to see more public affairs department become more and more important. More regulations are going to be instilled against it and the affairs department will have to work harder to make it possible for Wal-Mart to continue to grow. Wal-Mart is going to have to work harder to maintain their good reputation. Wal-Mart's foundation will be increasingly more important for giving things back to the community