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WalMart : You Hate

The Fact That You Love It

Publicity

COMPETITORS

-Bad Customer Service

-Negative Reputation

-Social Trends

Major competitor: Costco and Target

-similar markets

Online: Amazon

-"The online Walmart"

Employee Turnover

Walmart has seen a 44% annual turnover rate among its hourly employees.

Reason Behind this:

  • Does not provide enough benefits
  • Minimum wages
  • unstable work schedules

Human Resources Strategy

By Kristina Kehyeyan, Dilan Patel, Sydney Jennings, & Alexandra Rodriguez

Business Strategy

The issue

Walmart's high turnover rate has forced the company to recruit, hire, and train new employees, which is essentially more expensive than retaining already-employed employees.

Business Ethics

The study of how ethical concepts are applied to business decision-making.

Growth: When a company grows physically and financially.

Low Cost/Cost Leadership: When a company keeps sales high by keeping operational costs low.

Effect on Local Economy

Business Objective

How They Keep Operational Costs Low

Low-cost operating company based off four dimensions:

Price

Assortment

Experience

Access

  • Low Wages
  • Minimum Benefits
  • Unreliable Hours

  • Costs the local economy money in the long run
  • Adverse effects on health in communities
  • Crime rates negatively altered by WalMart.

Topics of Discussion

Mission Statement

  • Flawed HR Strategy
  • Why Investors Should Be Concerned
  • The Local Economy
  • Major Threats

Rising Crime Rates

"Saving people money so they can live better."

  • Linked to halting decline of crime in many communities
  • Most developing countries almost always saw a rise in crime in areas adjacent to Supercenters
  • Crime rose even through the 1990s, when rates were plummeting nationwide

Negative Impacts on Local Economy

Sources:

Negative Health Effects

Colvin, Geoff. "Have Patience with Walmart's Wobble." Fortune Have Patience with Walmarts Wobble Comments. Fortune, 15 Oct. 2015. Web. 30 Nov. 2015.

Ross, Sean. "The Biggest Risks of Investing in Wal-Mart Stock." The Biggest Risks of Investing in Wal-Mart Stock. Investopedia, 13 Oct. 2015. Web. 30 Nov. 2015.

Walmart,. (2015). Walmart Press Release. Retrieved from http://s2.q4cdn.com/056532643/files/doc_financials/2016/Q3/Press-Release.pdf

  • Causes businesses to fail resulting in an avg. of $14 million of lost wages for a community over 20 years
  • An additional $13 million lost economic output over 20 years
  • Rapid Expansion since the 1980s led to the closing of about 40% of businesses in local areas
  • Average BMI raises by .24 points for the average resident near WalMart
  • Average obesity rate also raises by 2.3% in local area
  • Since the rise of WalMart in the 1980s researchers have correlated the average 10% increase in obesity rate to it

Declined Sales

Falling Economic Profit

CFO Charles Holley told Stock Analysts:

  • Year's sales/profits would be lower than forecast
  • Profits will continue to decrease

In October 2015, 10:36-10:56 AM:

$23.4 billion of market value was lost

  • Earnings are expected to drop 6-12% this year.

Investors should be concerned about Wal-Mart because same-store sales have been decreasing.

Source: WAL-MART QUARTERLY EARNINGS RELEASES

Lawsuit Risk

5,000 lawsuits/year

  • side effect of being in every market and selling almost every product

Market Risks

  • Global Presence
  • Different cost of regulatory compliance
  • Business Cycle
  • Interest Rate
  • Exchange Rate

Minimum Wage Risk

  • Increased minimum pay for their employees
  • 500,000, $1-1.75
  • -Wal-Mart already suffers from lower EPS

MAJOR THREATS

  • HIGH EMPLOYEE TURNOVER RATE
  • COMPETITORS
  • BAD PUBLICITY

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