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Wal-Mart Case Study

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Sarah A

on 23 April 2013

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Transcript of Wal-Mart Case Study

Wal-Mart Case Study By Mike and Sarah April 3rd, 2013 Summary Wal-Mart is a company based in North America but has become the largest retailer in the world. It is clear that Wal-Mart is growing and gaining international power at an alarming rate. In fact there are 1.8 million associates worldwide. There are also many secondary issues surrounding the Wal-Mart corporation and its large growth. Primary Problem Wal-Mart is dominating the market internationally and becoming too powerful of a company. The root cause of this issue is Wal-Mart’s drastic expansion is forcing other smaller business to close their doors because they cannot hope to match Wal-Mart’s prices or diverse range of products. Wal-Mart uses systems thinking, operating as a giant system broken up into different departments, this systematic structure makes it difficult for small stores to compete, because Wal-Mart has specialized departments such as a pharmacy, grocery section, electronics, car garage and other departments. Due to the fact that Wal-Mart is so large and has so many different products when they move to a new location they cause a wide range of closures to businesses in different industries. Wal-Mart is simply getting too powerful. Secondary Problems
Lack of Corporate Social Responsibility with products being produced in developing countries or by child labour,

Part time employees with little chance of getting benefits or advancing to a high position

Small business closures when Wal-Mart opens in new locations. Solution Boycott Wal-Mart, if people stopped shopping at Wal-Mart it would go out of business. 1 Solution 2 The government could limit the number of Wal-Mart’s in a region to protect local businesses and slow the spread of the large retail giant. Solution 3 Raise awareness of the issue, and promote local businesses. Solution 1 (Boycott Wal-Mart): Pro This option would take money/customers away from Wal-Mart and instead aid local businesses, it would limit Wal-Mart’s power, if enough people boycott Wal-Mart stores would have to close returning business to the local stores. Solution 1 (Boycott Wal-Mart): Con It would be difficult to get people to boycott Wal-Mart as most people shop there. Wal-Mart could sue or take legal action against those who are trying to get people to not shop at Wal-Mart. Solution 1 Summary This solution would not be acceptable to Wal-Mart and they would most likely retaliate with legal action. It would be hard to organize and maintain as majority of people shop at Wal-Mart and will continue to do so. This option only works if the majority of society are against Wal-Mart and agree to boycott it. Solution 2 (Government Intervention): Pro Would stop Wal-mart’s spread locally and into small towns, it would limit Wal-Marts expansion into the international market, it would also limit Wal-Mart’s power overall as a company, the other pro to this option is that local businesses would be protected/gain or maintain business. Solution 2 (Government Intervention): Con What’s to stop the government from then taking control of other businesses?
This would give the government more control, could be battled by Wal-Mart in court, would cause potential employees of Wal-Mart to lose jobs, and could be damaging to the economy. Solution 2 Summary This solution is most effective in stopping Wal-Mart’s expansion into small towns and into international markets.

This option would guarantee the protection of small businesses, but on the downside it gives the government significant control over business in general.

Stakeholders in Wal-Mart would not like this solution because it’s the most damaging to their business. This option is the most effective to limit Wal-Mart’s power but also has the potential to be the most damaging solution. Solution 3 (Raising Public Awareness): Pro This option gains public awareness of Wal-Mart’s growing power, it would allow small local businesses to get promoted and advertised, This option is the slowest of the three, but has a chance of succeeding gradually over time, is completely legal, Wal-mart employees keep their jobs. Solution 3 (Raising Public Awareness): Con This option is slow to bring results, does not actually stop Wal-Mart’s expansion or limit its power, and has the potential to fail.
It also costs money to promote small businesses more, and to gain public awareness and support. Solution 3 Summary This solution would be the most acceptable to the public and to Wal-Mart stakeholders as all actions and promotions are completely legal. Over time as public awareness grows there is a chance for change to occur and Wal-Mart’s power to be limited. This option is expensive, but holds the most potential in solving the overall problem. Recommendation The best/most viable solution is option three, raising public awareness because it has the potential to succeed in limiting Wal-Mart’s influence, while remaining within the law. This option solves the main issues of Wal-Mart having too much power because as public awareness grows there would be a move away from Wal-Mart and back to small businesses. This option is socially responsible because it exposes the issue of Wal-Marts control/power to the general public. The secondary issues would be solved as well because with the public scrutinizing Wal-Mart, they would be forced to ensure all their labour is from legitimate sources. Also the issue of employees having limited potential to advance or gain benefits would be solved because as Wal-Mart downsizes the employees who remain will be more crucial to the business. The StakeHolders in Wal-Mart would not be happy with any of the three options as all work to limit their power, but in this case they would be powerless to stop the spread of public awareness. Wal-Mart cannot do anything to prevent people gaining knowledge about the issue. Conclusion Wal-Mart is a vast internal retail business with significant power and influence in multiple countries. As Wal-Mart spreads to new locations they destroy smaller businesses, their wide range of cheap products preventing other businesses from competing. This brings about numerous secondary problems such as cheap ( child labour) labour from developing countries, and mass groups of part time employees with no benefits working in Wal-Mart stores across the globe. The best way to solve this issue is to raise awareness of Wal-Mart’s growing influence and expansion, in the hopes that in the future people will avoid Wal-Mart and instead spend their money at smaller businesses. Eventually public awareness and promoting small businesses will solve the problem of Wal-Mart’s considerable power.
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