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MGMT 501 Walmart Presentation

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Lia Gaona

on 3 March 2015

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Transcript of MGMT 501 Walmart Presentation

Employee Relations
Recent raises are a huge step in the right direction

Staffing is too lean causing associates to work longer hours

Unethical labor practices

There are discrepancies between espoused and enacted values

Public perception of worker treatment is still bad
Waste Management
Walmart recently pleaded guilty to six counts of violations toward the Clean Water Act

Resulted in $81M paid to Environmental Protection Agency, additional $110M paid for similar issues across the country to other parties

Specific violation - disposal of hazardous wastes and neglecting the proper procedures according to law, chemicals dumped into sewer waters

Effects - Can poison drinking water for the communities in vicinity of that store

Erodes any credibility for the company and shows great lack in Corporate Social Responsibility (CSR)

Other companies will not want to do business with Walmart to include potentially new and popular retail interests (if nothing is done soon)

Legal fees and compensation will continue to severely reduce the overall margin

(Worst case) Politicians at the local or state level may take advantage of these situations in order to help their own cause, use Walmart as a villain in the community

Recommended Course of Action (COA)

Phase I - Inspection/Correction

Phase II - New Processes

Phase III - Cooperate

Phase IV - Invest in Community

Phase V - New Policies

Walmart & Emerging Markets
Walmart has continuously tried to enter foreign markets without prolonged success
These markets include China, India, Mexico, and Brazil
Instead of continuing to invest in foreign markets and cultures, Walmart continues retreating back to successful avenues such as the United States

What Walmart is Doing Well
Supply Chain

Investing in Domestic
Pledged to spend an additional $50 billion on American sourced goods in 2013 and $250 billion in the future to stimulate American manufacturing.

Progress: It seems that they have only really met with us manufacturers to see their products, From their corporate site it is unclear if they followed through.

Setting Sustainability goals:

Be run by 100% renewable energy.
Progress with energy: 335 renewable energy projects power
Create Zero waste.
Progress: %70-90 of waste that flows through Walmart is now able to be diverted from landfills (ie. Recyclable). Walmart also donated 571 million lbs of food to food banks and charities that would otherwise go to waste.

Sell products that sustain people and the environment.

Other CSR Initiatives:

Walmart will hire any honorably discharged veteran within 12 months of discharge.

In 2013 Walmart upped their charitable contributions to $1.3b from $244 million.
Corporate Social Responsibility
There has been no progress update or other news on money pledged.

The sustainability initiatives are great and have been making tons of progress. This progress has not been communicated to the consumers effectively.

The CSR initiative from 2012-2013 that is lacking any significant updates since then.
Factory Conditions

China is the leading supplier with 30,000 factories producing 70% of all the goods that Walmart sells worldwide
Walmart is the 2nd largest buyer of garments from Bangladesh (5,000 factories)
189,000 workers
60-80 hour workweeks
Paid 13 - 32 cents an hour
Between 2006 and 2012, 704 garment workers were killed in 243 factory fires
Most notable factory disaster is Rana Plaza - 1,138 people killed

Recommended Course of Action (COA)
1. Sign onto the "Bangladesh Accord on Fire and Building Safety"

2. Launch an initiative in China similar to the "Alliance for Bangladesh Worker Safety"

3. Enforce stricter inspections of labor practices

Conduct employee surveys and focus groups to get feedback

Increase ethical oversight and training for managment

Change definition of full time to 40 hours

Aim to have sufficient staff on hand

Work overtime into pay budgets

Advertise employee benefits and perks better to the public
Action Items

Employee Relations - Empower employees to continue building the Walmart brand to its full potential.

Waste Management - Fix current issues, create process to prevent further occurrences

Emerging Markets - Continue building effective models for emerging markets

Supply Chain - Increase worker self-efficacy and overall job satisfaction by improving factory conditions

Walmart, given their size and power, will set the standards that other companies are going to follow
International market income has continued to decline since 2013 and operating margins have continued to decline since 2011
Took a $1 billion loss to sell all stores in Germany
Sold majority of shares in Mexico stores resulting in a 14% loss in regional sales
Ended venture in India to open hundreds of superstores
Closure of 29 stores in China due to mismanagement

Avenues to take for company success
Many of the countries Walmart is failing to emerge with (Brazil & China) preferred retailers that conglomerate into their own economy
Walmart needs to show each developing region that they truly care about investing into that regions infrastructure

Walmart should stop using their U.S. business model while investing in new international markets
Walmart should develop a new consumer model in each respective region they are servicing

To become successful in international markets, Walmart needs to adapt to these foreign cultures
By adapting to foreign cultures, Walmart will gain the respect and loyalty of each respective public they serve
Highlight the hardwork that Walmart is doing to improve the environment and surrounding communities.
Continue to conduct status checks and hold Walmart accountable for continuing initiatives
Dangerous factory and working conditions
Poor self-efficacy and overall job satisfaction of workers
Negative public perception of the supply chain
Full transcript