Sustainable business development strategies and implementation

Sustainable Business Development

Wal-Mart is one of the leading corporations at the global level and the ultimate leader of the American retailing industry. The strong position of the company within the national industry is further more attested nowadays, as the economy poses immense risks for the companies. In this setting nevertheless, Wal-Mart continues to thrive and to register increasing revenues and profits (Website of the Wal-Mart Stores, 2012).

The success of Wal-Mart can be attributed to two specific elements:

The ability to attract consumers through the offering of the lowest possible price, and the creation of scale economies and competitive advantages that help it operate in an efficient manner to minimize costs and maximize results.

In other words, the business approach implemented by Wal-Mart was one based on operational efficiency and cost reduction to a minimum. This approach allowed them to provide customers with the lowest possible price, attracting as such millions of price sensitive consumers in America, but also across other global regions as well.

Still, the business model implemented by Wal-Mart has widely been criticized. In other words, stakeholders from both within as well as outside the firm have pin pointed to numerous shortages of collaborating with Wal-Mart. These are best centralized in Robert Greenwald's 2005 documentary Wal-Mart: the high cost of low price. In it, the following issues are forwarded:

Wal-Mart cut personnel costs to a minimum by offering its employees minimum wages and not providing them with adjacent benefits, including adequate health care

Wal-Mart asked its employees to put in long hours and did not pay them for the extra effort. One employee recollects that she would often be asked to complete hour long tasks, ten minutes before her shift was over. Since the task had been assigned during her shift, she would not be paid for the additional time spent in the firm.

The Wal-Mart employees have also argued that they felt discriminated against, especially when competing for managerial positions. The company has the good habit of promoting its own employees into middle management functions, but they seem to prefer white males rather than any other category.

Customers have often complained that the quality of the products, as well as the services at Wal-Mart is decreased. The low quality of the services could be pegged to the low levels of satisfaction on the part of the staff members, and the low quality of the products could be pegged to the fact that the company strives to import products from the most cost effective regions and to save on transportation as well. The quality of the products tends to decrease throughout these transportation and long storage processes.

Local farmers often point out that their fresh produce are being lost as a result of natural decay as Wal-Mart imports its fresh produce, allowing the local crops to rot and subsequently causing impressive financial losses to the farmers

Customers and employees alike have complained that Wal-Mart filled its stores with cameras and security agents to prevent any thefts, but did not do the same in its own parking lot. Here, in the absence of security and adequate lighting even, people were assaulted and even killed.

Ultimately, at the community level, Wal-Mart is often blamed for leading to the bankruptcy of traditional mom & pop stores and supporting the demise of the American way of life (Greenwald, 2005).

The complaints centralized in the documentary reveal high degrees of discontent at the level of stakeholders both within the firm, as well as outside it. Within the company for instance, the employees pin point to a wide array of uncompetitive and demotivating practices. Within the external environment, complaints are forwarded by customers, local farmers and various other members of the communities in which the firm operates.

All in all, it becomes obvious that the business model implemented by Wal-Mart is not a sustainable one in the long-term future. The company is still registering success as it implements the low price strategy, which appeals to people especially in the context of the internationalized economic crisis. Still, such an approach to business is not sustainable within the long-term.

In order to ensure its long-term success however, it is necessary for Wal-Mart to address each and every aspect of the complaints forwarded by the various stakeholder categories. And this is important not only to satisfy the isolated stakeholder groups, but even more so as this discontent tends to generalize and would impede the company from attaining its objectives.

In this setting then, it is necessary for Wal-Mart to devise a new business approach which is more sustainable, and through which it creates more value to all customers, business partners, employees and the general communities in which it operates. Some recommendations in this sense include:

Developing and implementing training programs for the staff members, and then presenting them with promotional opportunities

Eliminating all signs of discrimination

Presenting the staff members with incentives to increase their performances, such as better medical coverage, performance-based bonuses and salary raises. At this level, it is also important to regulate the approach to overtime.

Increasing the quality of the supplier contracts and eliminating cost as the single and most important criterion in choosing purveyors (American Society for Quality)