The Price-Sensitive Affluents, Wal-Mart has learned (Wal-Mart Annual Reports) is more interested in finding an exceptionally good deal and not necessarily concerned about the shopping experience. This is particularly true as one of the strongest factors influencing the execution of their strategy, the emerging global recession during this timeframe, takes hold. Again as with the Price Value Shopper and the paradoxical purchasing patterns of the Brand Aspirational segment show, the cost savings, accuracy, and quality of products delivered with the Wal-Mart supply chain are much more important in the long run relative to store accoutrements and improvements. Admittedly nearly two dozen superstores are very dated in their decor and layout and do need to be re-vamped (Frazier, 38). Yet as this analysis of the customer segments shows based on Wal-Marts' filings with the Securities and Exchange Commission over time (Wal-Mart Annual Reports), the far greater contributing factor to growing same-store sales performance is concentrating on the supply chain initiatives and strategies delivering new suppliers with innovative new products at prices that cannot be found anywhere else. There is the expectation across all of these three most strategic segments that uneatable prices is the most critically important concern, followed by faster checkout and wider isles (Wal-Mart Annual Reports). Wal-Mart must keep these expectations and requirements in context if they are to overcome this first and most critical challenge of growing same-store sales in their most critically important segments over time.
Human Resources Lack Compliance and Governance
The lack of compliance and governance, and the lack of a Corporate Social Responsibility (CSR) initiative to unify the global Human Resources of Wal-Mart and its suppliers have significantly degraded the brand of the company. Accused of allowing and even promoting its suppliers to use child labor and unethical sourcing practices globally to gain the best possible price (Fishman, 69, 70) Wal-Mart has shown the dark side of their low price leader strategy. There is are also claims of age and gender discrimination in their stores and how they are run, and the use of illegal immigrants hired as cleaning crews to save on healthcare costs (Department of Labor, 2005).
As if these claims were not enough, statistical analysis of the hiring practices of Wal-mart show that there is rampant age and gender discrimination at the department level throughout the company's many stores and locations (Drogin, et.al.) The deliberate strategizing of how to supplant and even replace their own healthcare responsibilities to workers through reducing their hours just enough to get away from the legal liability of providing healthcare but employing them enough to have Medicaid has been documented by the U.S. Government and led to substantial fines for the company as well (Department of Labor, 2005).
In response to these claims, Wal-Mart initially refuted the fact that there was a significant difference in pay scales and promotions for men vs. women in their stores. This has since been proven to be more of a public relations strategy than an actual Human Resources (HR) strategy as shown by the statistical analysis of Dr. Richard Drogin (4, 6-10). Dr. Drogin's analysis shows that even when women have worked nearly a decade for Wal-Mart and have nearly perfect performance records they are routinely passed up for promotions relative to their male counterparts. The Drogin analysis (et.al.) also shows that women have significantly less opportunities to gain senior management positions within the company as well. Based on Dr. Drogin's analysis the difference in Regional Vice President and General Manager salaries showed how dramatically different the acceptance of women are in these ranks of Wal-Mart. Only 10.3% of the Regional VP and GM positions are staffed by women as of the timeframe of this case study. According to the Drogin analysis, (26) women in these positions earn $279,772 versus $419,435 for their male counterparts, over a $139,000 difference. Women it appears in the Wal-Maret culture are destined to be Associates with very few being moved into management positions.
Taking the analysis of HR practices to the store level shows a different aspect of the approach the company relies on to ensure a non-unionized workforce. Combating the entrance of unions, Wal-Mart typically sets the target of full-time workers at 70% of an entire store staff (Department of Labor, 2005). This is consistent with their approach to staffing a typical 24-hour SuperCenter with approximately 450 total employees, which yields on average 315 as full-time associates (Wal-Mart Annual Reports). From the analysis completed by Dr. Drogin (25, 26 -- 30) less than 23% are minorities. Wal-Mart relies on a unique management structure to accomplish...
Costco Case Costco: A Case Analysis Costco has long been a retailer of lower-priced goods. Now, the company is moving toward services like insurance, credit cards, phone plans, printing, and other options that could be accessed with a specific membership level. That level would cost users $100 per year, but testing of the options has been very positive in the majority of cases. Still, Costco has much to consider when it comes
Costco Warehouse Clubs Costco Wholesale vs. Sam's Club vs. BJ's Wholesale The main strategic issue that is faced by Costco (and by Sam's Club to a lesser extent) is the fact that it is having trouble competing with BJ's Wholesale on some key factors of customer service. Costco is a warehouse-style retailer, just like the other two companies. Typically, these companies offer lower prices, but consumers who shop there also need to
Costco The case notes that Costco's mission is "bringing the highest quality goods at the lowest possible prices while providing excellent customer service and adhering to a strict code of ethics…" and then the mission outlines the code of ethics. The company's operations clearly stick to this mission statement. This is possible because the mission statement is clear, and it specifically relates to what the company does. It hits upon a
Costco Wholesale Corporation is one of the membership warehouse chain operators across the globe. Costco Wholesale Corporation operates under the influence of the standards and regulations of the Wholesale Club Industry. The organization focuses on the distribution of the products with reference to fresh food, soft-lines, and ancillary as well as hard-line products. Costco implements various elements of marketing model with the aim of addressing the needs and preferences of
Costco's business model is to undertake a cost leadership strategy. The company operates with a warehouse store concept. The warehouse store concept focuses on offering large volumes of goods at low prices. A typical Costco warehouse has a relatively low number of SKUs available, and any given product is usually only available in a single SKU. Consumers are attracted to the low prices associated with volume buying. Each store has
Buyer power is high. Consumers are well informed and have a number of discount and warehouse options from which to choose. As such, there is a high risk of substitution or switching, lending the buyer high power on aggregate. There are high barriers to entry. Tremendous economies of scale are required in order to adequately compete in the low cost sector. Infrastructure buildout costs are high for any firm
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now