Case 6-9

Stephen MacNeil Cody Chaplain Jim Zolty Melissa Jenkins

Eyosias Solomon Brandon Withers

Wal-Mart

Outline

• Key Problems• Company’s Situation• Recommendations

Key Problems

• Selective Cultural Gatekeeping• Employment Issues• Government Issues• Supply Chain Tyranny

Selective Cultural Gatekeeping

• Censored CD’s• Censored/Removed Magazines

– “fine line between pornographic and provocative”

• Preven Pill– “moral dilemma”

Employment Issues

• Underpaid Employees– 2003 average associate made $13,861 a

year, almost $800 below the federal poverty line for a family of three.

• Lawsuits & Sexual Discrimination– Largest civil rights class action ever

• Turnover rate

Government Issues

• U.S. Economy’s dependence on Wal-Mart

• Lobbyists in Washington• Overturning local ordinances by

petition• Government can not control Wal-

Mart

Supply Chain Tyranny

• Wal-Mart dictates:– Delivery schedules– Inventory levels– Specifications of products– Product selection– Merchant selection

• Bought 10% of all US imports from China in 2003

Company’s Situation

• World’s largest retailer– $245 billion in sales in 2002– Partly responsible for low inflation rate in

recent years

• Saved customers $20 billion in 2002, by offering lowest prices

• Low price, family-oriented, patriotic culture

• Sends conflicting messages

Company Situation

• Low Prices– 14% lower average grocery prices– 82% of all American households made at least

one Wal-Mart Purchase in 2002

• Everything under one roof; “SuperCenter”• Hollywood’s biggest outlet of CDs and

DVDs• Controls large share of business done by

most every major US consumer products company

Recommendations for Cultural Gatekeeping

• Use marketing research to understand what customers truly want– More emphasis on focus groups– Survey customers in and out of store– Check sales receipts to compare what

customers are buying

More Recommendations

• Pay more competitive wages and provide incentives to workers

• Reduce cost by reducing store hours• Settle lawsuits quietly• Improve public relations• Do not open stores in small townsProvide more leniency to suppliers

The Mixed Image

• Wal-Mart is the best and worst thing that has happened to the United States

• Best thing because:• Low prices have reduced the inflation rate

• Worst thing because:• If Wal-Mart collapsed, there could be a national

security issue

• So many people are against Wal-Mart, but they can not live without it.

Fix the Mixed Image!