Wal-mart: a Critical Examination of Its Business Strategy and Impact on Society

Introduction

Wal-Mart, the world's largest retailer, has been a controversial player in the retail industry. While it has been lauded for its low prices and operational efficiency, it has also faced criticism for its labor practices, business tactics, and impact on small businesses and local communities. In this essay, we will examine the key aspects of Wal-Mart's business strategy, corporate social responsibility, economic and social impact, anti-competitive practices, and influence on society. Through a critical examination of these areas, we will evaluate the overall effectiveness and impact of Wal-Mart as a corporation.

Overview of Wal-Mart

Wal-Mart was founded in 1962 in Rogers, Arkansas, by Sam Walton. Since then, it has grown into a retail giant with over 11,000 stores worldwide, employing 2.2 million people. Wal-Mart's operations include retail stores, e-commerce, grocery stores, and membership clubs. The company is known for its everyday low prices and high operational efficiency, which has contributed to its success in the retail industry.

Business Strategy of Wal-Mart

Wal-Mart's business strategy is centered around a low-cost leadership approach. This strategy involves offering customers the lowest prices possible through cost-cutting measures such as efficient supply chain management, inventory control, and labor efficiency. Wal-Mart also focuses on its operational efficiency by using advanced technology and data analytics to improve its processes. This helps the company improve its supply chain operations, reduce waste, and increase profitability.

Corporate Social Responsibility of Wal-Mart

Corporate social responsibility (CSR) is an integral part of Wal-Mart's corporate strategy. The company has various initiatives and programs in place to improve its social and environmental impact. For example, it has committed to sourcing 100% of its energy from renewable sources, reducing greenhouse gas emissions, and increasing employee benefits and development opportunities.

Economic and Social Impact of Wal-Mart

Wal-Mart has been both praised and criticized for its economic and social impact. On the positive side, it has been credited with creating jobs, lowering prices, and stimulating economic growth. On the negative side, it has been criticized for driving small businesses out of business, contributing to income inequality, and underpaying and mistreating its employees.

Anti-competitive Practices and Criticisms of Wal-Mart

Wal-Mart has faced allegations of anti-competitive practices, particularly in the supply chain and manufacturing sector. The company has been accused of using its size and market power to pressure suppliers into lowering their prices and cutting corners on labor and environmental standards. Additionally, Wal-Mart has faced criticism for its labor practices, including low wages, limited benefits, and anti-union policies.

Wal-Mart and Society

Wal-Mart plays a significant role in society, not only as a retailer but also as an influencer of consumer behavior and retail trends. The company's low-price model has had a significant impact on consumer behavior, leading to a shift towards discount and online retail. Additionally, Wal-Mart's market dominance has led to other retailers emulating its approach to stay competitive, leading to a potential homogenization of the retail industry.

Conclusion

In conclusion, Wal-Mart is a complex corporation with a significant impact on society. While its business strategy and operational efficiency have contributed to its success in the retail industry, the company has faced criticism for its labor practices, anti-competitive behavior, and impact on small businesses and local communities. Despite its CSR initiatives and economic contributions, Wal-Mart's overall effectiveness and impact remain subject to debate. As society continues to evolve, it will be important to continue evaluating Wal-Mart's business practices and impact in this ongoing discourse.

References

1. Wal-Mart Corporate - About Us. (n.d.). Retrieved March 2, 2021, from https://corporate.walmart.com/about-us/
2. Choi, J., & Lee, J. C. (2019). Walmart's low-cost leadership and search for sustainable competitive advantage. Journal of Marketing Channels, 26(1), 17-29. doi: 10.1080/1046669X.2018.1522812
3. Wal-Mart Corporate - Environmental, Social & Governance. (2021, February 22). Retrieved March 2, 2021, from https://corporate.walmart.com/esg-report
4. Sampson, S. (2016). Has Walmart been good for America? A scholarly review. Journal of Business and Finance Librarianship, 21(1), 7-26. doi: 10.1080/08963568.2015.1089809
5. Pugliese, M. (2019). Global retailers and small suppliers: The value chain myth, the CSR trap and Walmart's sustainability index. Sustainability Accounting, Management and Policy Journal, 10(5), 738-755. doi: 10.1108/sampj-01-2019-0001