globalization and the influences of very large companies
|this is a screen capture from the section on the PBS site where you can see clips from the Walmart video|
notes from what Prof. Hezai provided C46 students , who viewed this video, in 2008
1 question from this video
will appear on the final
Wal-Mart - biggest retailer in the U.S. and number one customer in China; annual revenue - 256 billion US dollars (quarter of Canadian GDP); “team Wal-Mart”
WM utilized rise of information technology and globalization to their advantage; WM is perhaps the most powerful retailer in global economy
WM as epitome of one-stop shopping: wide selection of virtually all possible consumer goods at one store attracts shoppers
WM extensively uses barcode info: utilize device that keeps track of qty sold, qty left, hourly/daily/weekly/monthly trends and projections
World leader in logistics – some quote WM’s efforts increased overall US efficiency
Pioneered shift from push production to pull production. Push production: manufacturer decides what and how to produce, then pushes the product to a retailer. Pull production: retailer decides what is being sold and sells manufacturer what and how to produce and at what cost; manufacturer has little control over production since WM dictates demands.
WM possesses extensive info on all of its suppliers (their operations, costs, etc.) and establishes the price at which it will buy goods (“WM way or no way”). Suppliers want to establish tight relationships with big-box retailers like Wal-Mart which comes at a price to them. WM pressures its suppliers to keeps costs low; wouldn’t accept price increase from Rubbermaid whose raw material costs rose sharply. WM dropped a number of Rubbermaid products driving them out of business. Rubbermaid sold to Newell and thousands of jobs were cut.
WM business practices: daily morning “pep rally” meetings.
Emphasis on the opening price point: each isle has a display of a very low-priced item – serves as bait to lure customers; items further in the aisle are higher-priced and aren’t necessarily competitive on the market
Global cost cutting and efficiency; aggressive growth (WM resisted turning into “rich, fat and dumb” enterprise)
60-80% margin on Chinese-made goods compared with 18-22% margin on American-made items
WM has the power to push its suppliers into low-cost geographical regions
WM creates culture of waste, i.e. everything in abundance, when something breaks down people simply buy more
WM causes pollution (heavy-traffic sea transport, shipments from China )
|Others||While Wal-Mart seems to bear the brunt of much media focus on big retailers (just like McDonald's is the focus of fast food companies) there are a number of other significant global retailers that also have business circumstances which have a global effect, just like Wal-Mart|
Australia – Woolworths Ltd.
Convenience/Forecourt Store, Discount Department Store, Electronics Specialty, Other Specialty, Supermarket
Brazil – Comanhia Brasileira
de Distribuicao SA Grupo Pao De Acucar
Convenience/Forecourt Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Supermarket
Canada – Loblaw Companies, Ltd.
China – Bailian Group
France - Carrefour
Germany - Metro AG
Hong Kong – AS Watson & Company Ltd. SAR
Mexico – Organizacion Soriana S.A. de C.V.
South Korea -- Lotte Shopping Co., Ltd.
Sweden – The IKEA Group
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