Hank [BS/MSEE,
MSM $$$, Ph.D. Mgmt] teaches 
Wikipedia states: Wal-Mart: The High Cost of Low Price is a 2005 documentary film by director Robert Greenwald. The film presents an unfavorable picture of Wal-Mart’s business practices through interviews with former employees, small business owners, and footage of Wal-Mart executives. The film intersperses statistics between the interviews to provide large-scale examinations beyond personal opinions. The documentary was released on DVD on November 4, 2005.
In today’s ENTR200 classes about Business Models, I used Wal-Mart’s drive to be low-cost provider as an example of what may be involved in driving costs down as part of a firm’s business model. Some of what I presented came from watching the above movie a couple of months ago. The full one hour 38 minute video may be viewed at the following link and you can draw your own conclusions: http://video.google.com/videoplay?docid=-3836296181471292925
A very cursory search on Google using “Wal-Mart unfair labor practices” turned up too many hits to count. Some on the first page are provided below from which you can ascertain the guts of Wal-Mart’s low price business model for yourself. Hank
Wal-Mart Reacts to Unfair Labor Practices Allegations
http://newstandardnews.net/content/?action=show_item&itemid=489
Current Legal Developments
Concerning Wal-Mart
http://www.wal-martlitigation.com/currentd.htm
Wal-Mart: The Facts from NOW
http://www.now.org/issues/wfw/wm-facts.html
According to NOW in the above link, Wal-Mart female employees are being paid an average of $6.10/hour.
See link here for comparative wages in the US:
NY Times on Wal-Mart
Wal-Mart: The High Costs of Low Prices
When you’re on top too long, you become a Target…no pun intended :o)
The more I hear about Wal-mart, the more I don’t like them as a company. Their prices are the lowest, and because of that I still continue to get bulk goods from there because of my low college budget. However, some of their cost cutting measures are pretty worrying, and once I am able to afford more, I will take my dollar elsewhere. I’ve noticed a decline in store quality over the years, and now with the information of how they treat their employees, it is no wonder they could care less about the place. The biggest thing that seems to have happened lately is the company no longer requiring uniforms to be worn. I go in, and I can never find employees if I have a question, because most of them hide their nametags under their shirts or in their pockets off their belts. At the rates their being paid, I wouldn’t want to have to deal with people either.
Some of the information from class today was kind of amazing. Them telling their employees to get federal money, and almost passing off the fact that corporate is doing them a favor by paying them so little they qualify for it, is scary. It makes me wonder who is paying the costs in the end. Is the lower prices worth it? Is the almighty dollar worth more than the people who help bring it in? In wal-marts case, it sure seems so.
Google’s motto: “Don’t be evil.” Wal-mart is treading that gray line.
Okay… So I`m college student with little money who shops at Wall-mart. Holly Crappy have they got an unbelievable business model. They pay their employees minimum wage, find ways to acquire free tax money and avoid getting arrested. These guys are geniouses. Serisously, they are incredibly smart. This kind of maniupulation takes lots of planning and thought. Okay, so maybe the business model isn’t the most ethical, but it is still a successful model.
In response to the article about women and the glass ceiling: Obviosuly there is no question women should be promoted as frequently as earned. But did anyone else notice that if they are not the executives are going to take 7.5 percent cut in bonuses. Again this is brilliant. First of all the executives probably have very little to do with whether or not
“jane smith” gets promoted from cashier to head cashier. And if for some reason she isn’t promoted Lee Scott Jr. is going to get even more money in his pocket because he is going to take other executives bonus money. Amazing!
Also I was impressed by Wallmart’s statistic on the average workers salary at 9.65 per hour. This just gows to show you how statistics can be maniuplated. Of course the average is so how when outliers like CEO Scott Jr makes 11.6 million. Wallmart is really sticking to their so far succesful and immoral businee plane.
They are a business and a business’s job is to make money not friends, simple as that. They are good at what they do and thats why their on top. I am not saying what they do is right, but their not going for a humanity award. If i was in their position i would take any advantage i can to get ahead in my field. By the way Hank i thought that the info in class was very informative. I was very fascinated by the facts you had to share.
Agree with Nate…. say what you want about the company but the bottom line is they have a very successful business model. Yes, people complain about how much they are getting paid, and how they get their prices so cheap, but they are obviously providing A LOT of jobs and people are continuing to shop their. Many people complain about Wal-Marts ethics and say they are concerned, but continue to shop there. I’m not going to sit here and bullshit about Wal-Mart should pay their employees more and that they should donate more to charity, because I, like most other consumers, prefer lower prices and convenience to better customer service and higher prices.
If you don’t like you’re pay/benefits (or lack of), try to get another job. If you don’t like wal-marts ethics/customer service, shop somewhere else.
No mater how big you are, hatred hurts. The general hatred from the public is a huge disadvantage (the opposite of Brand loyalty). For example, when new businesses like costco come and have cheaper prices then Walmart (Costco is like Walmart, just you buy everything in bulk so it is cheaper) people would switch. People are just looking for an opportunity to shop somewhere else. When I went shopping for a refrigerator, I found a Walmart and a Target next to each other. I went to the target because of a hatred of Walmart, even though it might cost 2-3 dollars more. For striking against Walmart, 2-3 dollars is worth it.
Now, as a Republican, I almost always support the large corporations against unions and other activists in the idea that they are beneficial to the country. However, The idea that walmart is costing the Nation money directly, that is unbelievable. In my mind, it is unpatriotic to shop at a Walmart. Supporting a store that drains American tax dollars is shameful.
Hank, you asked if Walmart is a good business model and the answer is yes, they make money. However, Walmart’s downfall might just be because of a public relations fiasco.
I agree that Wal-Mart does do some questionable things to be low cost, but it has a lot of good services it offers such as being open 24/7, and having almost anything you could need all in one location as well. I know that when I want something and it’s in the late evening or night that I can pretty much go to Wal-Mart to find about anything that I need. It’s true that in small towns they would be bad for their economy because they will run little stores out of business, but in bigger cities that are highly populated, I doubt that many places are going to be run out of business because people know that products and services from Wal-Mart are not the highest quality and if someone wants a high quality good or service, they will go elsewhere to get it. One that thing it could be said is being done is that it could even push the local stores to have higher quality goods or services so that they can use the differentiation strategy to set themselves apart from Wal-Mart.
A part of the business model involves keeping customers satisfied. If customers were really willing to take their business elsewhere, Wal-Mart would have had a really crappy business model. I guess they’re lucky most customers, even though they dislike Wal-Mart, still shop there. Maybe they should burn down Wal-Mart like in that South Park episode, althought as that episode masterfully explained the hart of Wal-Mart are the people, who just can’t stop shopping there.
So my conclusion: their business model only works because the general public can’t stop shopping there, if humans were less cost-concerned and more ethical, Wal-Mart would have gone down a long time ago. I guess it’s a good thing for them that the human race is so flawed.
And you know, even I go there to shop, I wouldn’t BUT a) it’s easy to get to and b) it’s so godd*mn cheap :p
cute pun Nwokedi.
I agree with what everyone is stating, Walmart is just so far ahead of the competition they can practically due whatever they want. The article below discusses Walmarts new customer service plan. This plan includes not having a Toll Free help number on their company website. The article states that this move is due to the numerous amounts of calls concerning tracking numbers, but shouldn’t the customer have that right? This shows they are so universal they can do whatever they want…for now. http://bits.blogs.nytimes.com/2007/09/24/walmartcom-to-customers-stop-calling/
Also, did you hear about Best Buy were advertising fake sales on a company website and then having different prices at the store, well someone caught on and they are being sued. This is another example of companies thinking they are bigger than laws and ethics. Read more here —>http://consumerist.com/consumer/update/best-buy-adds-disclaimer-to-secret-website-303124.php
I can’t remember the last time I shopped at Walmart and I don’t plan on shopping there anytime soon. I haven’t done my own research on Walmart but I know my Dad has. He hasn’t liked the corporate giant ever since Sam Walton’s heirs took over. He always thought highly of Sam, how he bought American products to sell and that he was a down to earth kind of guy driving the same pickup truck for years. He says Sam would most likely roll over in his grave if he knew the direction that his company has headed (buying cheaper made products internationally and how they treat their employees, etc.) The books out on Walmart have been on my list to read for a while, hopefully I can get around to them soon.
Beyond it’s convenience factor, I’m not a Wal-Mart person. In all honesty, it’s appearance is not that of a very warm shopping environment, even when compared to a place like Target. This may be the design side of me talking, but it has always lacked the asthetics in my opinion and so i’m not very surprised at the scheming going on at Wal-Mart.
I would have to say that Wal-Mart’s only saving grace is it’s willingness to hire employees with disabilities… they may not make much, but at least they are making something and they are given a solid, constructive outlet. Maybe Wal-Mart has it’s “ethical head” on backwards, but at least it isn’t crooked too.
I don’t consider myself a “Walmart Person” either, yet I find myself shopping there at least twice a month for the basics. I would rather pay less for same product than more, so I go there for the low prices, hating every minute of the experience!
I think Walmart gets a lot of criticism because of its success. I don’t know if I agree with all of it. After all, it is a product of the American Dream. Sam Walton was just a little guy in a small Arkansas town who had a simple, yet smart, business idea and made it work.
Walmart has made it difficult for Mom and Pops to survive in small town America, yet they’ve employed a great many people in those small towns. They’ve offered us more selection at a better price than the Mom and Pops were able to provide. They do employ the previously unemployable ( I know some personally) and offer flexible hours to students and mom’s needing part-time work.
This is the era of the Super Store. What long term effects will Walmart, and all the other super stores and Category Killers like Office Max and Pets-Mart have on our economy? What will Macy’s do to the soft goods business since it has taken over nearly all of our brand-name department stores? What is the future of Brick and Mortar Retail with the ever convenient Internet Shopping option? Change; We’re America; We adapt.
Walmart is always being criticized for being the least likely to do something good for their employees yet you still see a ton of people working there. Apparently that many people don’t mind because they still work there and even so a ton of people shop there. I’m not exactly a wal-mart person but I know when I need the little necessitites I will go there because of the cheaper prices. I still may not agree with their ethics but what is America really all about, the almighty buck.
Wal-mart is a great example of domestic regression. When walmart came into my town in wiped out nearly half the locally own stores that i enjoyed going to. Now you have to go into wal-suck to get what you need, and as long as its something popular in the parts, tire, and hardware department it will be there, other wise your stuck going to the internet.
I watched this video yesterday and had to calm myself down to write a comment. Are you serious???…Is business that serious that you have to kill communities??..I agree business is not about making friends but what ever happened to common courtesy??…Does America no longer have a soul? In my life I have been very close to never making ends and going through money problems. As I watched the video I felt the pain of the people who didn’t have enough money to cover healthcare and were forced to get WIC and public assistance. My parents have worked for companies that only pay you enough so that you have to come back to them.You wonder why there is a ton of people working at wal-mart? What other choice do they have when all the other businesses in their community are closing down…..The way I see it Wal-mart is a legalized sweat shop….Tyler..I agree with you…We are for the most part all in the same boat…working with little finance and have no other choice…So as we try not to take part in it..for survival we have to…..Wal-mart effects the emoplyees, consumers, and tax payers….It efects ENTR students too..Wanna start a business..maybe in retail….grocery??…Auto repair…Sporting goods…electronics…..toys….clothing….jewelry??…..With walmart in town….Who would want to try??
I would have to agree with Nate on this one, they arent out to make friends with everyone. They are a business and the objective is to earn money is it not? If a business isnt earning mney then under it goes! Well they maybe dont treat people as good as what they should but I’m going to admit the cheaper prices will keep bring you back no matter what!
pro-target!
Today’s lesson is on…ethical and legal ways of doing a business!! Not the Walmart way if doing business!
I love going to Walmart and to tell you the truth I think I will always shop there because I am cheap, but they really aren’t the best business to be supporting. What I dont understand is why anyone would would at Walmart with the way they treat their employees. I know that the employees that work there usually dont have college degrees or high school ones for that matter but there are other businesses willing to hire them. If they are being treated so unfairly then they can quit and work somewhere they are more appreciated.
As for the Walmart company itself, I think its a really shady business. They have so much money it makes me sick to know that they are still milking their employees for all their worth. They have made them billionaires and no one needs that much money. The people who need the money the most are the people that work for them. That made me mad in class when you said that the way they do health care is by making sure they get paid under the limit to get Medicaid. Thats just horrible. Oh, and how you said Walmart has a charity foundation but the only people donating is their employees. They are the ones that should be receiving this charity money. Well, Im still going to shop at Walmart but Im definitely not going to work there. And Ill be sure to be nice to all their employees.
When you talked about Walmart in class I was astounded by the amount of unfavorable information there was. I always thought of walmart as a decent business. I was sorely mistaken after reviewing all the information you had presented.
The sad thing is you can’t beat their business model when it comes to pricing. Money is everything and when you short on it Walmart is the solution. If I wasn’t that poor college student I would indeed take my business elsewhere. Till then I’m going to be feeing the money hungry giant.