Built on the formula “buy cheap, sell for less than the other guy, and make a profit on high volume and fast turnover,” Wal-Mart today is the world’s largest retailer – and one of the most controversial. Founded in 1962 by Sam Walton, the company’s key focus is selling goods at the lowest price possible, with the slogan “Save Money. Live Better.” Saving money to help people live better is the goal Sam Walton envisioned when he created the first Wal-Mart (Wal-Mart Corporate). For Americans with tight budgets, Wal-Mart has become a staple place to shop – a place for people to enjoy the products they need and love, at a price they can afford.
The Wal-Mart effect, in essence, is when a big box retailer comes into town, reshapes the shopping habits of consumers, drives prices down, and ultimately creates a “race to the bottom” among businesses (Fishman, 2006). Today, Wal-Mart’s ubiquitous presence has subjected the retailer to considerable attention over its effect on local economic activity. From an economic perspective, Wal-Mart is criticized for “infiltrating small-town America” while offering an extremely large variety of consumer goods at very low prices (McCune, 1994). Many critics argue that this strategy undermines the ability of small, locally owned businesses to compete, forcing many to close. Additionally, Wal-Mart has an extensive history of using public money to aid in financing its rapid expansion across the United States.
Up until now, the local and state governments have done little to address the phenomenon known as the “Wal-Mart effect.” I believe state and local governments need to play a much bigger role in protecting their community’s future.
Almost everyone has heard of the membership warehouse retailer, Costco Wholesale, whether or not you actually choose to shop there. You can find one of their warehouses in over 400 locations around the United States, as well as an additional 200 warehouses in Canada, Mexico, Australia, the United Kingdom, and parts of Asia. Although they are not quite as instantly recognizable as their main competitor, Sam’s Club of Wal-Mart Inc., Costco has attracted somewhat of a cult following due to their unusual business operations. In many financial comparisons, Costco seems to beat out all of their industry competitors. Even in the recent economic downtown, Costco still posted growth in their stock, as well as higher than industry average profits. So what exactly makes Costco so successful? Many business analysts argue that Costco’s focus on corporate social responsibility is what sets them apart from other retailers such as Sam’s Club or BJ’s Warehouse. Their focus on doing “the right thing” for all of their stakeholders, as well as a vision that aims for long-term success, is a unique business model that has interesting implications for many debates within the business world today. Should a company’s main focus be profit? Do they have a responsibility to act in the best interest of all stakeholders? What are the effects of these decisions? Using Costco as a prime example of a socially responsible corporation, I hope to prove that acting in a socially responsible manner towards all stakeholders is ultimately more beneficial for a company. Continue reading
The blog council met late Friday afternoon to discuss the blog awards for this week’s prompt on cited reference searches. Although the blogs this week were not the most exciting to write, some did spark debate such as Alyssa’s stem cell post and Ben’s NBA post.
With prompt in mind, the blog council came up with six awards.
1. Best Use of Sources
2. Best Use of Class Topics
3. Best Use of Media
4. Most tenacious
5. The Luckiest SOB (Most Cited References)
6. Best Post
You each found relevant articles and were the most effective at connecting the topics in the articles to topics in your paper.
The winner of Best Use of Class Topics is Jenna.
You looked back through a previous class case, Walmart, and used the case’s references as a starting point to search for more material.
The winner of Best Use of Media is Joey.
We felt you had the most relevant and entertaining media (in your case graph and cartoon)
The winner of Most Tenacious is Lauren M.
We felt you deserved an award for the amount of effort you put into translations.
The winner of The Luckiest SOB (Most Cited References) is Derek.
You found over 10,000 articles…which can be attributed to effective researching and some luck. Anyhow, we felt you too deserved an award.
The winner of BEST Post is Danielle.
Congratulations Danielle! We felt your blog on Stakeholder Pressure was well researched, well written and deserved the title of best post.
One of the topics in this class that I’m particularly interested in is the whole debate about whether or not Wal-Mart is helping or hurting our economy. “The Wal-Mart effect” has come up in a couple of my classes, and while I’ve read some material about the debate, I thought it would be interesting to dig deeper into the subject to see if I could find out more information.
First, I looked at the works cited page from the Wal-Mart case study we read (the one titled “Wal-Mart’s Business Environment”). Two authors, Nancy Cleeland and Abigail Goldman, were referenced several times in the works cited page. Before I performed the cited reference search, I figured it would be useful to Google these two authors to get some background information on them. When I typed in their names, I noticed that Cleeland and Goldman, along with a few other staff members at the LA Times, were awarded a Pulitzer Prize in 2004 for the staff’s “engrossing examination of the tactics that have made Wal-Mart the largest company in the world with cascading effects across American towns and developing countries.”
After finding out that these two authors had written so much on Wal-Mart, I immediately I knew I was on the right track, and figured I would be able to find a bunch of quality articles dealing with this topic. One in particular, titled “An Empire Build on Bargains Remakes the Working World” looked like it might be helpful to me. Written by Cleeland and Goldman, the article focuses on the impact of Wal-Mart, on a personal level and on a broader level. For some people, like 26-year-old Chastity Ferguson, Wal-Mart is her favorite store because the prices can’t be beat anywhere else. For Ferguson, it’s a no brainer to shop at Wal-Mart since she only makes $400 a week and wants to save as much money as possible wherever she can. However, for others like Kelly Gray, who have lost their job because Wal-Mart has taken business away from the local stores, it is hard not to resent the store.
In a broader sense, Cleeland and Goldman discuss how Wal-Mart both gives and takes away. Although the company has grown tremendously and created jobs all over the world, it has come at a heavy price. By relentlessly cutting prices, Wal-Mart has helped hold down the inflation rate for the country, according to U.S. economists. Consumers are undoubtedly reaping the benefits, but what about the employees and local business owners trying to compete with this competitive business model?
This article is only one of the many written about this particular topic. Using the cited reference search allowed me to find trusted, quality sources that could help me dig deeper into this subject, and I look forward to reading stories from both ends of the spectrum.