With around 5000 retail outlets worldwide, operating in more then a dozen countries and with over US$286 billion in annual sales, Wal-Mart is the top retail chain and number one fortune 500 company in the world. Wal-Mart is the top employer in the U.S. with 1.3 million employees, “the company accounts for 9 cents of every US retail dollar and sells around 20 per cent of the nation’s groceries and pharmaceuticals.” (Times News Network).
Wal-Mart’s sheer size gives it unrestrained economic power which allows it to drive down costs in the retail and manufacturing sectors and to enact its own standards with regards to its work force.
Facts about Wal-Mart and China
Wal-Mart has a clearly defined anti-union policy aimed at preventing its work force from gaining any collective bargaining power which could result in increased wages, covered health benefits and job security. Many reports have been written documenting the economic and eventual social and environmental degradation which occurs when Wal-Mart “comes to town”.
“Over the course of [a few years after Wal-Mart entered a community], retailers' sales of men’s' and boys' apparel dropped 44% on average, hardware sales fell by 31%, and lawn and garden sales fell by 26%. In towns without Wal-Marts that are close to towns with Wal-Marts, sales in general merchandise declined immediately after Wal-Mart stores opened. After ten years, sales declined by a cumulative 34%.”
[Kenneth Stone at Iowa State University, “Impact of the Wal-Mart Phenomenon on Rural Communities”].
Wal-Mart and India
• Wal-Mart is seeking to open its own retail chain throughout India.
• India's $250 billion retail business is the eighth largest in the world and has the potential to grow 7 per cent by 2011. [McKinsey Report] For a company already dominating the world markets, this is an un-passable opportunity.
• The owners of Wal-Mart stand to gain enormous profits from this move while India’s economy will suffer and its workers will be subjugated to the unfair work practices of this Multinational Behemoth
* Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
* Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA).
* The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement.
* A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people, and retaining a developing them.
* Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.
* Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors.
* The company is global, but has a presence in relatively few countries Worldwide.
* To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region.
* The stores are currently only trade in a relatively small number of countries....