There is an increasing amount of research also showing how big box retailers including Wal-Mart when they enter local economies, are driving smaller retailers that provided a basis of price competition and employment are being driven out of business (Harris, 2006).
On top of their fear and anti-growth sentiment many communities have about big box retailers moving into their communities, many also fear Wal-Mart will move their manufacturing jobs overseas by shifting their product orders from local companies tot hose off-shore. Worst case, local communities see their manufacturing base going away and their entire communities becoming more reliant on Wal-Mart wages to the exclusion of higher value jobs.
Competitive & Internal Analysis
From a Wal-Mart specific standpoint, in addition to an internal analysis perspective, Wal-Mart executives need to make the issues of the company's lack of ability to globalize their operations, the continue costs of litigation, and the lack of accuracy of their pricing systems as all critical. All of these factors contribute to one of the key metrics the company also concentrates on, which is same-store visits by customers, a measure they consider critical of customer loyalty.
Beginning with the lack of execution of their globalization strategies beginning with the failure to successfully penetrate the German market (Dieckmann, 2007) followed by the tentative launch into China and the reliance on the incomplete infrastructure of their nation (Bowers, 2007) Wal-Mart has made strategic mistakes ranging from ethnocentrism dominating their decision making to attempting to capture a nascent market before it is ready. Wal-Mart executives need to make this a top priority internally for the company to continue growing.
In conjunction with this priority are the many lawsuits the company has both from hiring illegal immigrants to clean stores, a practice that the U.S. Department of Justice served an injunction on the company for. Far more serious are lawsuits contending that Wal-Mart has systematically practiced discrimination based on gender (Wedekind, Himmelstein, 2007) often relegating associate duties to women who had more qualifications to be supervisors and managers than men (Spangler, Britt, Parks, 2008).
In addition to these issues, there is the challenge of ensuring their rapidly changing pricing system is kept consistent with what their it systems and pricing optimization applications generate relative to the prices posted in the stores. There have been wide variations in these two pricing areas leading to a law suit in California (Palmeri, 2008) that requires Wal-Mart to pay $1.4M to settle complaints with customers in San Diego County. Again an execution issue, Wal-Mart's it systems move faster on pricing optimization many times than in-store personnel can reflect accurate pricing on the store floor.
Cherie Blanchard, Clare L. Comm, Dennis F.X. Mathaisel. (2008). Adding value to service providers: benchmarking Wal-Mart. Benchmarking, 15(2), 166-177. Retrieved November 27, 2008, from ABI/INFORM Global database. (Document ID: 1487917171).
Katherine Bowers (2007, February). Wal-Mart Acquisition Builds China Presence. WWD, 193(44), 4. Retrieved November 28, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1227384161).
Heike Dieckmann (2007, February). Final curtain call for Wal-Mart Germany. Office Products International,1. Retrieved November 28, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1227036281).
Mike Duff (2008, May). Thinking global. Competing local. Retailing Today, 47(6), 1, 20. Retrieved November 27, 2008, from ABI/INFORM Global database. (Document ID: 1505416871).
Thomas R. Harris (2006). The Econmic and Social Impact of Big Box Retailers: Discussion. American Journal of Agricultural Economics, 88(5), 1311. Retrieved November 27, 2008, from ABI/INFORM Global database. (Document ID: 1174862241).
Kenneth Hein, Steve Miller. (2008, October). Why Some Brands Cheer a Sour Economy. Brandweek, 49(36), 5. Retrieved November 28, 2008, from ABI/INFORM Global database. (Document ID: 1592142781).
Jeff D. Opdyke (2008). Ahead of the Tape. Wall Street Journal (Eastern Edition), p. C.1. Retrieved November 28, 2008, from ABI/INFORM Global database. (Document ID: 1594370091).
Christopher Palmeri (2008, November). Wal-Mart Settles Mispricing Suit. Business Week (Online) Retrieved November 27, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1602002141).
Melanie a Spangler, Margaret M. Britt, Tomas H. Parks. (2008). Wal-Mart and Women: Good Business Practice or Gamesmanship? Journal of Applied Management and Entrepreneurship, 13(2), 14-25. Retrieved November 29, 2008, from ABI/INFORM Global database.…