This paper examines three operational management dimensions at Walmart: the role of product design in corporate decision-making, the company's approach to product life cycle management, and key issues in product development. Drawing on industry sources, the paper traces how Walmart's market dominance shifted power from manufacturers to retailers, influencing product design and production standards. It also discusses Walmart's sustainable product index initiative, its global supplier survey on environmental and social practices, and the company's partnership with WWF's Global Forest and Trade Network as an example of sustainability-driven product development.
As in many corporations, product design plays an integral part in the decision-making process. Mitchell (2005) confirms that the staying power of Walmart is evident through its product design choices and decision-making process. Historically, big manufacturers with powerful brands controlled the marketplace, and retailers simply played along. About the only decision retailers had to make was whether to stock a manufacturer's product — if consumers wanted it, stores carried it.
This dynamic led to the rise of Walmart and other big-box retailers, which turned the traditional power relationship on its head. Suddenly, manufacturers had to play by the retailers' rules. As consumers were increasingly drawn by low prices rather than manufacturers' brand names, these retailers built enough market share to start making demands of their suppliers — about prices, marketing, and even product design and production methods.
Manufacturers responded in various ways and with different degrees of success. Some simply played along by cutting costs to shore up margins in the face of ever-lower retail prices. Others sought to avoid the big-box retailers altogether by focusing more on selling to businesses other than retailers (Mitchell, 2005).
Sissell (2009) explains that the way Walmart tends to address the question of the product life cycle is rather direct. Walmart announced it would develop a worldwide sustainable product index as a "single source of data" for evaluating the sustainability of products. Customers increasingly want information "about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well, and that it was produced in a responsible way," said Walmart president and CEO Mike Duke. "We do not see this as a trend that will fade."
As part of this effort, the company said it would help create a consortium to develop a global database of information on the lifecycle of products — from raw materials to disposal (Sissell, 2009). The initiative focuses on four key areas: energy and climate; material efficiency; natural resources; and people and community.
The supplier survey underlying this index gathers information such as facility locations, water use, and solid waste disposal. It also asks whether suppliers have set targets for reducing waste and water use, and whether they have publicly available sustainability purchasing guidelines that address environmental compliance, employment practices, and product or ingredient safety.
"WWF partnership and responsible forest management efforts"
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