Ethics and Social Responsibilities

Wal-Mart aims to be a leader in their industry on all fronts, even on the side of social and ethical responsibility. When Sam Walton founded Wal-Mart in 1962, he instilled values that are still carried through into today’s line of business, his three basic beliefs were, “respect for the individual,” “service for the customer,” and “strive for excellence.” Going along with that thought, Wal-Mart created the Global Ethics office to promote their culture to all of their stakeholders around the world.

Wal-Mart also has in place an ethical standards program, this program is to ensure that all Wal-Mart factories, warehouses, distribution centers, and stores across the globe follow a set of rules for all workers to adhere to promote a better work place environment, and a better life for all. Not only do these rules have to be abided by Wal-Mart run locations, but also by all of the suppliers who sell items in Wal-Mart stores. Wal-Mart is committed to the ethical treatment of workers in al aspects of their business. Covalence is a company that researches and tracks the ethical reputation of international companies, when the last report came out, Wal-Mart was ranked third amongst thirty-five other international retailers as more socially responsible.

http://walmartstores.com/AboutUs/280.aspx

http://walmartstores.com/AboutUs/279.aspx

Logistics

An inside look of a Walmart distribution center

From there — to here

Logistics — it’s how we get our products from the manufacturer to our store shelves. It’s the heart of the Walmart operation. We move millions of products to customers each day of the year. And we’re using the latest environmentally-sustainable practices in the process.

Distribution Centers

We have one of the largest private distribution operations in the world. We have more than 40 Regional Distribution Centers. Each one is over 1 million square feet in size. They operate 24/7 to keep our fleet of tractors and trailers rolling. Inside each DC, more than five miles of conveyor belts move over 9,000 different lines of merchandise. Each DC supports between 75 and 100 stores within a 250-mile radius.

And more distribution centers

There are also distribution centers for specific product categories such as grocery, jewelry, pharmacy, apparel/shoes, and for Sam’s Club. The DotCom Distribution Centers, which support the Walmart.com online operation and the Site to Store program, is the fastest growing segment of our distribution network.

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-IT organization and the philosophical approach Wal-Mart uses

-IT organization and the philosophical approach Wal-Mart uses


They rely on IT enabled tight supply chain management systems to squeeze every penny possible out of the procurement, distribution, and warehousing of its products. They use business intelligence systems to predict what customers will want and when they will want it. Wal-Mart is currently using ERP, which incorporates, Customer Relationship Management system; they are also in the process of implementing SAP to strengthen their business skills. Philosophical Approach could be the Matrix, where there is collaboration across the board to ensure customers’ needs are satisfied. They have in-out flows, which is from computers to suppliers.

http://warlmart.blogspot.com/2009/02/which-of-3-generic-business-strategies.html

-The major business initiatives are used in Wal-Mart and what software is used.

-The major business initiatives are used in Wal-Mart and what software is used.

For Walmart, the major business initiative being used is Supply Chain Management. A supply chain management system is an IT system that supports activities by automating the tracking of inventory and information among business processes and across companies. Wal-Mart is to ensure that all their suppliers are using Electronic Product Codes and for those who do not have the capability they work with them to find packages that are within their price range. This allows for a successful ensuring that customers get what they order in a timely manner. It allows for logistics, fulfillment, production, revenue and profit, cost and price efficiency, Another initiative is the, Go Green Concept, according to Wal-Mart’s press release as
of February 2nd 2009, “two new types of heavy-duty commercial hybrid trucks and two different alternatively fueled heavy duty trucks”, has become, “part of the company’s efforts to build on its progress in developing a more sustainable trucking fleet”. As an Overall Cost Leadership company, their strategy is that of a bottom-line company. A bottom-line strategy optimizes manufacturing processes, decrease transportation costs, and reduces cost of human capital, and minimizes errors in a process.

How much power each of the 5 forces...

The five forces are buyer power, supplier power, threat of substitute products and services, threat of new entrants, and rivalry among existing competitors. Wal-mart follows the five forces business strategy.

Buyer Power is affected by how big your customers are and how much revenue they constitute as well as other things. For instance Wal-Mart has a lot of power with suppliers because it buys so much of their inventory and is thus a large percent of those companies revenues. It is no surprise then that these companies have lived and died with Wal-Mart's orders and would do anything to protect their business with them. Buyer power has about 55% of the five forces model that Wal-Mart uses, since the Company’s sole purpose is to ensure that its customers are, “Saving Money, Living Better”. Buyer power would also include their employees, in treating them with the respect, giving them support and having an open door policy, you create happy employees which transfers to happy customers.
Supplier power as there is a high amount of choices to be taken in and they do bring in a lot a supplies. As for a threat of a substitute product, it is high because there are alternative products for sale that can replace another item. As for a threat of a new entrant, Walmart seems to be the Leader in low cost sales so it will not be easy for a new business to come in and challenge Walmarts' ways. Supplier Power estimated percentage would be about 35, while, this percentage appears to be low, in the grand scheme of things is allows Wal-Mart to ensure that their suppliers come from a diverse group that achieves and maintains their high standards of delivering great quality services and products.
Threats of Substitute products and threats of new entrants average around 3%, simply because with Wal-Mart focusing on ensuring that their customers are happy and that their suppliers are delivering quality products at a low cost, they would ensure that they remain ahead of their competitors and in doing so, it would make it difficult for new entrants and the competition to match their prices.
In order to reduce buyer and supplier power, they would have to put a greater emphasis on the threat of substitute products. They would have to look at what are the better and cheaper alternatives on the market and tap into that resource.
Threats of new entry To create entry barriers, they would have to increase market research on what customers are actually purchasing and ensure that they are able to deliver, and become the only person offering that product at a price the customers and afford. Switching costs are easy, once customers realize they are no longer getting value for their money, they would go seek products elsewhere.
Rivalry is how competitive an industry is. For instance, if there are lots of companies selling essentially the same products there will always end up being a price war which will severely hurt the company' profits. Wal-mart has such low prices which has created a problem for years and fierce competition has made it tough for competitors to make a profit.

What kinds of e-commerce are used?

Wal*Mart uses the B2C e-commerce which is based on the business selling their products to the consumers who are the primarily individuals.

What types of internet business models are used?

Wal*Mart has been the leader and innovator in supply chain management, e-commerce and e- business. In their model, Wal*Mart’s low prices create a large demand that drives the suppliers. Since Wal*Mart’s inventory control system is so advanced they are able to send purchasing information to the suppliers to know which products are selling more, the suppliers in turn are able to know how much they will need on hand for just Wal*Mart alone and since each store is able to order their own merchandise the orders are sent out electronically for the amount needed the suppliers can have a very fast turnover time to send out the needed shipment to each store, and basically replenish their stock accurately by forecasting what they will need in each store, cutting the cost down as well as the time for both Wal*Mart and their suppliers.

What type of marketing mix does it adopt?

Wal-Mart’s marketing mix is very apparent in the way their design their websites, advertisements, as well as in store ads.

Registering with search engines:

Wal-Mart uses a variety of different key words and specific descriptions when they register with a search engines such as google, yahoo, and bing, which are considered the most popular. By registering with these search engines, they are giving themselves more exposure to clients by advertising their prices right up against their competitors, since other companies do the same thing, when a person is looking for a certain item and would type in a description of it along with the word “price” for example a list of companies who carry the item will appear in the search along with their online price. Wal-Mart, uses this in conjunction with their low prices to beat out their competitors.

Online Advertisements:

Wal-Mart does advertising online in addition to what they put on their website. Many Black-Friday based websites have a list of low priced products being sold in stores. Wal-Mart is usually advertising on all of these sites because of the deals that they have on that day as well as many banner advertisements and pop-ups on other sites especially during the holiday season to promote their products.

Affiliate Program:

Wal-Mart’s main website has a link to an affiliate program that they offer in which any person with a website who provides a link to Wal-Mart’s page can earn commission based upon the number of click through’s to their site as well as an additional commission on qualifying sales that Wal-Mart is promoting at that time. Wal-Mart designs all of the ads for the program all a person has to do is register with the company and post the given ads to their own website.

Wal-Mart Payment Systems

Wal-Mart uses a financial cybermediary as one of their payment methods. A financial cybermediary is an account which transfers money from one person to another or to a company over the internet, the best example of this would be a PayPal account.

Wal*Mart President and CEO Mike Duke