Neulijan (Julian) Kore
MAN 4720
Prof. Ping Zhang

Is the corporate social responsibility conflicting with Wal-Mart’s cost leadership strategy? Is Wal-Mart good for America?

Before analyzing Wal-Mart’s corporate strategy, it is important to identify what business it is in. For example, Wal-Mart is in the business of selling consumer goods such as TV’s, sheets, clothes, then it is pursuing a concentric strategy by entering in the food business. However, this changes depending on how you analyze what business Wal-Mart is in. Wal-Mart is in the business of selling everything customers need in their everyday lives. This includes the consumer goods listed above as well as food-service items. Wal-Mart definitely has the business strategy of Low Cost Leadership. They do nothing to really differentiate themselves from competitors and provide no-frills self-service stores that always provide the lowest prices. Wal-Mart has built enough purchasing power with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer. Everything that Wal-Mart does from calling suppliers collect to having execs double up in hotel rooms, is to save the customer money. While they do try to provide good customer service on top of low prices, Wal-Mart’s strength is low-prices. No one has such a supplier and distribution network like Wal-Mart that allows such low prices.
But in the past several years, Wal-Mart also has been going through a major transformation and committing itself to progressive policies in the realm of corporate social responsibility, particularly when it comes to the products it sells and major efforts to promote energy conservation. Beginning in 2005, Walmart started actively addressing its global impact, adopting sustainability program in which it revamped everything from building materials to light bulbs. To become more eco-friendly, Walmart designed new stores to be more energy efficient and produce fewer greenhouse gases. Additionally, the company added solar panels to many of its stores, installed fuel-saving technologies in its fleet of vehicles, improved its routing system to cut down on fuel consumption and purchased millions of kilowatt-hours of wind energy.
It’s been called the 800 pound gorilla that you don’t want to mess with. It’s been accused of taking customers from small, neighborhood stores and hurting communities. It’s been accused of predatory pricing, anti-union fervor and paying its employees less than a living wage. It’s been called the United States of Wal-Mart because of its massive control of the American retail scene. The latest initiative that Wal-Mart announced last week, is a five year plan to reduce unhealthy levels of salts, fats and sugars in thousands of its packaged foods and to lower prices on healthier products such as fruits and vegetables.Wal-Mart is pledging to reduce salts by 25-percent, to eliminate industrially added trans fats and to decrease added sugars by 10-percent. The company also is planning to develop a seal that will be placed on healthier foods, rating those products by their levels of sodium, fat and sugar content. The massive company, with 8,500 stores in fifteen countries, is the world’s largest corporation by revenue with over $400 billion in sales for 2010. Wal-Mart is planning to use its enormous purchasing power to force food suppliers such as Kraft, whose total Wal-Mart sales amount to roughly 16 % of its business, to make its foods healthier as well ( Global Responsibility Report 2013).
In summary, Wal-Mart is cognizant that consumers are demanding healthier foods, cheaper prescriptions and are more concerned about global warming and greenhouse gases. The company also realizes there are profits to be wrung out of reducing the energy consumption at its stores, using less fuel in the transport of its products, producing goods in a more efficient manner and creating less waste. In future years, Wal-Mart continues to undertake positive initiatives for the American consumer and the environment and also makes greater strides in compensating its workers and becoming a better neighbor in the communities where it operates.

Resources http://corporate.walmart.com/microsites/global-responsibility-report-2013/ http://www.csrwire.com/members/12774-Wal-Mart-Stores-Inc-
http://thewordenreport.blogspot.com/2013/03/corporate-social-responsibility-at.html