| WAL-MART is all about the low prices |
I - Wal-Mart's Revolutionary Power:
I learned that it is truly a revolution to have the retailer, Wal-Mart, as the company wielding the power when negotiating with manufacturer's. This practice isn't always so. The manufacturer usually is the one with the power when discussing pricing. But, Wal-Mart is all about low prices to the consumer and they do not budge in that aspect. Wal-Mart believes in low prices, high volume of sale, with fast low-profit turnarounds.
II - Muscling Manufacturer's:
Wal-Mart would not sell Rubbermaid products at a higher price to the consumer just because Rubbermaid's cost of production went up. Wal-Mart remained firm and decreased the amount of shelf space dedicated to Rubbermaid in their stores. Rubbermaid's business suffered greatly and Rubbermaid's employees were cut down.
III - The Strategy: Low Costs & Go Global
Walmart's strategy for low costs force them to go global where the products can be manufactured cheaper which will in turn create a higher profit margin and lower consumer prices. China was the place to do that.
IV - China's View of Wal-Mart--Big Partner:
Wal-Mart once again dictates their standards to the Chinese manufacturer. And in a classic Wal-Mart style, Wal-Mart creates a bidding situation where the Chinese manufacturer who can create the specific product the cheapest wins the bid. In addition, Wal-Mart wields their power because of their business volumes.
V - Taking the Hits:
American companies such as Thomson closed down because it could not compete with Chinese lower prices. In effect, Walmart used Chinese manufacturers to produce t.v.'s and such because the Chinese offered a cheaper cost. That is the downside to Wal-Mart... American jobs are lost.
CONCLUSION- Is Wal-Mart good for America?.... it is to the consumers, but not to the American workers.
created on 11/16/11
Wal-Mart would not sell Rubbermaid products at a higher price to the consumer just because Rubbermaid's cost of production went up. Wal-Mart remained firm and decreased the amount of shelf space dedicated to Rubbermaid in their stores. Rubbermaid's business suffered greatly and Rubbermaid's employees were cut down.
III - The Strategy: Low Costs & Go Global
Walmart's strategy for low costs force them to go global where the products can be manufactured cheaper which will in turn create a higher profit margin and lower consumer prices. China was the place to do that.
IV - China's View of Wal-Mart--Big Partner:
Wal-Mart once again dictates their standards to the Chinese manufacturer. And in a classic Wal-Mart style, Wal-Mart creates a bidding situation where the Chinese manufacturer who can create the specific product the cheapest wins the bid. In addition, Wal-Mart wields their power because of their business volumes.
V - Taking the Hits:
American companies such as Thomson closed down because it could not compete with Chinese lower prices. In effect, Walmart used Chinese manufacturers to produce t.v.'s and such because the Chinese offered a cheaper cost. That is the downside to Wal-Mart... American jobs are lost.
CONCLUSION- Is Wal-Mart good for America?.... it is to the consumers, but not to the American workers.
created on 11/16/11
