April 25, 2020
The book is an insight into how, Wal-Mart, a private employer company, overcomes the major problems facing retail businesses today. It follows the growth of the company from a group of small stores in Arkansas to a large international business. It has been faced by many problems but has overcome them to become a leading company with the largest staff. The company has been under tremendous pressure from trade unions, human rights lobby groups and other stakeholders on issues relating to the treatment of workers. Other shortcomings that the company has faced but successfully overcome include frustration of its efforts to come up with new smaller companies and stiff competition
In 1987, major suppliers such as Procter and Gamble, Kraft Foods and Nestle established themselves around Wal-Mart headquarters in Bentonville in the hope that they could increase their sales by supplying for Wal-Mart (Lichtenstein 2009, 2). Retail Revolution attempts to change the perception that retailing is a subordinate function as compared to industrial roles. This can be proven by the fact that by the 1990s the line between service and manufacturing functions was becoming thinner.
The retail business topped the list of leading business organizations and their success can be attributed to supply chains linking them with manufacturers thus increased sales revenues. With this huge revenue, such companies as Wal-Mart have become top private sector employers with close to two million workers most of whom are in the United States. It has topped the Fortune 500 list since 2002 (Lichtenstein 2009, 6). Wal-Mart has also been good in setting a new stage in corporate modernity. This is due to its huge sales that take a huge percentage of U.S gross domestic product and the big workforce it boasts of.
Wal-Mart has been so successful that during the 2008-2009 recessions when most stores closed, its sales were still satisfactory and its stocks traded just fine. When consumers were looking for bargains, Wal-Mart came in handy. In a survey conducted in 2009, it showed that 71% of the households thought that Wal-Mart saved them money. Its financial performance was also satisfactory and it was placed second in Fortune magazine.
Wal-Mart has survived on passing risks onto its employees and suppliers. They have achieved this through putting pressure on its vendors to increase sales. Workers are also put under pressure to meet set targets with their lunch breaks and overtime pay being done away with by their supervisors. (Lichtenstein 2009, 345). However, with the election of Barrack Obama, the newly elected legislators and reformers wanted to revolutionize the market. They sought to raise the working class earnings and protect workers from unregulated use of managerial authority.
Although ten percent of the consumers refuse to shop at Wal-Mart for such political reasons, the company has searched abroad for new customers. In addition, Wal-Mart’s management has taken it upon itself to reform America’s labor policies. This is through collective bargaining where it would be required that majority of the staff accept adherence to the trade union. This will enable members of trade unions in Wal-Mart to avoid corporate propaganda to avoid long periods of employer dominated campaigns. The company fights by all means necessary any significant reform made by U.S Congress on labor laws. The company successfully fought all the 26 lawsuits as at December 2008.
With the change in administration and Hilda Solis as a Labor Secretary, Wal-Mart reviewed its stand and announced it would be resolving lawsuits filed against it on violation of workers’ rights. (Lichtenstein 2009, 349). On health insurance cover, the company had taken out policies for only 52% of its workforce. Given that the company spent $6.6 million on lobbying for government policies in 2008, it is a clear indication that they were determined to be a key player in the new government administration. Wal-Mart’s president sanctioned liberals ideas by to the government that big companies either pay some money to the government or pay workers health insurance. This was a move to place Wal-Mart on the side of unionists as a disguise for leveling the playing ground with its retail competitors who did not welcome the move (Lichtenstein 2009, 353).
Despite all its public relations efforts, Wal-Mart’s expansion has been frustrated by municipal councils and other civic organizations who have hindered it from expanding into the most profitable areas in the U.S. Wal-Mart has countered this by modifying its stores to be more appealing to the customers thus increased sales by 40 percent a year (Lichtenstein 2009, 354). Wal-Mart is also facing stiff competition from other big retailers. Despite its innovation, other firms in the retail industry duplicate its strategy. This is in turn translated throughout the retail chain. The business relationship between America and China has also cost Wal-Mart because inflation and interest rates have raised thus the company can no longer brag of saving its clients so much money.
Wal-Mart’s story is a pace setter for many new companies facing numerous problems wishing to cut a niche in a world operating in unfair practices. The main problems Wal-Mart is facing are associated with the fact that the company has outgrown itself as a result of large scale operations. As illustrated by their long term motto of reaching where they have not, Wal-Mart has been successful in its expansion program.
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