PBS Frontline Feature — Is Wal-Mart Good for America?
May 7th, 2006
Here’s another PBS Frontline segment that touches on a number of the things we have or will cover regarding China. It’s titled, “Is Wal-Mart Good For America?” (look for the Watch the Full Program Online note and click on it).
True, the segment is now a few years old; yet even today, in the year 2011 and soon to be 2012, we continue to debate the issues raised in this film.
The first part of the segment addresses Wal-Mart’s business in the US, but then the documentary shifts to China and a more global perspective. The segment also visits Shenzhen, an area we will visit, and covers the supply-side of the China/Wal-Mart equation. The segment is very helpful in understading one of the many faces of the China-US business relationship.
Entry Filed under: Pre-Departure, Shenzhen, China
31 Comments Add your own
1. Dan N | December 21st, 2010 at 8:37 pm
My family’s new favorite movie is a cute animated film called Fantastic Mr. Fox. For those who haven’t seen it, do. Early in the movie, Mr. Fox says to his wife, “I’m tired of living in a hole in the ground. It makes me feel poor…”
My prediction is that Wal-Mart’s “low road” strategy is going to start failing them as the economy rebounds. They have obviously supported many families through this recession. However, our ancestors migrated to this country because they were tired of “living in a hole” and tired of “feeling poor.” I don’t think anyone really likes to shop at Wal-Mart. Walking into Wal-Mart is like walking into an AA meeting. You aren’t sure how it happened, but somewhere along the way you made some bad decisions and now you are paying the consequences. Their product line is homogenous and low quality. Their service stinks. Shopping at Wal-Mart makes us feel poor. Wal-Mart isn’t our desired future, it is a consequence of our past. Americans are pretty good at recovering from bad decisions and getting things back to the way they used to be.
With regards to Wal-Mart’s sourcing practices in China, I’ve already spoken my mind on the “Globalization: The Good, The Bad, and The Ugly” post. To reiterate, cutting costs by utilizing laborers who are being denied basic human rights is unacceptable. Retailers like Wal-Mart should be required to certify that all of their goods are sourced in compliance with fair trade laws. It was unacceptable when the southern states used slave labor to gain an unfair advantage in trade in the 19th century and it is unacceptable for Chinese suppliers to do the same today.
2. Katie Moeller | January 7th, 2011 at 9:00 am
First things first, Wal-Mart makes me sick. I dislike everything the company represents and has done to America and its citizens. I understand that I am fortunate and have the opportunity to pay more for products and be selective in the retailers I visit. However, there are people who are forced to shop at Wal-Mart due to financial stress. It is frustrating that the people who have to shop at Wal-Mart probably lost a job due to switching manufacturing over to China. Alright, off my high horse, let’s get to the video.
There were highlights in each of the five videos that I thought were interesting. Overall, it was an informative video that many people should see. First, learning about the push system is interesting. Wal-Mart calls the shots on what it wants to produce and what it wants to pay. Suppliers will make that happen because they understand that if they can earn Wal-Mart’s business, they will be successful. Second, the story of Rubbermaid was shocking. When their raw material prices went up, Wal-Mart wouldn’t accept it, and they started dropping their products. The amount of power and control Wal-Mart has is astounding. Third, the Wal-Mart culture makes me sick with all of their pep rallies in the stores in the morning. Highlighting the high gross margin they capture on each product. The opening price point scheme was fascinating. It seemed like a way to take advantage of customers. Fourth, learning about the Shenzhen port and how it’s the third busiest port due to Wal-Mart products. Or how much different the US port is compared to the Shenzhen port in terms of volume. Finally, seeing the aftermath of how Wal-Mart has caused US producers to shut down because they can’t compete. Even opening up a Wal-Mart next to a former production facility, ouch.
I think I could go on and on about this video and Wal-Mart. I learned some great things about Wal-Mart, production, and the ports. I have to say that it probably made me more frustrated with how much opportunity the United States has lost due to Wal-Mart and China.
3. David Hart | January 8th, 2011 at 5:49 pm
This video gives us an interesting perspective of Wal Mart. It is fascinating to observe Wal Mart’s rise. They have quite a bit of power. It is interesting to observe in the video what some of Wal Mart’s critics have to say.
Whether we like it or not, this seems to be a powerful new model in today’s business world. Retailers, rather than manufacturers, have more control. The video shows that Wal Mart uses technology to track its goods closely. This efficiency helps them keep track of what consumers are buying so that they can control inventory levels. This is a very effective way of running operations efficiently.
The critics say that Wal Mart is hurting America by forcing manufacturers to produce their products in China. While this is true, it is not just Wal Mart, but a trend with retailers everywhere.
One economist in the video noted that while the outsourcing of jobs to China and other countries has caused the USA to lose manufacturing jobs, he argued that other sectors of the economy picked up these lost jobs. He said that most economists believe it is a wash for the job market. I would be curious to know if this is accurate.
Overall, the global economy is constantly changing. For us to be able to keep up, we must be willing to learn new skills and adapt to the ever-changing environment. Those who do so will remain competitive and be able to navigate the waters of the future.
4. Cassie Bettencourt | January 9th, 2011 at 5:54 pm
After watching the video, I found myself revisiting the title: “Is Wal-Mart good for America?” I know that I personally do not like Wal-Mart and despise shopping in them, however, I also realize I am fortunate enough not to have to. Being aware of this bias, I tried to watch the video with an open mind. I found the two conflicting economists opinions at the end of the video particularly interesting. Although I think the first had a valid point by stating that Wal-Mart is good for America since it supplies the things that Americans want to buy thus improving their standard of living, I can’t help but side with the second economist who plainly stated that people need to buy things, but they also need to work. It is a blatant fact that Wal-Mart has taken away jobs from many Americans. Also, the fact that Wal-Mart became dependent on the Asian market and then, in turn, pressured other retailers to seek help from this market is terrible. As such a large corporation that has become the most powerful retailer in the global economy, I feel that Wal-Mart has ethical responsibilities beyond those of other businesses and should no longer purely act in its own self-interest. In essence, it has become a retailer bully by calling the shots with its manufacturers and perpetuating the aspects of US-China business relations that many people find controversial.
On a slightly different note, I found the part of the video on the Port of Long Beach really interesting. The statement that the US is sort of like a 3rd world country because we are shipping in consumer products and shipping out raw materials definitely made me think.
5. Robbin Forsyth | January 15th, 2011 at 1:21 pm
I have seen this Frontline before, (several years ago) and to watch it now is an interesting perspective on America before the start of the latest recession started.
I struggle with any judgment on Wal-Mart. On one hand I think that the company is an amazingly well run business. On the other hand, some of the human impacts of its actions are hard to stomach.
I guess my bottom line is this; since Wal-Mart is a business, its single most important responsibility is to its shareholders. Wal-Mart is very profitable and therefore it is good for its shareholders and good for America.
Business is not fair and a successful business must innovate in order to grow and generate profits. Wal-Mart is the logical extension of a successful strategy and disciplined execution. I believe that since Wal-Mart is the most aggressive and disciplined competitor it will always be a target for those that cannot compete. If Sears, K-Mart, Woolworths or any of its domestic competitors had been as visionary and successful, they would be targets of the same type of criticisms. American business is filled with stories of once “great” companies that were successful when they had no real competition. General Motors once enjoyed more that a 50% market share in the USA. Through five decade of mismanagement, that has eroded to less than 25% in 2009. The same is true for Sears Holdings Company. The previous version of this company, Sears & Roebuck was once the largest retailer in the world. Not any more… Companies that fail to evolve their strategies will not continue to prosper.
The Rubbermaid example in the video is another example of a company that could not react to environmental pressures. The ways the story is portrayed lacks any real objectivity and is disappointing for a Frontline. The reporter tells us that Wal-Mart dealt Rubbermaid, (RM) a “body blow” by dropping several products over costs increases. Afterwards he makes a passing mention that “lapses” in management also might have contributed to a downturn in RM’s business. If RM was such a innovator why would they be so dependent on a single customer? If RM was so highly regarded a maker of quality products, why are they selling to Wal-Mart? My guess is that the management at RM got lucky. Initially they were able to sell Wal-Mart a couple of high volume and margin items. This made them fat and happy. When this situation changed, they didn’t find another way to compete, they walked away from what had been the easy business and said it wasn’t “fair.”
Business is not fair and companies that need fairness will never survive.
If Wal-Mart did not offer value their stores would not be profitable.
6. Jessica Shayler | January 21st, 2011 at 3:50 pm
Ok, here ‘goes…
I don’t think we need to fight Wal-Mart and global competition, we need to adapt. The global economy and global competition are here to stay (baring an apocalyptic scenario), so I think we need to stop whining about losing jobs and start thinking of ways to adapt to the new world we live in.
“Trade flows do not effect overall employment numbers, they effect the kind of jobs we have. So… jobs have been eliminated because of Chinese competition. Elsewhere… jobs have been created…because US consumers have saved money by shopping at Wal-Mart… they have more money…to buy something else which creates… opportunities for other businesses [so] they hire workers they would not have hired otherwise.”
That is one of the key quotes from the film that stood out to me. Yes, some kinds of jobs are gone, but there are other opportunities. Here’s another beauty:
“Job opportunities for kids coming out of HS in this area are much lower now than ten years ago” (because the factory is gone).
“What are these kids going to do?”
“I don’t know…”
How about go to college? Earn a degree in engineering or business, and snag one of those jobs from “other businesses” who hire workers “they would not have hired otherwise” (before global competition).
One of the conservative economists made this (paraphrased) poignant comment:
“People are not just consumers, they are also workers who need to earn a decent standard of living.”
Exactly. Factory jobs obviously can no longer do that for US workers. So they need to stop complaining about the big bad Wal-Mart and start adapting to the new jobs which can offer them the standard of living they need and want.
Disclaimer: If the reports I’ve heard are true, I do not agree with how Wal-Mart treats it’s own staff regarding wages and benefits.
http://www.thirdworldtraveler.com/Corporate_Welfare/WalMart_Welfare.html
http://money.cnn.com/2004/05/24/news/fortune500/walmart_subsidies/
7. Brady Haug | January 29th, 2011 at 10:49 am
Last quarter, in the Human Resource Management class, we watched a couple of videos on just how poor Wal-Mart’s employees are treated and how companies are bullied by them (Forcing Rubbermaid’s costs to remain the same). I don’t agree with many of their practices, but in terms of globalizing, they are leveraging resources with their power in an incredible way. Customers shop at Wal-Mart because it’s a one stop location and it has the lowest prices. My background is in supply chain management and the first segment was particularly appealing to me. I was unaware that they had created such a revolutionary change in logistics. By switching to a pull system and exploiting the bar code, they have created an exceptional efficiency model that companies have emulated. I also know that they are a leader in pushing manufactures to utilize RFID.
The documentary made a great point that Wal-Mart is respected for cost cutting, rather than for their corporate values, that companies like Rubbermaid embodied. Wal-Mart pushed retailers to the Chinas of the world, to take full advantage of cheap labor. The sheer size of Wal-Mart gives them a huge ethical responsibility to their workers. Since their supply is largely Chinese based, paying workers fifty cents are hour is blatantly terrible. Another interesting thought was that Wal-Mart’s outsourcing has created a wash. That the low prices have been leveraged in China, creating jobs, and in turn have created just as many jobs in the U.S. They may be creating jobs in places such as Shenzhen and throughout the U.S. but they are doing so at the edge of legality and not doing so ethically.
The documentary quoted a 120 billion dollar trade deficit in year of its making. Every video and article we read on outsourcing to China brings to light the fact that we must get our addiction to low costs and China under control. We are too reliant and have outsourced too many American jobs to China. In terms of Wal-Mart, it is their responsibility to treat their workers ethically. Just as they have the power to bully manufacturers on price, they should leverage their power to promote better working conditions.
8. Kristine Spencer | February 5th, 2011 at 12:40 pm
About ten years ago, a Wal-Mart was built very close to my parent’s house in Arroyo Grande, and the town has never been the same. Every time I drive to or from my house I have to deal with the awful traffic of people coming from San Luis, Nipomo, and the entire 5 Cities to shop at the hell that is Wal-Mart. Since Wal-Mart has gone in, a couple of pharmacies and other stores have closed. There has been a lot of controversy in Atascadero because Wal-Mart is has been trying to build a store there for years; I just saw an article in the paper saying that building a Wal-Mart in Atascadero will increase taxes to the city, but local vendors would lose millions of dollars. Unfortunately I don’t see Wal-Mart going away anytime soon. People definitely want a taste of affordable luxury, and shopping at Wal-Mart for necessities allows families to spend a little more money wherever else they want to.
I do agree that fighting over these low supplier prices in Asia does benefit Wal-Mart more than the consumer. Often these low prices aren’t as low as people would think for the rock bottom prices that they buy the product for. It is sad to see the loss in American jobs, and I agree with the second economist that says yes, low prices are good, but people still need a job.
All stores are starting to engage in what Wal-Mart is now famous for doing. Grocery stores, clothing stores, department stores, electronic stores and basically everyone else are using data to increase sales and margins. For example, when the area surrounding a Wal-Mart is preparing for a hurricane, instead of stocking up extra on batteries, bottled water, and canned food, Wal-Mart used data to see that customers are more likely to purchase beer and strawberry Pop-Tarts. Other companies can learn from Wal-Mart how to use the data that is all around them to make their business more profitable. Like the video said, Wal-Mart is setting the standards for corporations, and the nation.
Wal-Mart continues to evolve to meet customer’s needs and is doing their best to change their image. They currently have a huge corporate push to become more environmentally friendly. I just saw a clip about Wal-Mart on the Colbert Report and figured I’d share:
http://www.hulu.com/watch/212234/the-colbert-report-walmart-collaborates-with-obama-administration-leslie-dach
Regardless of whether I like Wal-Mart or not, they are obviously doing something right and keeping up with customer demand. It is encouraging to see their new focus on the environment and health, and it will be interesting to see what customer demands and trends they follow next.
9. Will Moeller | February 7th, 2011 at 6:54 am
Just because you can doesn’t mean you should.
Just because Wal-Mart has figured out the best formula to get products to Americans at the cheapest prices doesn’t mean it should employ that formula. By being the lowest-cost operator, it forces its suppliers to do the same. Thus, it lowers the standards of quality for those like Rubbermaid who want to supply to Wal-Mart. Anyone who wants to sell to Wal-Mart and still stay in business has to slash operating costs. To slash operating costs, suppliers must also lower standards of quality. The fact that this has become the paragon of American retail is more than a bit disconcerting.
Discretion is the better part of valor.
Enough has been said on this board about how “bad” Wal-Mart is already. I don’t disagree. But condemning Wal-Mart is not enough. Those who don’t need to shop at Wal-Mart shouldn’t. However, gluttony is at the heart of the American way of life. Thus, my recommendation, use discretion. Not every American household needs a fourth flat screen TV or a Blu-Ray player. On the other hand, it seems silly to condemn people who do shop at Wal-Mart to buy a standard of living that wouldn’t otherwise be available.
This video continually reminded me of the stakeholder theory of wealth. In a general form, it recommends allowing the corporation to “spread the wealth” - low prices, wages, health insurance, and dividends, to its stakeholders - employees and stockholders. Wal-Mart’s stakeholders are clearly the Walton family, but also its employees through the United States and China - yes, China.
The video does a good job of tying in how Wal-Mart has changed the lives of some Chinese workers. Wal-Mart has created a bigger market for low-cost goods. China is a producer of low-cost goods. The one example of RCA closing in Circleville, Ohio was quite telling - they closed because the Chinese were selling at prices the Ohio plant couldn’t even produce at. A lot can be said about this shift in production from America to China. It can be cast in different lights.
On a human level, it is crushing to see Americans lose jobs and suffer as a result of Wal-Mart effect. On the other hand, Chinese workers “benefit” by raising their standard of living (this is debatable) by producing for Wal-Mart.
In the meantime, I’ll spend my consumption dollars elsewhere.
10. Sarah Weinzapfel | February 7th, 2011 at 5:21 pm
I don’t really know where to start here. Like a couple have already said, I am lucky to be able to choose where I shop. Although Wal-Mart gives people the chance to raise their standard of living, they’re only shopping there because they don’t have too much of a choice. It’s like the best choice of the worst. I liked how the video included view points from both sides and I respect the low prices for higher standards of living theory, but I can’t help but to agree with the fact that overseas manufacturing is stealing jobs. I think the people that shop at Wal-Mart and buy products for less don’t have that much extra money to be buying other things and creating jobs elsewhere like the one economist suggested. I didn’t like that they basically bully their suppliers. They lure suppliers in with big contracts, but demand unreasonable prices. Prices that are virtually impossible in America. They are forcing current suppliers who have Wal-Mart has their biggest client either out of business or over to China.
I know that the philosophy of the company and their ethics shouldn’t necessarily effect my answer to whether Wal-Mart is good for America, but I feel those all tie in together and bad practices in one of those areas is bad for business all around. In our HR class last quarter we watched a documentary on how Wal-Mart treated their employees and kept them stuck in low paying positions and bullying them. Even if Wal-Mart’s “higher standard of living for Americans” idea is something they really believe and they have good intentions, the whole idea behind Wal-Mart will eventually run high standards of living into the ground. I don’t think Wal-Mart is going away, but I don’t see good things coming of it in the future. The part of the video when they went to the Long Beach port was extremely disheartening. I knew we were in a large trade deficit and knew we imported millions of dollars more than we export, but I never thought of it as us being a third world country. It’s absolutely true though. We export cotton and they send us things that we need in our everyday lives.
One thing that I thought was interesting that was actually positive was their extremely efficient manufacturing logistics and how other companies have adopted it and become more efficient. I had no idea how much they had changed the logistics and how influential it was.
11. Ashley Ogden | February 13th, 2011 at 12:30 pm
“Wal-Mart and China are a marriage made in commercial heaven”, it is so true. They are very complimentary. Wal-Mart wants the very cheapest goods it can find and China makes those goods by the boat-load. I think that a lot of Wal-Mart’s initial success was because of their aggressive leader, Sam Walton. He started the “opening price point” method that they are still using today and they are just as aggressive as they have always been. An example is their “reverse-auctions” where they put manufactures up against each other to get the lowest price. It was surprising to me that a lot of these bids are just over a penny or two. That seems a little too aggressive for my taste, but is that why they are able to be so successful? Another interesting point is that they are not always selling the at the lowest price, but by using their “opening price point” method they can make their customers think that they are. I don’t think that Wal-Mart is practicing the best business ethics, but it is unbelievable how successful they are able to be by selling the cheap consumer goods, and the same goes for China.
12. Anthony Kallioinen | February 14th, 2011 at 10:09 pm
Wal-Mart is the largest company in the world. Its reports the highest sales of any company, indeed sales far higher than a combination of many of the tech giants. Wal-Mart has left many other large retailers in the dust because of their business model of low-cost/high volume retail with a high turnover rate. In centuries past, there has always been a powerful company that rises to the top and shows businesses the way. We are currently in the era of Wal-Mart; where the power used to be in the hands of large manufacturers, it now rests in the hands of global retailers. By combining low cost manufacturing with industry leading information system technology, Wal-Mart is able to track all product trends and stay ahead of customer demand to make the most efficient use of its product offering. The video talks about how detailed the information gained from the barcode can be and how powerful this information is. We learned in the MIS class (Management Information Systems) that this is a process that can lead to data-mining — the practice of extracting business intelligence from sales data.
The problem that I see starting to form is one similar to a monopoly. Once a company becomes so large, it feels that it can throw its weight around. This is what happened in the case of Rubbermaid V. Wal-Mart. Although others large suppliers accepted the price increase from Rubbermaid, Wal-Mart would not. The reason this is such a big issue is because Wal-Mart had replaced hundreds of other suppliers, thus becoming one of their largest customers who consequently had a large influence on Rubbermaid’s business practices.
It is amazing the margins that foreign imports have in our American market. Wal-Mart was receiving up to 80% profit margins on foreign goods. This really puts the outsourcing of manufacturing into perspective. This trade agreement with china is a match made in heaven. On one side, you have a global retailer looking for the cheapest price and on the other, a global manufacturer searching for large contracts. Unfortunately, with this agreement, the US had a trade deficit of $120 billion last year alone. There is a large debate however whether this is in an overall way good or bad for the United States. Some people argue that a conservative estimate of jobs lost is over 1 million. Others say that the savings passed on by Wal-Mart’s prices have put more money in the pockets of consumers, opening the door for more entrepreneurial opportunities. This is little consolation for the people directly losing their jobs however. Choosing to fight, they claimed that the Chinese do not play by fair trade standards, that their currency was up to 40% undervalued and that their workers were not given basic rights and decent working conditions. Wal-Mart chose to side with the Chinese, protecting foreign jobs over domestic. Many people suspect that this was done to protect their own profitability over American jobs. I’m not convinced that this is incorrect.
As controversial as it is to say, I think Wal-Mart is good for America. For so long the United States has been used to its standard of living and it simply does not enjoy being threatened by Chinese manufacturing (or any global threat). Although some people are losing their jobs, I think that wages and the general wealth of this nation have been ‘inflated’ for years. Finally, competition is brining the living standards of the world to a more balanced place. This is the same as the path of developing nations, just in reverse. In the video for the Globalization post, we learned that things are initially bumpy for a little while: workers must work in sweatshops until demand for workers raises wages and working conditions, and the standard of living in general goes up. I think America is just seeing this in the reverse. Jobs will be lost but eventually things will balance out. We can’t ask for low prices and keep expensive American production at the same time. Something has to give. Although I don’t agree with Wal-Mart’s general practices, I think in these ways it is good for America.
13. Tara Millard | February 21st, 2011 at 10:05 pm
These videos highlight the astounding global power that Wal-Mart has claimed in its ability to manipulate the global market to fit their likes and needs. If Wal-Mart has this sort of global power to get their way in international matters, their power may seep from the consumer market into one of political dominance in the worldwide market.
The Rubbermaid example was one of great concern. Wal-Mart has the ability and the willingness to use their overarching market share to essentially price all of the raw materials they purchase at the price they choose. Had Rubbermaid chosen to keep high prices and lose Wal-Mart’s business, the vitality of Rubbermaid itself would have been at stake. It leads to me to wonder if any company has stood strong against Wal-Mart and won the pricing battle. Unfortunately, I believe this is highly doubtful.
Wal-Mart is a company that everyone loves to hate, and rightfully so. Yet, the lines at Wal-Marts worldwide continue to stretch and the crowding at the store has become a topic of common conversation. In this difficult economy, Wal-Mart is flourishing because people don’t have the ability to spend based upon business practices or underlying motives. Rather, consumers in this day must buy based upon price alone, and no other retailer can even come close to competing with Wal-Mart. Local businesses are suffering as Wal-Marts continue to be built.
I had never before realized how impossible Wal-Mart has made it for competitors to compete. After reflecting upon these videos, I would like to swear off shopping at Wal-Mart altogether. Unfortunately, I am working to put myself through school and truly cannot afford to make this choice. Until I can practice what I preach it is quite contradictory to bash on Wal-Mart as an irresponsible global power whilst sitting at my desk surrounded by school supplies bought at……. You guessed it, WAL-MART!
14. Randy Camat | February 25th, 2011 at 4:19 pm
“Is Wal-Mart Good for America?” Hmm…I would say yes and no. This question is quite simple, yet it involves complex variables to actually pinpoint a right answer. It really depends on how you look at it. Wal-Mart’s reputation of having the cheapest prices is good for America especially in these economic downturns. However, the fierce competition that Wal-Mart brings is very detrimental to struggling businesses, forcing many to shut down due to their inability to keep up with the high demand of low cost goods. This leaves a great number of people out of jobs and unemployed. It is ironic that probably the one job option to take in some areas is the opening at the very same company that took them out of business. After watching a video on Wal-Mart last quarter for the Management of Human Resources course, I personally do not want to have any associations with Wal-Mart. I learned of Wal-Mart unethical practices of utilizing Chinese workers at dirt-cheap rates to manufacture many of the products sold here in the United States. Domestically, Wal-Mart would tell its employees to work on a part-time basis and seek the help of welfare and other forms of government funded aid. With all the money that is being brought in by “the world’s largest company,” then why can’t it take care of its most important vital source? Not only is Wal-Mart taking money from the government to care for its employees, it also contributes to the huge trade deficit ($36 billion in, $3 billion out as mentioned in the video) we have with China.
However we see it, Wal-Mart is here to stay for the good and bad. With that being said, I agree with Jessica’s comment in that we need to adapt. I don’t have the absolute answer on how exactly to adapt to these changes, but I do suggest that we evolve from the working bee mentality to a more entrepreneurial state of mind to create our own work and generate income.
15. Amanda Podesta | February 25th, 2011 at 5:51 pm
There was a famous Harvard Business Review paper in 2004 that garnered much debate about how one can find success in business in times of extreme competition. The postulate was that success really comes down to finding “blue ocean,” (i.e. delivering a product or service that is so utterly differentiated and superior to that of your competition, that you essentially have no competitors). In the world of retail, I believe that producing a distinctive good or service is the only lasting way that a storeowner will ever be able to find blue ocean—a truly sustainable niche. In other words, chasing low-prices by changing your stocking practices to favor a particular à la mode “Walmart” style may offer short-term success, but in the end, is a fool’s game.
On an aside: in discussions with those whom Wal-Mart has done business, I’ve heard it’s a whirlwind romance until two years down the road when you’re confused why you’re in the divorce courts with your pants about your feet. I’m not surprised that Rubbermaid ultimately had to compromise its product.
16. Chris Bruns | February 26th, 2011 at 1:34 pm
I found that the video was very interesting and offered a lot of information I didn’t know. As the video pertains to China, I was surprised to learn how much larger the margins were for Wal-Mart when they would sell low-cost imported items as compared to American made. I also didn’t know Wal-Mart could put that type of pressure on suppliers and essentially say that if the supplier wanted to keep their business, they would need to have a factory in China. Chinese quality is at or above world standards and businesses and nations around the world are investing, including Wal-Mart. It was strange that Wal-Mart and China would be described as a joint venture with the goal to dominate the US economy and that Wal-Mart is providing a gateway into the US economy from other nations. It was baffling to see the huge trade deficit we have in the US and being referred to as similar to a third-world country in that we are only shipping raw-materials. I agree with the point that it is more beneficial to China with our trade agreement and that most people have been hurt by trade. It was extremely difficult to see towns and business and people being put out on the street because of the foreign goods being brought in. I agree with the points made that Wal-Mart’s low wage, low prices, and global reach are destroying competitors and other ways the world works. But I can’t point the finger, because I purchase cheap foreign goods and have shopped at Wal-Mart.
17. Jessie Wilkie | February 26th, 2011 at 11:06 pm
Is Wal-Mart good for America? No would be my answer before even watching the PBS video. I have already done a lot of research on the Wal-Mart and have concluded that it’s evil. It puts small, medium and large businesses, suppliers and manufacturers out of business. It has been eliminating local businesses. The documentary echoed a lot of things that I already knew, but there were some new things that I learned too. I have discussed them below.
Bentonville aka Vendorville where so many of Wal-Mart’s suppliers have offices. You don’t negotiate with Wal-Mart. The retailer now has the power and the manufacturer is the underdog. Rubbermaid went from selling to thousands of customers to having five to seven big take up most of their volume. Wal-Mart became Rubbermaid’s biggest customer. When the price of resin went up Rubbermaid had to have a price increase across the board. All the retailers accepted it except Wal-Mart. Wal-Mart decreased its carrying volume of Rubbermaid and this inevitably led to the decline of Rubbermaid. The company had to close its original plant and was selling off its stuff to international buyers. The irony is that Rubbermaid was the most admired company in 1994 and Wal-Mart was the most admired company in 2004. This represents a bigger shift in the structuring of the US economy. Wal-Mart also screwed an American television factory (Thomson) over. The factory was already facing stiff competition from Asian companies and Wal-Mart gave it more trouble. It ended up closing and 1,000 workers lost their jobs. Then to add insult to injury Wal-Mart opened up a superstore next to the closed down plant. Working at Wal-Mart would mean a pay cut for the laid off employees. One TV manufacturer fought back by filing an antidumping suit in DC. The manufacturer was met by the Chinese companies holding strong and also Wal-Mart who chose the side of the Chinese.
Wal-Mart has cult like rituals. The morning meeting has the employees meet and discuss the opening price points. Opening price points are the lowest prices in towns so they draw you into the department. Once in the department then you will shop around and might buy another product that isn’t the lowest price in town. But you don’t realize it because you were tricked by the low price point! Clever and evil…
The early 1990s saw Wal-Mart surpass its competition as the biggest retailer. The same era, however, also ushered in tough times for Wal-Mart. Walton died and the stock prices were down. This made Wal-Mart look to Asia for cheap goods where their profits were high. By the late 1990s Wal-Mart was dependent on cheap Asian goods. Thus, suppliers had to move operations to China to be able to meet Wal-Mart’s needs.
Wal-Mart has a global procurement center in Shenzhen. Wal-Mart has 6,000 global suppliers and 80% of those are in China. Chinese suppliers have learned how to do business with the US through suppliers like Wal-Mart. Wal-Mart makes use of reverse auctions from suppliers to get the lowest price through bids, which are often over pennies or just one penny. TCL televisions are marketed under brand names like Philips and RCA. Wal-Mart is the only customer that really matters to TCL.
Clinton had opened a trade agreement with China that in essence locked us into a deficit with China. $36 billion consumer products in and $3 billion of raw materials-equating to a $120 billion trade deficit with China. One of the results was that Wal-Mart and China are a joint venture. Wal-Mart imports between $15-$30 billion from China. It is providing a gateway for Chinese suppliers into the American economy.
So once again, is Wal-Mart good for America? It’s good for the elite. It’s the devil for the consumer class or the bottom 90% of the US society. It is destroying this country.
18. Jason Jay Sharma | March 1st, 2011 at 2:09 am
This is about the third time I’ve seen “Is Wal-Mart Good for America?” and still enjoy watching Frontline reveal Wal-Mart’s business practices (even though I know exactly what’s coming). Overall, this Frontline presentation is an informative tool for understanding what Wal-Mart is, how it operates, and how it has affected business in more than the obvious ways. During Fall Quarter, the Human Resource Management class also watched another video focusing on Wal-Mart and the treatment of its employees. All in all, Wal-Mart gets its fair share of the blame and criticism–no one can argue with that. However, there are practices that Wal-Mart has helped propel to the forefront of business and it is all for the better.
The best example of this is the greater use of information by Wal-Mart and its stocking systems affect on how many consumer businesses run today cannot be denied. The use of tracking devices such as RFID can be attributed to Wal-Mart’s introduction into their business model and daily store operations. The video mentioned that Wal-Mart utilized barcodes better than any other business, and it proves Wal-Mart’s attitude to use technology to further its growth (which leads to others using it as well). It will be nice to see if Wal-Mart will be the first consumer store in America to further utilize newer bar-coding systems such as QR in their stores.
As for Wal-Mart’s relation with China, .while we cannot say that they came up with the idea of importing cheaper goods from China, we can say they are the first to do so on such a grand scale. Clinton’s trade agreement with China was likely a godsend for the Walton’s. Wal-Mart’s cost-cutting initiatives can be applauded, but based on additional videos focusing on the treatment of workers at Wal-Mart related factories; their company-employee relation is quite iffy (to say the least).
Personally, I can say I shop at Wal-Mart, but not on a regular basis. My trips are usually preplanned and lead me to Wal-Mart for specific items only because I know I will find those specific items for the cheapest. Funny enough, Wal-Mart just years ago were known for their low prices, but it’s hard to see much savings during a visit today. I’m finding general stores, like my favorite Target, are matching if not beating Wal-Mart on some of the basics (I’m talking about packs of Hanes white t-shirts or socks–we all by these). Speaking of Target, I prefer it mainly due to its appearance and marketing–the persona of the store is not inviting to the most unkempt people, while Wal-Mart is. My least favorite part of going to Wal-Mart is shopping with some of those people. And sometimes, to tell you the truth, Wal-Mart looks and feels so dirty it could just use an old-fashion scrub-down.
In the end, Wal-Mart has been and still is good for America. It might not be in the most obvious ways, but its influence has pushed for technological integration and innovation for many businesses and stores.
19. Tim Easton | March 4th, 2011 at 5:14 pm
Wal-Mart is a fascinating company. I have done some previous research on Wal-Mart and am always amazed by their tracking and supply chain management systems. The information that they get out of the bar code is unbelievable, and it makes you wonder why other companies aren’t doing this. When a product is scanned at a checkout counter, the order is instantly placed, and the new product will arrive in a day or two. This seems like something all companies would want to incorporate into their business. The ability to move from a push to a pull system has been a huge advantage for Wal-Mart. They utilized their size and are now able to dictate what manufactures produce and at what price. I have studied supply chain management and know that a pull system is much more efficient, but it is hard to implement. Wal-Mart has been able to implement this pull system, and that is one of the reasons they are at the top of the Fortune 500 list. One of the things that I learned from the video was the pricing strategy at Wal-Mart, and how effective that has been. The opening price points are a great idea. Putting the lowest price point product in the middle of the isles to attract customers to the product they actually want to buy, that aren’t the lowest price, is a brilliant pricing strategy. As a business person I do not feel cheated that Wal-Mart is doing this. I know that Wal-Mart doesn’t always have the lowest prices, and you would be ignorant if you thought that they always did. If you are going to complain about unfair pricing, you have to do a little homework and not just believe all the crap that companies are feeding you of always having the lowest price.
As for the negatives of Wal-Mart, I would have to say that the Rubbermaid situation was unfortunate. Wal-Mart knew that the price of resin had gone up, and Rubbermaid was in a tough situation to be able to meet the extremely low price that Wal-Mart had set. It would be interesting if Wal-Mart could work with American companies in a way where they would both benefit. I am positive this is not a new idea, and something that obviously doesn’t have a solution yet, but maybe in the future some sort of agreement could be reached.
I could not agree more with everything Jessica said about American’s losing jobs because of Wal-Mart. It is time to suck it up. The world is changing and this is why we are falling behind. The quote about the high school graduates not being able to work because the factory closed was mind blowing. Go to college, go find another opportunity, but don’t sit back and complain. You can’t expect 2nd and 3rd generations to work in the same factory as their parents any more, it just isn’t a reality. Sure when a Wal-Mart enters a town it is likely that some small business owners might go out of business, but that would be the result if any “super-store” company entered that town.
I don’t really like shopping at Wal-Mart, but don’t have a problem with it or think that it is bad for America.
20. j hurley | March 5th, 2011 at 1:40 pm
Is Wal Mart good? It depends on how you look at it…
I have seen and read many articles that try to prove how bad Wal Mart treats its workers here in the U.S. Wal Mart has been blamed with providing incredibly low wages as well as not allowing or encouraging women to obtain higher positions within the corporation.
Also, Wal Mart recieves a lot of flack for sourcing all their products oversees. People accuse Wal Mart of taking jobs out of the U.S. as well as taking advantage of low pay working conditions in China.
Personally, I cant stand Wal Mart and don’t know why anyone would by the cheap, plastic products that they sell. However, most of America thinks otherwise and consume cheap products like these at an incredible rate. Due to the increasing need of these products, Wal Mart has been forced to find ways to supply these products at very low prices, and they should be commended for it. In terms of supply chain logistics, Wal Mart is a leading entrepreneur. Wal Mart has found ways to increase profits while reducing purchasing cost and has been able to do so by increasing transparency within the supply chain. Now, companies in America as well as around the world are looking at Wal Mart and taking lessons in supply chain.
So, is Wal Mart good for American? I really would like to say no… however, Wal Mart has done a good job behind the scenes, and is helping increase productivity and efficiency while reducing costs around the world.
21. Kyle R. | March 6th, 2011 at 1:07 pm
I believe this video contains some valuable information the most Americans need to know. In the past, I have studied Wal-Mart, but from a completely different perspective, Industrial Engineering. In some of my past classes, professors have emphasized the lean practices and information technology management. It is amazing how Wal-Mart has put such an emphasis on continuous improvement in regards to their costs and information systems. They understood very early how important it is to study their consumers and purchasing trends. They way Wal-Mart has surpassed all its competitors, is similar to how Toyota was the first automobile manufacturer to emphasize lean manufacturing practices while others were still focused on mass production. Placing an emphasis on efficiency and cost cutting is key to staying competitive in today’s environment.
However, it is sad to see the damage that has occurred here in the United States related to Wal-Mart’s practices. I’m all for improving a company’s operating efficiency and cutting cost in order to become a leaner corporation, but it seems as if Wal-Mart has taken it too far… or did they? I believe there are two way to look at this situation. The first approach would be to place all the blame on Wal-Mart for the destruction of multiple corporations and the associated job loss here in the United States. The counter approach it to look at Wal-Mart as a company that had to do what it did to stay competitive. If Wal-Mart never ventured overseas, who’s to say another company would not have. Today, there could have be another company doing the exact same thing here in the U.S., but based in another country. Moreover, it is just disappointing to see that this is the environment we live in.
I think there should definitely be more regulation of our trade with China. I believe the video stated that the $36B of consumer products coming into the Long Beach Port from China, while $3B was leaving in the form of raw materials. This is very concerning to me, and invokes questions about the future of our country. It also bothers me that China’s currency is not accurately represented. The video touched on this issue saying that their currency is undervalued by 40%. How can this be possible? The entire world needs to encourage China to stop this, or increase tariffs to make up the difference. The playing field needs to be level, and currently it’s not.
22. Tyler Sereno | March 6th, 2011 at 2:16 pm
This video convinced me that Wal-Mart is not good for America. I have never really liked Wal-Mart, but it is amazing to see how they became so successful and changed the American economy. Global retailers have become the most powerful companies in the global economy. Wal-Mart is the world leader in logistics and their efficiency is the best among all companies. They did this by shifting from a push to a pull system where they collect information and analyze it to tell the manufacturers what to make.
Wal-Mart has turned its back on American companies. The price of raw materials for Rubbermaid had increased so they needed to increase the price of their products. Wal-Mart would not accept a price increase so they dropped all Rubbermaid products causing a major decline for the company. Rubbermaid was forced to shut down their factory, and China was picking up the pieces.
The opening price point of products is how Wal-Mart has been able to be so successful. If you want to play in the 25% of Wal-Mart market, you have to be in a very low-cost place, and China is it. To remian a viable company in the long run, U.S. companies have to make the move to China. The flood gates opened when China opened trade with the West, and China changed drastically. China is a supermarket for manufacturing, and Wal-Mart has 35 supercenters there. Business with China has allowed Wal-Mart to offer low prices, but it is not a better deal for the customer, it is a better deal for Wal-Mart. Wal-Mart provides a gateway for China to enter the American economy. It is a constant struggle for American companies to compete with China and their low prices. Wal-Mart took the side of China in the case of China practicing unfair trade which I found ridiculous. Wal-Mart cares about nobody but themselves.
23. Matt Streiter | March 6th, 2011 at 6:08 pm
Wal-mart is bad for America. They say that they are trying to help the consumer by providing rock bottom prices but the harm greatly outweighs the good. The price that we, as Americans, have to pay in order to get that low price at Wal-mart takes away jobs, lowers the standard of living, and costs the public way more than the several dollar discounts you will get in the stores.
The products imported from China produced at a lower price than can be made in the states will ultimately destroy most major domestic manufacturing and increase our trade deficit. The agreement signed by Bill Clinton was to open trade with China, but on a more level platform. With Chinese workers extremely low wages in comparison to U.S. wages substantially reduced the U.S. opportunity for consumer exports since they can’t afford U.S. made products. On the flip side, Americans will eat up the Chinese products made at a fraction of a cost which in turn is sold as a greatly discounted product in comparison to the domestic competition.
For being one of the biggest companies in the world and representing the United States, it displays a poor perception of what Americans value. They treat their employees poorly, chase out small businesses, and exploit customers. Their ability to “pull” verse “push” allows them to call the shots and since they are such a huge company, their decision to come to a deal with a company or not can be a make or break situation. As seen in the “Rubbermade” situation, losing just the Wal-mart account created a huge profit loss in the business that eventually led to them closing their factory and relocating it to China.
Although the argument is that they supply affordable goods to people raising the standard of living, it really is quite the opposite. By opening and shopping at these stores small business are getting shut down, raising the unemployment rate. Additionally the standard of living without Walmart would perhaps be higher. You would have to consider the lifestyle changes of those who lost their businesses due to Walmart and the loss off manufacturing jobs in the U.S. by them contributing to the overseas production.
24. Ben Raymond | March 6th, 2011 at 6:35 pm
In general, I don’t think that Walmart is good for America. What they are good for are cheap consumers and the elite. Its not good to its employees, its horrible for competing businesses and local businesses, and it puts many Americans out of jobs. I’m not a fan of Walmart. I don’t like their cheap products and don’t respect the way they treat their employees or local business. But you have to acknowledge the fact that they are a very well run business.
Looking at Walmart from strictly a business perspective, its duty is to its shareholders. It is very profitable and thus good for its shareholders. It’s just not good for anyone who competes with it. Which is also a lot of Americans. But that is business. Walmart is going to keep growing their business. The partnership they have established with China allows them get products at a much lower price than anyone else. The sheer volume of their orders puts a lot of pressure on the Chinese manufacturers to compete for their orders, thus driving prices down even more. While I may not agree with all of Walmart’s practices, it is ultimately the consumer that continues to support Walmart.
The fact is that most consumers shop based on price. Many people don’t care how the price got so low, or who went out of business because of it. Walmart is going to keep supplying these low prices and continue the methods they use to do so. It is up to the consumer to make the ethical choice.
25. Chris Fung | March 10th, 2011 at 1:21 am
I’ll admit that I shopped in Wal-mart when I was younger and had little income. They are the low cost – one-stop shopping leader. However I try to avoid the place as I agree with those who say that it cost Americans their jobs. Perhaps it is just my own personal consciousness about the matter but I don’t mind paying a few cents more to help out American jobs.
I have a love/hate relationship with Wal-mart. In my supply chain class, we use Wal-mart as the epitome of what a retailer should strive for in terms of inventory turnover, speed of delivery, information transmission and logistics. It is amazing what they are able to accomplish and they should be applauded for what they have done to revolutionize supply chain and logistics. On the flip side of it, I don’t like how Wal-mart treats its employees. There are many examples in the history of the company where employees were treated unfairly and given poor benefits. You would think that for a company as profitable as they are, they would be able to reward the employees who made them profitable in the first place.
There lies the problem that I can see about the current situation with Wal-mart and the pursuit of low prices. The low prices are necessary to grab market share from your competitors. In order to have low prices, you have to have low variable costs. To have the lowest variable costs, you have to trim back every penny on wages, transportation costs, benefits, etc. You also have to have the lowest price for an item. To have the lowest price for the item, the supplier needs to make it for cheaper. To get it for cheaper, you’ll most likely have to go overseas to someplace like China. While it is good for a consumer, it is bad for anyone on the supply side of things. However as an MBA, I realize that this is the cost of doing business. Either you maintain a competitive advantage or you will be outclassed by someone else and fail. Usually this is at the expense of the people at the bottom of the company. So what does this mean for the working class? They would have to adapt and change. How, I don’t know for certain but I would imagine it would involve increasing their education in order to maintain competitive in the market place. As far as Wal-mart, I think America is walking a fine line about giving people what they want and for the price they want verses maintaining the standard of living. The status quo is changing and I think we as Americans have to face the writing on the wall.
26. J Vail | March 14th, 2011 at 12:45 pm
I find it very hard to stomach Wal-Marts, as in the store, the selection, the employees, the people inside, on top of the wake they have left on American manufacturing and domestic jobs. It’s also hard to fathom that they have so much influence that they force other companies to outsource and speed up globalization. Although I usually prefer shopping at local businesses, the current economic environment makes it nearly impossible to be competitive with Wal-Mart on any basis other than customer loyalty.
At the end of the day however, Wal-Mart didn’t use black magic to build this business. The model was well-designed, adapted to changes in consumer retail, and vigorously improved upon over time. Wal-Mart’s success shows that if you tightly monitor logistics until you have the buying power to control your supply chain, you can lower prices to the extent that there are few, if any, better alternatives. I’m not surprised by the Rubbermaid story and I have read similar cases involving other manufacturers – that’s pretty much the game you enter when you do business with Wal-Mart, and companies fall into the trap by evolving their business model around large orders secured with Wal-Mart.
27. JP Salazar | March 17th, 2011 at 11:53 pm
This is an interesting issue that can have some far reaching implications for our economy and our way of life.
Wal-mart has cracked the code when it comes to reaching the consumer. They are able to provide quality goods at a low price. But just because they are making huge amounts of money doesn’t make what they are doing right.
Going back to the title of this blog, “Is Wal-mart good for America”, well, yes and no. Wal-mart is able to provide a service that no other provider can match. By purchasing in huge quantities, often directly from foreign suppliers, Wal-mart can provide goods well below what other companies can offer them at. As such, many people rely on Wal-mart’s low prices because they simply can not afford to buy the goods anywhere else. Without Wal-mart and their ability to undersell the competition, these people would see a serious decline in their quality of life. On the other hand, Wal-mart is putting a lot of pressure on domestic manufacturing that can not compete with the low cost of goods offered overseas. In order to maintain their low process, Wal-mart is forced to purchase from suppliers that have the lowest price, regardless of where it comes from. Current trends have seen more and more manufacturing jobs being outsourced to places that have lower labor cost and fewer regulations like China to increase the profitability of the company. This is resulting in Americans losing their jobs. What is happening is that consumers have to choose whether they want access to cheap goods or whether they want to keep manufacturing jobs here in America. If the trend continues, the demand for cheap goods is going to continue to put people out of work. Americans need to understand that having access to cheap goods comes at a cost.
28. Omar Pradhan | March 18th, 2011 at 1:33 pm
Yes and No. The issue with Wal-Mart is very complicated. I hear many reasonable concerns about displaced small businesses that used to service the same customers as Wal-Mart but can no longer compete. This market pressure is causing many Americans to re-invent and re-tool. But I see this as no different than when the horse and buggy shops had to re-invent / re-tool at the dawn of the automobile age or when the passenger rail industry declined to a certain extent with the advent of commercial aviation. However, problems do arise when Wal-Mart engages in employment practices that harm and/or exploit workers. Moreover, when employees are prevented for organizing (officially or unofficially) to petition their managers about legitimate grievances, the overall good that Wal-Mart provides is rightly brought into questioned. On the other hand, when Wal-Mart sources and delivers goods to market at considerable cost savings, consumers benefit by not having to spend as much on purchases as they would have had to purchasing from an inefficiently run local business. Also, Wal-Mart is garnering praise for making reasonable and progressive demands on suppliers, as a powerful market-maker of globally sourced goods, which improve on sustainably, quality, safety, worker rights, etc. When honest and steady progress is made on these fronts, everyone wins. What would be nice to see is point of consumption technologies to add additional pressures on Wal-Mart’s producers, whereby signals are sent from “informed” consumers to would-be sellers / suppliers that their products were not selected for purchase because they missed the mark on sustainability, quality, safety, worker rights, etc. (recall previous comments on GoodGuide: http://www.csmonitor.com/World/making-a-difference/2009/0830/p25s05-lign.html).
29. Vladimir | December 27th, 2011 at 7:03 pm
The documentary carries the message that Wal-Mart is bad for America. Here’s how I see it:
Wal-Mart is good for Wal-Mart’s management, as any successful company generally is for those at its top. I would expect job security for those in its top or middle ranks to be quite good. Wal-Mart’s shareholders are cheering, but if Wal-Mart didn’t exist, they would simply invest elsewhere.
Wal-Mart is good for Americans as consumers because it offers better prices than other retailers. This would mainly be of value to low-income consumers. The savings at Wal-Mart would not be enough to change the quality of life for most middle and upper class families. The other value of Wal-Mart and other big-box stores is selection, which saves time. Wal-Mart is also very efficient in responding to customer demand.
How many manufacturing jobs were lost across the America compared to how many Wal-Mart jobs were created? I believe far fewer jobs were created than lost, but this is a result of pressure to lower costs in general which would have existed even if Wal-Mart didn’t. According to the video Wal-Mart jobs would pay less than manufacturing jobs. The jobs also don’t require or value the same skill set that unemployed manufacturers have. Wal-Mart does provide jobs to people who would otherwise be unemployed, but I believe Wal-Mart’s net employment effect in the United States is negative.
Wal-Mart’s power affects suppliers beyond forcing them to use foreign labor. Wal-Mart’s negotiating power reduces supplier margins regardless of where the product is made. Does a supplier’s volume increase enough to make up for this? I’d like to have heard suppliers answer the question: “How much have your profits increased or decreased since becoming a Wal-Mart supplier? Did you raise your prices on other retailers to make up the difference?”
Wal-Mart also hurts smaller retailers. Suppliers will not offer these retailers products at the prices they do to Wal-Mart. These stores also cannot take advantage of economies of scale like Wal-Mart. So they are forced to charge higher prices than and/or accept lower margins.
Without doing further research I would say that Wal-Mart has a negative net effect on America, but it has no effect on many people. The pro Wal-Mart interviewees point to the consumer benefits, because this is where Wal-Mart shines.
Wal-Mart is good for China, but that’s another story.
30. Kevin K. | December 28th, 2011 at 1:13 pm
Is Walmart good for America? This documentary answers, or deflects that question as well as the Walmart VP featured in the PBS special. For those associated with the company, Walmart acts as some sort of cult — just look at the shareholders meeting. Those apart of Walmart obviously think it’s great, but those left in its wake — shutdown plants, rundown businesses, and thousands left jobless — are forced to accept it from the Walmart and China controlled world. Is that good? No, but it is in a way progress from the increasing globalized economy.
One of the most telling lines from this documentary was when one of the economists stated that “Walmart and China is a joint venture.” With the billions of dollars at stake for both Walmart and China, this statement is most definitely true. However, it seems that it is not just Walmart that depends on China, but the whole of the American economy and our way of life.
As far the relationship between free trade, dumping, and capitalism, it seems that there are a lot of sore people out there — those who demand capitalism, but when they are beat by the most sincere form of it, they demand more regulation. What does this mean for trade in the global economy when America can no longer compete?
31. Daniel Fleek | January 16th, 2012 at 6:42 pm
I believe that Wal Mart is doing more bad than good to America although if they didn’t adopt their business plan, another company would. In terms of economically going to China to manufacture their product needs for the cheapest cost, I feel that any company that wants to stay competitive must do this to stay in business. Therefore, it will take some sort of government intervention for fair trade to be fair for everyone. However, I still think that Wal Mart has a responsibility for the USA since this is where they started and currently sell the most products.
When the video addressed the chain reaction that occurs when Wal Mart demands a product, it showed me the business shrewdness of Wal Mart management. In fact, I feel that Wal Mart is the perfect example of a very successful company under the rules of capitalism. However, it was interesting to hear their other strategies besides importing from China. For example, they mentioned that they put the items that are the lowest prices in town in the front row of each department to lure customers into the items that may not be the best price in town.
So is Wal Mart good for America? In terms of following the rules of capitalism to improve the overall GDP, I think it is doing a good job. However, in terms of providing jobs and benefits for employees and people who live around Wal Marts, I think they are failing. There are so any lawsuits regarding employment law and Wal Mart and it is crazy that almost all of those are settled out of court. This shows that Wal Mart will continue its often unethical and illegal modes of employment practice since the payoff of doing so is more that the payoff from being ethical and following the law which questions their morality. Also, since they are dealing with high volume prices that only countries like China can provide, it is actually putting many people out of work in America and providing them to workers in China. There either needs to be more regulations regarding the imports of goods from China or American companies must find other ways to stay competitive. As it is now, Wal Mart has developed a successful plan to maximize their profits.
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