Business & Branding: Walmart

What if Wal*Mart's strategy was to partner with the community?
Derrick DayeOctober 20, 20061641 min

What if Walmart’s strategy was to partner with the community?

•Moving into existing small-town infrastructure – being ‘one’ with main street
•Using local banks to support the local economy as opposed to wiring all funds back to Bentonville
•Sharing access to its resources to help support non-competing small business
•Leading the way in preserving small-town America (A cause that would help transform some of its biggest critics into advocates)

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3 comments

  • Cody Webb

    November 2, 2006 at 6:59 pm

    What is wrong with Walmart? A business can only survive if it continually offers its customers a service and/or product that customers demand. Making promises, setting expectations, and then keeping and exceeding expectations is essential to the survival of a company. Walmart has positioned itself as the lowest price retailer and have done excatly what they needed to to come through with their promises. The proof that Walmart is an incredible business can be found in their wallet and the number of customers entering Walmart’s doors everyday. Now are they socially and enivronmentally conscious. I don’t know, but I if they aren’t then who cares, that’s not why they exist. There are plenty of organizations, associations, individuals, businesses,governments etc. that are making sure that human survival is sustainable. Are they trying to help mom and pop shops? Of course not, what business strategy says, “Let’s do all we can to help our competitors.” Nobody that’s still in businesses that I know of. Now are they perfect? No. Could they do better? Of course. But all the noise of how “evil” Walmart is seems to be based more on jealousy than anything else.

  • Derrick Daye

    November 6, 2006 at 3:53 pm

    Cody, I don’t think you are completely seeing the ‘Big Picture’ as it relates to Wal*Mart. Yes, this is an organization that has had incredible success that can be measured in many ways. At the cash register alone they take in 244 Billion Dollars. They will make more in one quarter than Home Depot will all year. That’s quite a story to tell.

    Now let’s measure their success in other areas. Starting with the relationships they have with the people that really count – their customers. According to the University Of Michigan’s annual customer satisfaction rankings, Wal*Mart ranks below average on a scale of 1 – 100. Who ranks higher? Almost everyone.

    Kohl’s – 80
    J.C. Penney – 78
    Target – 78
    All Others – 77
    Dillard’s – 76
    Group average – 75
    Army and Air Force Exchange Service (AAFES) – 74
    Federated Department Stores/May – 74
    Sears, Roebuck – 73
    Wal-Mart – 72
    Kmart – 70

    What if we measure employee morale? Undoubtedly you have heard of complaints of low employee wages, benefits and lawsuits involving discrimination. The clear perception is employees have it better elsewhere.

    What has been the impact of all of this? There is a seemingly well established ‘anti-Wal*Mart movement’ that has had some success in keeping Wal*Mart out of communities. The ‘movement’ has written books and created websites like http://www.wakeupwalmart.com to support its cause.

    You may ask does Wal*Mart care about any of this if they are making more than $200 Billion a year in sales? You bet. These waves of deserved or undeserved negativity are making an impact on existing and potential relationships and sales.

    How often do you do business with people or companies you do not like? I think I know the answer. This movement is growing and the organization is feeling it. Carrying the torch of social responsibility would help counter this.

    Ironically, another challenge to Wal*Mart can be found in the type of relationship it has built with its customers. It’s a relationship based on price making it as strong as the bonds you make on a train to work. Wal*Mart caters to price-sensitive consumers. That is, customers that are always looking for the lowest price. If they can get it cheaper somewhere other than Wal*Mart -they will.

    I would like to see Wal*Mart survive its own success. So in my original post I offer Wal*Mart some different, perhaps obvious ideas to help counter the challenges it is facing. I encourage them to create ways to build an emotional connection with their customers. Their next ad campaign will use humor to try and do that for the first time. But I think adjustments at the core of the organization would be much more meaningful.

  • Jamie Parks

    November 7, 2006 at 4:10 pm

    WalMart’s present day business model is the “meaningless” warehousing and distribution of globally produced goods at a discounted price (+)plus a one stop lowest price consumer convenience industry i.e. fastfood/auto/vision/pharmacy/banking.

    WalMart’s business1dot0 “always low prices” strategy will eventually fail them (they just don’t clearly believe it yet.) I mean think about this: Why would a business want the community that it serves to be “broke” all the time?? So that they were always shopping simply on the consensus of getting the best deal?? What if Walmart’s core business model was to empower and enrich the less fortunate (and everyone else too) in their communities? To engage and assist in education, not just focusing on overworking and underpaying (no overtime pay) their employees – but instead teaching them about the future.

    The problem with WalMart is they cant see the future, or possibly they do see a future and it’s dim – not bright like Google’s. They share that dim perspective with anyone who enters their realm – thus causing their spirit to be crippled and in the end paralyzing their brand.

    I couldn’t agree with you more, the only true hope for WalMart is to transcend it’s current broken business model. This will come by way of empowering the shareholders to demand that WalMart become more socially interactive and economically responsible for the communities that they move into. If they don’t do this we are all aware of a few other companies that are able to provide this type of spirit to their customers.

    WalMart’s business model is hitting many walls as you have suggested in your previous posts, and they’re not alone. The entire business enterprise landscape is being subpoenaed for a drastic internal make over. There is no escaping dealing with these challenges, the communities are waking up, the shoppers are finding and building more meaningful relationships with local vendors and vendors online. Change is happening fast.

    1.0 leadership is currently spoiling the once trusted “down home deal” brand that Sam Walton so passionately set out to build his entire life. I wouldn’t be surprised if Google or Amazon is not patiently waiting in the back field for the few more years that it will take (if walmart does not wake up) for Walmart to effectively wreck its brand and drive down share price before one of them swoop-in and pick up some (in the future, much needed) real estate and warehousing infrastructure at a discounted “low price.”

    Anyway, great post and blog Ddaye – keep the thieves accountable…

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