The Wal-Mart You Don’t Know, Essay Example

Describe the problem faced by Vlasic. Why were they unable to oppose the sales plan put forth by Wal-Mart? Ultimately, how did responding to Wal-Mart affect their business?
The problem faced by Vlasic was the fact that Wal-Mart devalued their famous pickle brand by selling a gallon jar of the pickles for only $2.97. The article states this is a whole year’s supply of pickles.

Vlasic was unable to oppose Wal-Mart’s sales plan because Wal-Mart is a mega giant in the business that has a lot of control and is capable of putting pressure on its vendors, by having such a large market share and customer following. Also, the article states that Wal-Mart is largely centralized and able to pull suppliers from all over the world.

This this affected Vlasic’s business with the problem of deflated credibility with the buying public that their pickles were of a premium quality and should be sold for a premium price. This move by Wal-Mart affected Vlasic’s operations and their profits. This is an example of one of the reasons why Wal-Mart can bring the customers those everyday low prices, by eating into the pockets of suppliers, such as Vlasic.

Was this an ethical supply chain decision on the part of Wal-Mart? Also, highlight any sustainable ethics that was involved here.
Wal-Mart’s decision to drastically slash the price of Vlasic’s pickles was not an ethical one, as it relates to sustainability and corporate responsibility to uphold this virtue for all entities involved, including the suppliers (Business Ethics and Sustainability, 2013). Sustainability, in business, is the ability for a corporate to thrive. Wal-Mart’s model helps it thrive, but at the expense of crippling other company’s ability to thrive. Wal-Mart, by having such a selfish business model, hinders other companies from effectively establishing an endurance to ensure future business is successful.

What does this case tell you about how much influence a business can have with regard to its suppliers’ decisions and behaviors? What does this say about the conventional notions of the responsibility of firms for the practices of their suppliers (both in terms of individual firms and collectively)? Is it reasonable for consumers (or even regulators) to hold firms accountable?

Wal-Mart has a massive influence on the U.S. economy, and according to Hopkins (2003), Wal-Mart dictates consumer product choices and how much they pay for those products. The case study is an example of how much influence a large conglomerate, such as Wal-Mart, has over how its suppliers behave and make decisions. Wal-Mart is the major player in the industry and this reaches worldwide. The consumer affects price demand and Wal-Mart manipulates the pricing market by underpricing its offerings, which forces other companies and suppliers to lower their prices, and this causes a chain of pricing wars because other companies and suppliers try to remain competitive enough not to lose too much business.

As it relates to conventional concepts of the corporate responsibility of firms to suppliers, Wal-Mart’s model takes power away from the suppliers in many ways, such as causing American jobs overseas to low-wage countries. Also, Wal-Mart commands the cheapest imports from other countries, especially China, so they can further slash prices for consumers. Many supplier companies are forced to go out of business because of low profits by not being able to compete with Wal-Mart. Wal-Mart effectively kills its supplier’s brand integrity by underpricing their brand products.

It is reasonable for consumers to hold firms accountable for their actions because their actions affect the American economy in ways that most people don’t even realize. For example, according to the article, people do not realize that when they patronize Wal-Mart, they are contributing to the jobs being lost in this country. The cost of labor is much cheaper in other countries, partly because of Wal-Mart. According to Scott (2007), Wal-Mart’s cheap importing from China has displaced almost 200,000 American jobs. Wal-Mart’s imports greatly affect the entire U.S. manufacturing sector and its workers, with 68 percent of manufacturing jobs lost to overseas resulting from Wal-Mart’s importing so much from China. Most consumers do not know about this.

References

Business Ethics and Sustainability in the Steel Industry. (2013). Retrieved from The Times 100: Business Case Studies: http://businesscasestudies.co.uk/tata-steel/business-ethics-and-sustainability-in-the-steel-industry/what-are-business-ethics-and-sustainability.html#axzz2LQWzT6Zh

Fishman, C. (2003). The Wal-Mart You Don’t Know. Retrieved from Fast Company: http://www.fastcompany.com/47593/wal-mart-you-dont-know

Hopkins, J. (2003). Wal-Mart’s influence grows. Retrieved from USA Today: http://usatoday30.usatoday.com/money/industries/retail/2003-01-28-walmartnation_x.htm

Scott, R. E. (2007). The Wal-Mart effect. Retrieved from Economic Policy Institute: http://www.epi.org/publication/ib235/