Wal-Mart's genius lies in at least two areas- ideology and logistics. Wal-Mart's recognition of its place in the retail market was brilliant. Though an immense undertaking, Wal-Mart recognized that its philosophy of low prices could be achieved through expert logistics, state-of-the art inventory systems, purchasing power and self-promotion. Regarding itself as a consumer advocate- fighting to ensure the lowest prices for its customers- Wal-Mart embarked on a campaign to lower its costs in every aspect of business. This was accomplished through efficient inventory management and advanced distribution systems, which is commendable; however, the other end of the equation is squeezing suppliers and, even its own labor force, out of every penny imaginable. Wal-Mart, in its obsession to lower costs, was described by Business Week as, "a cult masquerading as a company."
The trickle down theory of Wal-Mart's competitive pricing is manufacturing outsourcing, the closure of local small business and low wages for employees. The retail equivalent of lean manufacturing, Wal-Mart eliminates every bit of waste out of its suppliers, local economies and employees. It cares not how it happens; just that it does happen. When suppliers can no longer be profitable with American workers, Wal-Mart discreetly suggests oversea manufacturing. As for the lost American jobs, well at least the unemployment checks will go a bit further. Competing local businesses, according to the CNN report, lose 25% of its business the day a Wal-Mart opens in its area- and many close their doors within three months. Wal-Mart considers this the price of capitalism. Wal-Mart preys on the local economy by offering low paying, low benefit jobs to the community which it has disrupted. For this, Wal-Mart has been continuously attacked for not paying overtime, sexual discrimination and the employment of illegal immigrants. In the same context, Wal-Mart remains union-free in each of its 3000 American stores. Workers quickly learned the cost of trying to unionize when in 2000, Jacksonville, Texas meat cutters voted in a union- only to have Wal-Mart start buying pre-cut meat eight days later.
Wal-Mart claims to be a consumer advocate, that is, your voice in demanding cheaper prices. While the argument could be made that Wal-Mart does achieve this, the question is at what cost. For are its consumers not the wife of man whose manufacturing job was shipped overseas, not the sister of a third-generation local business owner that had to shut down after 80 years of local ownership and is it not the daughter of a Wal-Mart employee that is paying a large percentage of his or her wages for health insurance?
In Wal-Mart becoming the world's largest retailer, success has bred arrogance- steadfastly displayed by its CEO, H. Lee Scott, Jr., in the CNN documentary. All too typical, and despite heavy litigation against his company, Scott denies every ounce of criticism directed toward his company- whether political, social, economical or cultural. In the interview, he even denied the message of a commercial that his company put out- even though it was an obvious response to recent social critiques. To not acknowledge Wal-Mart's impact on communities, American jobs, or its employees, erases any hint of creditability in anything he might expound on- even when he offers valid perspectives.
From the interview with Scott, it is obvious that Wal-Mart has no intention of changing who they are- which is both admirable and appalling. They will continue to invade communities, force manufactures overseas and fight any and all employee representation. Wal-Mart is judged, however, by the people- they are the ones that ultimately decide if a company does or doesn't succeed in their community. If you think Wal-Mart does more harm than good- then don't shop there, it is as simple as that.
For me, while I appreciate aspects of their business, it comes down to trust and, frankly, I think they would do just about anything to make a profit. I agree with Business Week, the company does have some cult-like aspects within it, and it does appear to be a propaganda machine. As an example, I believe disingenuous titles are always the foundation of deception; Wal-Mart calling its employees "associates," is like calling the Patriot Act, patriotic. Nothing could be farther from the truth.