his spirit to ride herd on the colossal Walmart organization. To the consumer in This case, originally prepared by William T. Rupp, Austin Peay Walmart:
his spirit to ride herd on the colossal Walmart organization. To the consumer in This case, originally prepared by William T. Rupp, Austin Peay Walmart: The Main Street Merchant of Doom Sam Walton, founder, owner, and mastermind of the small community, his store, Walmart, was seen as a friend when it came to town. On the flip side, many a small-town merchant had been the victim of Sam’s blazing merchandising tactics. So what is Walmart to the communities it serves? Is Walmart the consumer’s best friend, the purveyor of the free-enterprise system, the “Mother of All Discount Stores,” or, conversely, is it really “The Main Street Merchant of Doom? THE MAN NAMED SAM Samuel Moore Walton was born on March 29, 1918, near Kingfisher, Kansas. He attended the University of Mis- souri in the fall of 1936 and graduated with a degree in business administration. During his time there, he was a member of the Beta Theta Phi fraternity, was president of the senior class, played various sports, and taught what was believed to be the largest Sunday school class in the world, numbering over 1,200 Missouri students.? At age 22. Sam joined JCPenney. One of his first tasks was to memorize and practice the “Penney Idea.” Adopted in 1913, this credo exhorted the associate to serve the public; not to demand all the profit the traffic will bear, to pack the customer’s dollar full of value, quality, and satisfaction; to continue to be trained; to reward men and women in the organization through participation in what the business produces, and to test every policy, method, and act against the question, “Does it square with what is right and just?” In 1962, at age 44, Sam Walton opened his first Walmart store in Rogers, Arkansas. He took all the money and expertise he could gather and applied the JCPenney idea to Middle America. Sam first targeted small, underserved rural towns with populations of no was revised and updated by Archie B. Carroll, more than 10,000 people. The people responded and Walmart soon developed a core of loyal customers who loved the fast, friendly service coupled with con- sistently low prices. Later, Sam expanded his company into the large cities, often with numerous Walmart’s spread throughout every part of the city. THE STORE THAT SAM BUILT By 1981, Walmart’s rapid growth was evident to all and especially disturbing to Sears, JCPenney. Target. and Kmart, because Walmart had become America’s largest retailer By 2001, Walmart Stores, Inc., had become the world’s largest retailer with $191 billion in sales. The company employed one million associates worldwide through nearly 3,500 facilities in the United States and more than 1,000 stores throughout nine other countries. Walmart claimed that more than 100 million customers per week visited Walmart stores. The company had four major retail divisions-Walmart Supercenters, Discount Stores, Neighborhood Markets, and Sam’s Club ware- houses. As it entered the 2000s, Walmart had been named “Retailer of the Century” by Discount Store News, made Fortune magazine’s lists of the “Most Admired Companies in America and the “100 Best Companies to Work For,” and was ranked on Financial Times” “Most Respected in the World” list. By January 2016, Walmart’s sales had grown to $486 billion. The Walmart Way Sam’s approach was to promote the associate-the hourly employee-to a new level of participation within the organization. Sam, as the head cheerleader, saw his job as the chief proponent of the “Walmart Way.” The Walmart Way reflected Sam’s idea of the essential Walmart culture that was needed for success. Sam felt that when a customer entered Walmart in any part of the country, he or she should feel at home. Examples of the culture included exceeding customer expectations” and “ing people make a difference.” He was a pro- ponent of the “Ten-Foot Rule,” which meant that if a customer came within ten feet of an associate, the asso- ciate would look the customer in the eye, greet him or her, and ask if the customer needed . Sam, the CEO, hired the best managers he could find. He let them talk him into buying an extensive computer network system. This network corporate Sam’s First Store State University, University of Georgia, in 2016 satellite system enabled Sam to use round-the-clock inventory control and credit card sales control and pro vided him with information on total sales of which pro- ducts, where, and when. This computer control center was about the size of a football field and used a satellite for uplinking and downlinking to each store. SOCIAL AWARENESS: THE “BUY AMERICAN” PLAN Sam, the innovator, was responsible for two early social responsibility innovations: Walmart’s “Buy American” plan and its “Environmental Awareness” campaign. Walmart’s “Buy American” plan was in response to Sam’s own realization that his company was adding to the loss of American jobs by buying cheaper for eign goods. This concern drove him to find a solution In February 1986, about 12 months after the “Buy American” plan had begun, Sam held a press confer- ence. He showed off all the merchandise Walmart was now buying domestically. He estimated that Walmart’s “Buy American” plan had restored 4,538 jobs to the American economy and its people. The “Buy American” plan was one of Walmart’s early efforts at corporate social responsibility. The “Buy American” plan morphed over the years into the well-publicized “Made in the USA campaign in which Walmart called customers’ attention to these domestic products with special labels. Ironically, Wal- mart eventually abandoned this program and became one of the largest purchasers of products made over- seas. In fact, the company in time became the country’s largest purchaser of Chinese goods in any industry. Some say that by taking its orders abroad, Walmart forced many U.S. manufacturers out of business. THE “ENVIRONMENTAL AWARENESS” CAMPAIGN the quality of our land, air and water, and want the opportunity to do something positive. We believe it is our responsibility to step up to their challenge. In the stores, shelf tags made from 100 percent recycled paper informed customers as to the environ mental friendliness of the highlighted product. As a result of these shelf tags and Walmart’s advertising. customer awareness had increased, and some environmentally safe product manufacturers were reaping the rewards of increased Walmart orders. SAM AND THE EARLY MERCHANTS OF MAIN STREET Not everyone was excited to see Sam and his mecha- nized Walmart army arrive and succeed. Small mer chants across America shuddered when the winds of the “Walmart Way” began to blow in their direction. Kennedy Smith of the National Main Street Center in Washington, DC, said, “The first thing towns usually do is panic.” Once Walmart comes to town, Smith says, “Downtowns will never again be the providers of basic consumer goods and services they once were.” Stearabot Songs Some towns learned to “just say no to Walmart’s over- tures. Steamboat Springs, Colorado, was one such city, Colorado newspapers called it the “Shootout at Steam- boat Springs Walmart was denied permission to build on a nine-acre parcel along U.S. Route 40. Owners of upscale shops and condos were very concerned with the image of their resort and ski community, and Walmart, with its low-cost reputation, just did not fit. The shootout lasted for two years, and finally Walmart filed a damage suit against the city. Countersuits fol- lowed. A petition was circulated to hold a referendum on the matter. This was the shot that made Walmart blink and back down. Just before the vote, Don Shinkle, corporate affairs vice president, said, “A vote would not be good for Steamboat Springs, and it would not be good for Walmart. I truly believe Walmart is a kinder, gentler company, and, while we have the votes to win, an election would only split the town more.” Years later, Steamboat Springs finally got a Walmart. It won’t be found on the tourist’s lists of shopping places but it’s there. As awareness of the environment was on the rise, Sam looked for a way to involve Walmart in the environ- mental movement. In August 1989, an ad in The Wall Street Journal proclaimed Walmart’s commitment to our land, air and water.” Sam envisioned Walmart as a leader among American companies in the struggle to clean up the environment. Walmart wanted to use its tremendous buying power to aid in the implementation of the campaign. Walmart sent a booklet to manufacturers stating the following At Wal-Mart we’re committed to improve our environment. Our customers are concerned about Iowa City In lowa City, Iowa (population more than 50,000), Walmart was planning an 87,000-square-foot store on the outskirts of the town. A group of citizens gathered enough signatures during a petition drive to put a referendum on the ballot to block Walmart and the city council from building the new store (the city council had approved the rezoning of the land Walmart wanted). Jim Clayton, a downtown merchant, said, “Walmart is a freight train going full steam in the opposite direction of this town’s philosophy. If businesses wind up going down, of these activists, Paul Glover, who was an antiwar orga- tiber, defined Walmart as the epitome of capitalism, which he despises. For Glover and others, Walmart stands for “everything they dislike about American Society-mindless consumerism, paved landscapes, and homogenization of community identity.” Clayton says, “you lose their involvement in the destruction of the environment, they turned their efforts community, involvement I promise you won’t get with some assistant manager over at Walmart. 12 Efforts to stop Walmart and the Iowa City Council were not successful. Walmart opened its lowa City store on November 5, 1991. PAWHUSKA, OKLAHOMA Meanwhile, in Pawhuska, Oklahoma, as a result of Walmart’s entry in 1983 and other local factors, the local “five-and-dime,” JCPenney, Western Auto, and a whole block of other stores closed their doors. Four years later, Dave Story, general manager of the local Pawhuska Daily Journal Capital, wrote that Walmart was a “billion dollar parasite” and a “national retail ogre. Walmart managers have become very active in Pawhuska and surrounding communities since that time. A conversation with the editor of the Pawhuska paper, Jody Smith, and her advertising editor. Suzy Burns, revealed that Walmart sponsored the local rodeo, gave gloves to the local coat drive, and was involved with the local cerebral palsy and multiple scle- rosis fund-raisers. On the other hand, Fred Wright, former owner of a TV and record store, said, “Walmart really craters a little town’s downtown.”** OPPOSITION TO WALMART GETS ORGANIZED By the 1990s, there were dozens of organized groups actively opposing Walmart’s expansion.” Some of these groups were and still are run by social activists who are reliving the 1960s and 1970s. Instead of protest- ing the Vietnam War, nuclear proliferation, or the to Walmart specifically and capitalism in general. One Boulder, Colorado Opposition In Boulder, Colorado, Walmart tried to counter these allegations by proposing a “green” store. Steven Lane, Walmart’s real estate manager, said that a green store” would be built that would be environmentally friendly, with a solar-powered sign out front and everything. s efforts were trumped by Spencer Hav- lick, an organizer of the first Earth Day in 1970, sug- gesting that the entire store be powered by solar energy. Mr. Lane did not respond. Protest organizers united against the spread of the “Walmart Way differ from the downtown merchants in that these protesters have no financial stake though they still regard themselves as stakeholders. These acti- vists attack Walmart on a higher, philosophical plane. The accusations ring with a tone of argument that was made by other activists protesting polluting industries (eg, the coal, nuclear, and chemical industries). These activists accuse Walmart of “strip-mining” towns and communities of their culture and values. One possible root of this culture clash may be attributed to the unique aspects of the internal corpo- rate culture at Walmart’s headquarters. This is a place where competition for the reputation as the “cheap- est” was practiced. An example is the competition among employees in procuring the cheapest haircut, shoes, or necktie. Consequently, as a result of the internal culture of Walmart and the external environ- ment, some analysts believe that a clash of priorities and values was inevitable as Walmart moved into larger, more urban settings New England Opposition Some of the greatest opposition to Walmart’s growth came from the New England area. This area holds great promise for Walmart because of the large, dense population and the many underserved towns. These towns are typically underserved in three ways: in variety of product choices, in value, and in conve- nience. The opposition to Walmart entering these New England markets includes some high-profile names, such as Jerry Greenfield, cofounder of Ben & Jerry’s Homemade ice cream, and Arthur Frommer, a well-known travel writer. In addition to New England, other areas, such as resort areas, opposed Walmarts because they have wanted to insulate their unique cultures from what they considered to be the offensive consumerism that is usually generated by Walmart’s presence. Make a summary and reflection Provide reference
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