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Q: Looking at the Wal-Mart Business week article, it is apparent that both Costco and Wal-Mart have some similarities in their business “philosophies”. While much of the information in the business week article is not explicitly stated in the Costco case, it is important to note the dangers that such business philosophies have for multiple constituencies. Identify constituencies that may be negatively impacted by Wal-Mart’s model for doing business as well as how they may be negatively impacted by that model. A: Wal-Mart Stores Inc. is the world largest company with $245 billion revenue income in 2002. There are about 138 million shoppers visiting its 4,750 stores every week. 82% of American households made at least one purchase at Wal-Mart in last year. “Everyday low prices” is the fundamental tenet of Wal-Mart. Over the years, it passed the large savings to shoppers by relentlessly wringing tens of billions of dollars in cost efficiencies out of the retail supply chain. But its business model has somewhat complications and perverse consequences as following: 1. In order to cut operating cost, Wal-Mart only pays its sales clerks $8.23 an hour, or $13,861 a year on average, which is below the federal poverty line for a family of three.
Approximate Word count = 800
Approximate Pages = 3.2
(250 words per page double spaced)
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