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"The Demise Of Wal Mart" Explains How Anthony Bianco In The Bully Of Bentonville Argues That Wal Mart's Business Model Will Fail In The Long Run.

1231 words - 5 pages

In this essay I will show how Anthony Bianco argues in the Bully of Bentonville that Wal-Mart's long-term business model is not sustainable because of the treatment of their workforce. I will also show that other factors that are attributing to their demise. Aside from the massive opposition they face when trying to enter into a new area, Wal-Mart's stock performance prior to the recession had been spiraling downward since 2000. Since the recession many people really have no choice but to shop at Wal-Mart. The reasons for this poor stock performance were that people chose not to shop their because of how infamous Wal-Mart is with treating its employees, people's inability to afford to drive their because of such high gas prices, and because in the process of cutting costs on such a massive offensive, they were feeling the effects of not having a large enough workforce or a dedicated enough workforce. Because some of the stores are so unorganized, people who were in the position to avoid shopping at Wal-Mart did so. Wall Street also felt that their rapid expansion was making it too difficult to stay on top of costs and increase same store sales. Wal-Mart's final problem will be to find a business model that works in countries such as Germany, where they can not get away with the unfair labor practices is does in the US. Like most other powerhouse US companies such as Microsoft, I feel that Wal-Mart will eventually decrease in size but still remain a competitor in retail, just not dominate it.One of Wal-Mart's ongoing problems is the opposition it faces when trying to open a store a new area. A recent example of this was in Rego Park, a town in New York City. In 2004 when Wal-Mart expressed interest in opening a store in the highly retail developed town, "the reaction was swift, visceral, and negative."1 The opposition was not because of concerns about traffic or noise, but because of its ethics. One New Yorker, Lupita Gonzalez was quoted in saying, "Wal-Mart discriminates against women and destroys jobs, and it would take away from business from local businesses."2 The developer, Vornado Trust, dropped the plan less then three months after Wal-Mart's plan had been released. As Wal-Mart tries to enter more affluent areas, it will continue to see opposition from their educated citizens.Wal-Mart's next challenge is how they will continue to cut costs but at the same time maintain well run stores. Studies by Wal-Mart show that customers regardless of income are unhappy with their performance in providing the basic services of a retailer. These services include poor customer service, long lines, and messy shelves and store appearance. Since Wal-Mart tries to have the minimum amount of people do the maximum amount of work, the quality suffers. According to Wal-Mart executives, 25% of the stores were rated poorly by customer satisfaction surveys.3Since they are now trying to appeal to the more affluent by increasing the quality of their merchandise,...

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