“The virtues and vices of the founder can shape the culture of the organisation”. Sam Walton knew the value of dollar and Wal-Mart knows the value of a dollar; they can squeeze a supplier but families flock to their stores for value, better value for their money than anywhere else.
The Walton family [the richest in America] still live in Bentonville, Arkansas a town of only 25 000. The first WM store is now a company museum formalising the stories that bind the organisation together. Eldest son Rob is now chairman – making the company a generation 2. They still own 39% of the firm named after their father. Grandchildren traditionally squander the inheritance-purposefully; or through ineptitude or neglect.
WM symbolises corporate power; its buying power is the strongest in the world. “If WM move into your country, or county, or town, do not compete on price. Find something else to compete on, or find a buyer for your business.”
However activists are alarmed by the effect this giant has on local stores even though consumers might like the convenience and great prices. There is however the effect on the broader social fabric. Stores within a 20 mile radius are adversely affected. And if WM decides that business is not so good they may move out leaving communities worse off. There is a perception that WM does not make for a good corporate citizen. Human rights activists say WM’s clothes are often produced in 3rd world countries under “sweatshop” conditions; environmentalists worry about edge-of-town shopping sprawl.
Home Truths.
-
Employees. In 2004 WM employed 1.2 m in the US and 1.5 worldwide. They have a strong record on employing people with disabilities and a very diverse workforce ethnically. But there are fewer women in managerial positions compared to other American retailers. They are accused of suppressing real wages.
-
With 3 400 locations they are rated as one of the most philanthropic companies in US.
-
Suppliers. Talk of partnership with suppliers can be a one-sided relationship. Many feel there is no real option to taking a WM contract. They have pushed for a “Made in America” programme.
-
Non-market strategy. Stakeholder relations are taken seriously with implications for consumers, employees, local communities, investors and suppliers being considered.
If WM was a country it would rank as the 30th largest economy just behind Saudi Arabia [2004] with a 11% growth rate. It had successes in Canada, Mexico and UK but more difficulty in Brazil, continental Europe, and China and Japan due largely to cultural differences. Internationalisation involves the imposition of core WM values and practices with perhaps some localisation/customisation. They had union unrest in Brazil; faced restrictive opening hours in Germany; faced control in China.
Wal-Mart’s Family Firm: Critics Critique, but big business rules: Vol22. No.2 2006 Strategic Direction W almart's local supplier programme pays off for Oceanfresh
26 Mar 2013
Walmart is having an impact on local suppliers by providing access to international markets, as seen with the recent success of Lonrho's Oceanfresh Seafoods, a local purveyor of fresh and frozen seafood, being listed in Sam's Club stores in the US. Gavin van der Burgh, Oceanfresh CEO says, "The company is delighted to have started supplying Sam's Club in the US with natural, wild caught, sustainably sourced Cape Hake fish fillets - a top quality, deep water, white fish. Lonrho owns an expanding portfolio of businesses in the seafood and fresh produce sectors that operate to the highest international standards and is increasingly supplying fresh and frozen produce from Africa to the world's foremost retailers." The product will be exported out of both South Africa and Namibia.
"Our members are very focused on high quality, sustainably sourced seafood of which the Cape Hake fillets have been a positive addition to the assortment," says Kendall Sallee, Sam's Club senior seafood buyer. "We've just launched the Ocean Fresh Cape Hake in 80 of our locations in the US and I anticipate increased sales and distribution as members become accustomed to the item and learn about the quality and versatility of the fish."
"The listing is just one example of how we've been able to connect local suppliers to a global market," reiterates Ramesh Subbiah, global sourcing executive, Massmart. "The opportunities are there and with Walmart's knowhow there are even more ways for us to help and develop some of our suppliers."
One of the ways the group measures its success is by the number of Massmart facilitated African supplier listings in other Walmart markets. "We've built a good partnership with Oceanfresh which will benefit both companies and our members," concludes Sallee.
Wal-Mart and the Game in Botswana [July 2012] *PROFESSOR ROMAN GRYNBERG
Last week the South African Competition Tribunal authorised the acquisition by Wal-Mart of the 51 percent share in the South African retailer Massmart at a price of some P16.1 billion.
This gives the global wholesale and retail giant a foothold in Africa from which it will almost certainly expand. As throughout much of Southern Africa Massmart is better known as Game and therefore by extension a decision made in Pretoria, will mean that Wal-Mart has arrived in Botswana. It has two stores in the country, in Francistown and Gaborone and operations in a dozen or so African countries.
Massmart was already planning expansions of its network prior to the merger into countries like Nigeria, DRC and Angola. With a global giant like Wal-Mart now in the driver's seat the market expansion into Africa will only be held back by the pace of growth and incomes of the continent. In many ways the merger is, from a purely product and sales range, a near perfect fit as the range of products in Game shops are similar to the range that one finds in many Wal-Mart stores around the world.
It was by no means obvious for a very long time that the Wal-Mart/Massmart deal was going to proceed because it was feared by Wal-Mart that the South African Competition Authority would impose targets on using local suppliers. This was seen as a deal breaker by Wal-mart.
Instead what has happened was that Wal-Mart has agreed to establish in South Africa a R100 million fund to help develop local suppliers as well as some commitment to recognise the unions. The conditions imposed on Wal-Mart have been described by business analysts as 'meek and mild'. In all fairness to the Competition Authority in South Africa, which has a fearsome reputation for protecting South African consumers from unfair trade practices, it could not have imposed a local supply obligation on Wal-Mart and not on other wholesalers and retailers in the industry. Will the acquisition by Wal-Mart of Massmart be good for Botswana? The fear in South Africa, justified or not, was that because of Wal-Mart's size - it is said to be China's biggest buyer , and with its value chains local producers would simply be cut out of the market and that other retailers would, similarly be driven out of business.
The fear is that over time Wal-Mart will also drive out competitors who were reliant on these often more expensive local suppliers who will in turn go out of business. In Botswana we have few local suppliers of consumer goods except a narrow range of food products and therefore the fear of the impact of Wal-Mart on the country is not what you find in South Africa. Competitors on the other hand will have a much tougher life as a result of Wal-Mart but that will be good for the Botswana consumer, at least in the short to medium term.
But what is particularly interesting is the agreement to set up a R100 million fund to help develop suppliers in South Africa. If these suppliers will be successful then they will sell to Wal-Mart which will then export it to Game in Botswana and other countries and so South African producers will continue to maintain their control in the African market. This is all good for South Africa producers but what about us? The presumption is that Botswana and the other African countries would simply not notice what Wal-Mart had agreed to and it would just be business as usual. South African owned and based firms will continue to export across the border and as for the Botswana supplier, well, what Botswana suppliers?
In South Africa Wal-Mart has now created a precedent which has been noticed in other African countries and perhaps it is time that all the South African based retail operators recognise that they are operating in a different African reality, where all the countries in which they sell want to see domestic production and exports. Maybe it is time for Botswana to give consideration to asking that all the South African retailers and wholesalers copy Wal-Mart's 'generosity' and establish funds to help develop local entrepreneurs to supply their value chains. It is extremely difficult for small Botswana producers of any product to ever penetrate the retail supermarkets here in the country. Not only does the local producer have to demonstrate that they can produce a product consistently without supply disruption at a competitive price they also have to overcome the fact most supermarkets practice what is called 'single point of supply sourcing' and they simply don't want to buy from many sources.
Supermarkets order most of the products that you find on the shelf from one point and that is what makes them so profitable and their prices relatively low. It is also what destroyed the old small shops. They do not have to buy from scores of buyers which increases their overheads enormously. They also are able to buy in bulk. Kraft, for example, makes chewing gum in Botswana from raw materials that are imported from South Africa and beyond.
The final product is then returned to Guateng where it is distributed from one point to its entire marketing network throughout southern Africa with some of the product coming back to Botswana. It is an enormous challenge to get a small local producer in Botswana to import raw materials and intermediate goods, produce the product then export back it back to South Africa for distribution and then return it, at least in part to Botswana, and still make a profit. That is why it so rarely happens and only tends to happen with high value to weight items like chewing gum. The big South African-based retailers are probably very well placed to help local business, if they choose, but a little prodding, assistance and direction from government might make some of them a little more like Wal-Mart in their generosity towards the development of local business in Botswana.
*These are the views of Professor Roman Grynberg and not necessarily of the Botswana Institute for Development Policy Analysis where he is employed.
Dostları ilə paylaş: | 
al-Mart’s