Wal-Mart - Initiatives That Benefit Society free essay sample

Abstract Since Wal-Mart opened its doors in the early 1960’s profit as with any corporation has been a main focus. Achieving and succeeding in this however is easier said than done, development and success of a company relies on efficiency in current practices and improvements in those practices to insure the future of the company. A strong sustainability strategy which is closely followed will allow for such growth and success; bringing profits to the organization. Wal-Mart is said to be â€Å"a template for 21st Century capitalism† [1, pg 3] they hold a reputation for low prices; however this reputation is not reflective of their profits, as seen during the fiscal year of 2008 Wal-Mart earned $12. 73 billion dollars. [2] With such sizable profits corporations can afford to take risks for potential loss or reduced profits in hopes of encouraging improvements to the environment and society. Some products have been incorporated into Wal-Mart’s stocking that hold little potential for profit, but improved environmental and social contribution. Wal-Mart has set goals to become more socially and environmentally responsible for the impact their products hold. [3] Topic Question †¢As evidenced by Exhibit 12, Wal-Marts sustainability strategy has generally been very profitable. However, two initiatives described in the case benefit society and the environment, but apparently decrease Wal-Mart’s profits. Identify those two initiatives and imagine that you are their internal champion. †¢How would you justify pursuing those initiatives? Intro As a team we identified two initiatives in which Wal-Mart provided a product that had the potential for social and environmental improvement, however did not meet typical profit expectations. Alaskan Salmon fillets which were caught in the Wild by commercial fisheries hold a social improvement for the consumer while the corporation saw little profit and in some cases minor losses. The other initiative which we identified was the environmental improvement associated with the E-Waste â€Å"Box Program† where boxes including ostage were provided to encourage the recycling of electronics at 35 to 50 percent of the cost of the material. [4] SWOT Strengths – Wild caught salmon has a decreased level of hormones and toxins then farm raised, this makes the fish provided at a loss by Wal-Mart a healthier alternative for the consumer. The quality and taste of the fish is also improved with wild caught salmon. Eutrophication has the potential to decrease with less farming improving quality of the ecosystem. Weakness – By selling these products below cost, profits will be lost. It is hard to promote the benefits of programs if consumer is not interested, in the case of the recycling program as consumers were unwilling to pay to participate. [4] Opportunities Change consumer’s view of Wal-Mart’s concern for the environment, by reducing its environmental impact by providing a low cost recycling program. By making organic and environmentally friendly products affordable for everyone such as the Salmon in this case, and set the standard for environmental responsibility by discouraging fish farming and throwing away electronics. Threats – While the wild Alaskan caught salmon has greater health benefits it still cost more than frozen farm raised; consumers don’t want to pay the extra, even if Wal-Mart is taking a profit loss. This threat could leave products on the shelf to spoil, and Wal-Mart was already taking a loss by just providing the fish to consumers. Recommendations We recommend that Wal-Mart continue in its efforts to keep involved in providing products and services which are socially and environmentally progressive. Being that they are such a large corporation an example can be set to others in the industry to recognize the importance of these programs. While loss on a product in retail is not ideal, the overall profits of the company are high and affected very little through a few programs with potential for important social and environmental impact. Justification Farm raised salmon was found to contain 10 times more toxins than wild salmon; by providing fresh wild Alaskan Salmon at a reduced price consumer have a healthier alternative at a moderate price. The same article also stated that farm raised salmon poses risks of cancer, so the decision to provide wild salmon reduces the risk of cancer of the consumer. [5] Salmon that is caught in the wild is a much more nutritious alternative to farm raised, wild fish contain 20% more protein, and 20% less fat , wild fish also contain a healthier ration of omega 3 to omega 6 fatty acids; all of these factors play a role in the taste of the fish, which overall is said to be better then farm raised salmon. 6] The amount of fish farms has the potential to decrease with a distributor the size of Wal-Mart turning to wild caught fish; this is a strength as the effects to ecosystems will be reduced. Fish farming is thought to be a contributing factor to eutrophication due to the excess organic matter behind in the form of feces, this leads to poor water quality affecting the oxygen content of the water. This subjects the area to increases in algae, and would affect the aquatic life in nearby waters further deteriorating the ecosystem. 7] Cost/Benefit analysis Costs – The supplier is often stuck with extra costs associated with products like Wild caught salmon, from the increase in pay out to their suppliers, potential for product going bad on the shelves as prices are higher than frozen farm raised products. Benefits – Providing healthier alternatives will attract another market of consumers increasing their sales. By providing services and products which are more environmentally and socially responsible, the stock prices have the potential to increase. Economists suggest that stock could be worth over 8% more if they could develop a better reputation in regards to the image associated with their environmental responsibility plan. [4, pg 3] Works Cited [1] Erica Plambeck, L. D. (2007, April 17). Wal-Mart’s Sustainability Strategy. Case: OIT-71 REV. 09/30/08 . Stanford Graduate School of Business. [2] http://www. msnbc. msn. com/id/23232814 [3] http://www. nytimes. com/2009/07/16/business/energy-environment/16walmart. html [4] Erica Plambeck, L. D. (2007, April 17). Wal-Mart’s Sustainability Strategy. Case: OIT-71 REV. 09/30/08 . Stanford Graduate School of Business. [5]Science 9 January 2004: Vol. 303. no. 5655, pp. 226 229 DOI: 10. 1126/science. 1091447 Reports Global Assessment of Organic Contaminants in Farmed Salmon Ronald A. Hites,1* Jeffery A. Foran,2 David O. Carpenter,3 M. Coreen Hamilton,4 Barbara A. Knuth,5 Steven J. Schwager6 [6] http://www. paystolivegreen. com/2009/02/wild-salmon-vs-farmed-raised-which-is-better/ [7] http://ec. europa. eu/environment/integration/research/newsalert/pdf/184na5. pdf