Wal-Mark’s sustainability Strategy

Group 13

Argoud FlorianDebasish DasLefresne AntoineSevestre Benjamin

-Founded in 1962 by Sam Walton in Rogers, Arkansas-Type : Discount store -Philosophy : Achieve highest level of efficiency , offer everyday low price-8500 stores in 15 countries, with 55 different names-84 % of the Americans had shopped at a Wal-Mart within the past year-2010: it was the world's largest public corporation by revenue

The Brand:-Very high purchasing power-Highly efficient supply chain-Very large scale of operation-Highest level of customer base-Unmatched pricing

Twentieth century problem:-Lack of resources in near future-Environmental impact due to large scale of operation-Increasing environmental and other policies

WAL-MART

NEED FOR SUSTAINABILITY OF BUSINESS

WHY SUSTAINABILITY? RELEVANCE TO WAL-MART

Creates a competitive advantage -Decreasing customer base-Depleting resources

The biggest business opportunity of the 21st century

-Increasing environmental policies- Increasing awareness among consumers

Reduce costs and generate savings -Maintaining daily low price philosophy-Increasing number of innovation

Increases the notoriety & the brand value

-Increasing consciousness among stakeholders- Large scale of operation at stake

Reduce the environmental footprint-Objection for green house gas emission-Increasing energy crisis

Wal-Mart's Environmental Legacy and Commitment Till Date

paid $1.15 million in fines to the state of Connecticut for the improper

storage of pesticides and other toxins

Paid $765,000 fine for violating petroleum storage tank laws at its auto

service centers in Florida

U.S. Environmental Protection Agency penalized the company $3

million in 2004 for violating the Clean Water Act in nine states

Wal-Mart Promises to Improve Health Care Coverage for Employees

The first major retailer to speak out in favor of environment in 1989

Unrivaled $20 million in cash donations, 1,500 truckloads of free

merchandise, food for 100,000 meals after hurricane

The Major Goals Ahead :– Wal-mart

1. To be supplied 100 percent by renewable energy (Global green

house gas strategy; Alternative fuels; Global Logistics; Energy, Design, construction and

maintenance)

2. To create zero waste (operational and Internal procurement; Packaging)

3. To sell products that sustain their resources and environment (Chemical intensive products; Sea foods; Electronics; Food & Agriculture; Forest and Paper;

China; Textiles )

1. Engage : Identify and work with a broader community that could provide information and other resources.2. Explore : Analyze the life cycle of particular products or services and investigate the related environmental issues3. Expand : Looking in the value chain to identify which business activities are matched to the issues

Strategy:– Wal-mart

Global Logistics

The Issue:-Fuel Consumption-Green house gases-Time-Cost

Evaluation:-Lower fuel consumption- 75 milliion dollar annual saving- competitive advantage

Actions Taken:-Involving RMI-Improvement in fleet-Efficient n/w identification by the logistic team

Strategic Options:-Fuel efficiency process-Efficient network-Efficient mode of transportation

CHINA

The Issue:-7th largest trading partner-More than 50000 suppliers-Compliance to environmental standards

Evaluation:-Remain unaffected by policy changes-Faced corruption problem- Lack of focus on environmental metrics

Actions Taken:-Provided valuable knowledge & Process assistance-Worked in parallel

Strategic Options:-Working in parallel-Search for alternative supplier-Benchmarking product standard

SEA FOOD: WAL-MART

ISSUESWAL-MART

THREAT ACTION TAKEN

Depleting sea fishes Continuity of supply Encouraging cluster

farming

The MSC program Rejection of non certified fish

Taking fish from certified supplier

Price Incurring loss Improve public awareness

Environmental responsibility

Tarnishing of brand image External collaboration

Fuel consumption & pollution

Lowering of brand image Marine reserves

SWOT Seafood

Strengths Weaknesses

- MSC certification- transparency in the seafood supply chain.- Working alongside with NGOs-Working with better supplier- Accordance to governmental present & futures regulations.

- Hard time to getting supply : high regulation“since 1950, as many as 90% of the ocean’s largest fish have disappeared”-Rigorous certification process

Opportunities Threats

- short and long term reputation- better quality products offered to the customers.

-Price : “ consumers are not willing to pay extra for sustainably caught fish”.- Hard to get 100% wild caught fish certified under the MSC.

ELECTRONICS: WAL-MART

ISSUESWAL-MART

THREAT ACTION TAKEN

Hazardous substance usage Denial of product Buying RoHS compliant

product

Recyclability Environmentalist Green engineering

Poor response of consumers Environmentalist E-waste pogramme

Energy Consumption Green house gasses Material innovation

Product cycle Obsolete of existing products Working with legislation

SWOT Electronics

Strengths Weaknesses

-Creation of environmental sub-teams to assist the buyers-Competitive advantage : be the 1st one in the US to sell ROHS compliance PCs

-Low inventory due to obsolescence-E-waste collection & cost.

Opportunities Threats

- short and long term reputation- better quality products offered to the customers.- Good selling of the products.- Development of ROHS standards to other products.(TV…)

-Legislation : Different environmental policies between States. “ need to do something at the national level”.-E-waste : “ we still haven’t figure out how to change people’s behavior”

Textiles: WAL-MART

ISSUESWAL-MART

THREAT ACTION TAKEN

Pollution of water & soil Environmentalist Using organic materials

The GOTS Rejection of non certified TEXTILES

-----------------------------------------

Price Incurring loss Encouraging organic materials

Environmental responsibility

Tarnishing of brand image Contracting with farmers

Buyers choice Over stocking Running merchandising program

SWOT Textiles

Strengths weaknesses-Reduce cost-largest purchaser of cotton : gave a 5 years verbal commitment.- new process, more efficient which minimizes waste-“the cost and labor requirements of certification absorbed by suppliers.- Long term relationship with supplier

- Cost of certification- Organic farmers can’t grow cotton in the same field for an extended period.

Opportunity Threats-Use inputs with minimal toxicity-Reduce environmental impacts- Sustainability metrics ant monitoring process are still under development.

-Redesign the buying role : can be inefficient at the beginning.-Need to invest in new technologies : innovation

High Medium Low

High Electronics Textile

Medium Seafood

Low CFL Bulbs

Environmental Attractiveness

Mark

et

Att

ract

iven

ess

The Environment-Strategy matrix

Conclusion :

Wal-Mart, the biggest retailer in the world decided anticipate the environmental issues that all the companies will have to face in a close future.

Wal-Mart is aware that the sustainable development represents the biggest business opportunity of the 21st century

Short term cost cutting VS Long term profit?

Are the customers willing to follow Wal-Mart ?

Is this new business model sustainable in the time?

What will Wal-Mart do if this model leads to loss of market share & customers?

Is a move back possible?

THANK YOU