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
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Att
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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
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