Given the fact that Wal-Marts customers generally are unwilling to pay a premium for

environmentally friendly products, how is the company deriving business value from its
sustainability strategy, or, if not, how can it ensure that it does?
Answer:
Although Walmart is a cost leader, the customer behavior has not been strictly biased towards
lowest cost. For instance, when Walmart introduced organic (green) yoga pants and tees, the
products were sold in record time, indicating the customer preference for green products as
long as they were affordable. However, one could cynically view this as a lucky exception. This is
because, as inferred from the case, on many occasions, Walmarts customers were not informed
about the environmental aspects of the products. The reasons for the lack of marketing could be
attributed to the following reasons:
a. The company was not 100% sure about the environmental safety of the products and
went by the suppliers word; a product fiasco after publicizing high standards of the
products would prove costly for Walmarts business
b. Walmart did not want to cannibalize its existing non-green products for the green ones
So, is Walmart deriving any value from sustainability?
c.

One way to derive value from the sustainable business would be to educate the
customers about the environmental aspects while also keeping the price affordable.
Customers would be willing to buy more sustainable products that are also
simultaneously affordable. In order to implement that, Walmart has to introduce
sustainability standards for all its suppliers. This is already being taken care of by
consortiums like TCS that collect data on the best practices in the industry and help
implement the same at the supplier end. The suppliers are incentivized to maintain
standards in their self-reporting of sustainability in order to keep their relations with
Walmart (the biggest player in retail) in-tact

d.

2. Imagine that you are evaluating the progress of the electronics, seafood, and textiles
networks. Which networks have been most successful? What factors explain the successes (or lack of
successes) of these networks?

3. How is Wal-Mart motivating its suppliers to share information about and continuously reduce the
environmental impacts of products and processes? How can the company stimulate the development of
breakthrough innovations?
4. Propose one new game changer or innovation project not described in the case, for any of the
networks. To support your proposal, outline the environmental benefits, the profit opportunity for Wal-Mart,
the greatest challenges to implementation, and how Wal-Mart could overcome them. Please be prepared
to discuss your proposal in class.
5. Given its underlying business model and scale, can Walmart ever truly be sustainable? Why or Why
not?

Walmart may not be a 100% sustainable company. Given the scale of its business
and its extensive geographic presence, it may not be possible to maintain the
standards across all locations. For instance in a country like China, it may be harder
to implement green measures and ensure customer acceptance for slightly higher
priced products. The same reasoning could be true for several locations within the
USA too. Walmart has to cater to different customer needs- the ones who can afford
a lower cost product only and the ones that can afford a small premium.
From an operations standpoint, Walmart can