A SNAPSHOT

Type : Discount department store/Public (NYSE: WMT)

Founded: Rogers, Arkansas, USA (1962)

Headquarters: Bentonville, Arkansas, USA

Key people: Sam Walton (1918–1992), Founder

H. Lee Scott, CEO
S. Robson Walton, Chairman
Tom Schowe, CFO

Industry : Retail Products Discount stores, grocery stores, and

hypermarkets Optical, Pharmacy, Portrait Studio

Revenue : US$351.1 billion (2007)

Net income : US$11.3 billion (2007)

Employees : 9 million (2007)

Slogan : Save Money, Live Better.

Always Low Prices. Always.

Save More. Smile More. (U.S.)

WE SELL FOR LESS every day! (Canada)

EVERYDAY LOW PRICES

Website : www.walmart.com

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WALMART - INTRODUCTION
WALMART is an American public corporation, currently one of the
world's largest corporations (by revenues) according to the 2007
Fortune 500. It was founded by Sam Walton in 1962, incorporated on
October 31, 1969, and listed on the New York Stock Exchange in 1972.
It is the largest private employer in the world and world's fourth largest
utility or commercial employer, only trailing the People's Liberation Army
of China, the National Health Service of the United Kingdom and the
Indian Railways. Wal-Mart is the largest grocery retailer in the United
States, with an estimated 20% of the retail grocery and consumables
business, and the largest toy seller in the U.S., with an estimated 45% of
the retail toy business, having surpassed Toys "R" Us in the late 1990s.

Wal-Mart operates in Mexico as Walmex, in the United Kingdom as

ASDA, and in Japan as The Seiyu Co., Ltd. Wholly owned operations
are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-
Mart's investments outside North America have produced mixed results.
In 2006, Wal-Mart sold its retail operations in South Korea and Germany
due to sustained losses and a highly competitive market.

Wal-Mart has been the target of criticism from some community groups,
women's rights groups, grassroots organizations, and labor unions.
Specific criticisms include the company's extensive foreign product
sourcing, low rates of employee health insurance, resistance to union
representation, and alleged sexism, among other things.

Wal-Mart is more than just the world's largest retailer. It is an economic

force, a cultural phenomenon and a lightning rod for controversy. It all
started with a simple philosophy from founder Sam Walton: Offer
shoppers lower prices than they get anywhere else. That basic strategy
has shaped Wal-Mart's culture and driven the company's growth.

Now that Wal-Mart is so huge, it has unprecedented power to shape

labor markets globally and change the way entire industries operate.

Sam Walton opened his first five-and-dime in 1950. His vision was to
keep prices as low as possible. Even if his margins weren't as fat as
WAL-MART 2
competitors, he figured he could make up for that in volume. He was
right.

In the early 1960s, Walton opened his first Wal-Mart in Rogers,

Arkansas. The company continued to grow, going public in 1970 and
adding more stores every year. In 1990, Wal-Mart surpassed key rival
Kmart in size. Two years later, it surpassed Sears.

Walton continued to drive an old pickup truck and share budget-hotel

rooms with colleagues on business trips, even after Wal-Mart made him
very rich. He demanded that his employees also keep expenses to a
bare minimum -- a mentality that is still at the heart of Wal-Mart culture
more than a decade after Walton's death. The company has continued
to grow rapidly after his death in 1992 and now operates four retail
divisions -- Wal-Mart Supercenters, Wal-Mart discount stores,
Neighborhood Market stores and Sam's Club warehouses.

Wal-Mart Supercenter

The facts below about Wal-Mart give an idea of how big Wal-Mart is :

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Wal-Mart employs 1.6 million people. To give an idea of just how many
people that is, Idaho, the 39th most populous state, is home to 1.4
million people.

Wal-Mart had sales of $312.43 billion in its most recent fiscal year,
which ended January 31, 2006. By comparison, the second-largest
retailer in the country, Home Depot, posted sales of $81.5 billion.

Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has 2,040.

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What made Wal-Mart so big,
powerful and successful?
The key reasons that Wal-Mart has been able to keep its prices low are

1. Its sophisticated and cutting-edge technology

2. A frugal corporate culture of watching each expense and

3. A push to make suppliers sell merchandise at cheaper and

cheaper prices.

1. TECHNOLOGY : Wal-Mart pushed the retail industry to establish the

universal bar code, which forced manufacturers to adopt common
labeling. The bar allowed retailers to generate all kinds of information --
creating a subtle shift of power from manufacturers to retailers. Wal-Mart
became especially good at exploiting the information behind the bar
code and is considered a pioneer in developing sophisticated technology
to track its inventory and cut the fat out of its supply chain.

A universal bar code

Wal-Mart became the first major retailer to demand manufacturers use

radio frequency identification technology (RFID). The technology uses
radio frequencies to transmit data stored on small tags attached to
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pallets or individual products. RFID tags hold significantly more data
than bar codes. During the first eight months of 2005, Wal-Mart
experienced a 16 percent drop in out-of-stock merchandise at its RFID-
equipped stores, according to a University of Arkansas study (as
reported in Fortune Small Business magazine).

2. THE FRUGAL CULTURE established by Walton, also plays into Wal-

Mart's success. The company has been criticized for the relatively
meager wages and health care plans that it offers to rank-and-file
employees. It has also been accused of demanding that hourly workers
put in overtime without pay. Store managers often work more than 70
hours per week. They are expected to pinch pennies wherever they can,
even on things like the heating and cooling of the stores. In the winter,
stores are kept at 70 degrees Fahrenheit, and in the summer, they stay
at 73.
This culture is also present at the company's headquarters. Wal-Mart is
headquartered in Bentonville, Arkansas, instead of an expensive city like
New York. The building is drab and dull. One can’t catch executives in
limousines and cant even see them dragging into work at 9:30 a.m.
Executives fly coach and often share hotel rooms with colleagues. They
work long hours, typically arriving at work before 6:30 a.m. and working
half-days on Saturdays.

3. THE CENTRAL GOAL OF WALMART HAS BEEN TO KEEP

PRICES LOW: The company has been very successful at this. Experts
estimate that Wal-Mart saves shoppers at least 15 percent on a typical
cart of groceries. Everything -- including the technology and corporate
culture -- feeds into that ultimate goal of delivering the lowest prices
possible. Wal-Mart also pushes its suppliers, some say relentlessly, to
cut prices.

In a 2003 Los Angeles Times article (part of a Pulitzer Prize-winning

series about Wal-Mart), tells of a Wal-Mart buyer named Celia Clancy,
who was in charge of clothing and demanded that each supplier either
lower the price or increase the quality every year on every
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item. This philosophy is known as "plus one."

WALMART - PUBLICS
 CUSTOMERS
 INVESTORS
 COMPETITORS
 GOVERNMENT
 EMPLOYEES AND LABOR UNIONS
 SUPPLIERS AND DEALERS
 LOCAL RETAILERS AND SMALL COMPANIES IN THE
AREA COMPRISING OF THE LOCAL COMMUNITY
 RELIGIOUS ORGANIZATIONS
 ENVIRONMENTAL GROUPS

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 CORPORATE AFFAIRS
Wal-Mart's business model is based on selling a wide variety of general
merchandise and marketing, at "always low prices." The company refers
to its employees as "associates." All Wal-Mart stores in the US and
Canada also have designated "greeters", whose general role is to
welcome shoppers at the store entrance, and play a role in loss
prevention.

Unlike many other retailers, Wal-Mart does not charge a slotting fee to
suppliers for their products to appear in the store. Alternatively, they
focus on selling more popular products and often pressure store
managers to drop unpopular products in favor of more popular ones, as
well as manufacturers to supply more popular products. More than 70%
of the goods sold in Wal-Mart are manufactured in China.

On September 14, 2006, the company announced that it would be

phasing out its layaway program, citing declining use and increased
costs. Layaway was offered until November 19, 2006, with merchandise
pickup by December 8, 2006. They plan to focus on alternative payment
options, such as increased use of 6 and 12 month zero interest
financing. The layaway location in most stores is now used for Wal-
Mart's Site-To-Store feature.

Financial
In 2006, Wal-Mart ranked at number 67 of the 100 largest corporations
in terms of profitability (profits divided by total revenue), behind retailers
Home Depot, Dell and Target, and ahead of Costco and Kroger. For the
fiscal year ending January 31, 2006, Wal-Mart reported net income of
$12.178 billion on $344.992 billion of sales revenue (3.5% profit margin).
For the fiscal year ending January 31, 2006, Wal-Mart's international
operations accounted for approximately 20.1% of total sales. As of
September 6, 2007, net sales for the 30-week period ending August 31,
2007 was $207.487 billion, up 8.5% from the previous year's results.

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 Governance
Wal-Mart is governed by a thirteen-member Board of Directors, which is
elected annually by shareholders. S. Robson Walton, the eldest son of
founder Sam Walton, served as the Chairman of the Board, and H. Lee
Scott, the Chief Executive Officer, served on the board as well. Other
members of the board include Aída Álvarez, James Breyer, M. Michele
Burns, James I. Cash, Jr., Douglas N. Daft, David D. Glass, Roland A.
Hernandez, Jack C. Shewmaker, Jim C. Walton, Christopher J.
Williams, and Linda S. Wolf.

Notable former members of the board include Hillary Clinton (1985-

1992) and Tom Coughlin (2003-2004), who also served as Vice
Chairman. Clinton left the board prior to the 1992 U.S. Presidential
Election, and Coughlin left the board in December, 2005 after pleading
guilty to wire fraud and tax evasion for stealing hundreds of thousands of
dollars from Wal-Mart.

Competition
In North America, Wal-Mart's primary competition includes department
stores like Kmart, Target, ShopKo, Meijer, or Canada's Zellers, Winners,
or Giant Tiger. Wal-Mart's move into the grocery business in the late
1990s has also positioned it against major supermarket chains in both
the United States and Canada. Several smaller retailers, primarily dollar
stores, such as Family Dollar and Dollar General, have been able to find
a small niche market and compete successfully against Wal-Mart for
home consumer sales. In 2004, Wal-Mart responded by testing their
own dollar store concept, a subsection of some stores known as
"Pennies-n-Cents."

Wal-Mart has faced competition in foreign markets. For example, in

Germany, it had captured just 2% of German food sales following its
entry into the market in 1997 and had remained "a secondary player"
compared to competitor Aldi which boasts 19% share of the German
market. In July 2006, Wal-Mart announced its withdrawal from Germany.
Its stores are to be sold to German company METRO AG. In May 2006,
Wal-Mart withdrew from the South Korean market when it agreed to sell
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all 16 of its South Korean outlets to Shinsegae, a local retailer, for $882
million who are as of late 2006 re-branding the country's Wal-Marts as
E-mart. Wal-Mart had originally entered the South Korea market in 1998.
In the UK, Wal-Mart's ASDA subsidiary is the second largest chain after
Tesco. Specifically, ASDA is a distant second to Tesco in the UK
grocery market, and as of 2006 the gap is widening, based on market
share figures published by TNS Worldpanel.

Customer base
Each week, approximately 100 million customers, or one-third of the US
population, visits Wal-Mart's US stores. Wal-Mart customers place low
prices as the most important reason for shopping at Wal-Mart, reflecting
the "Low prices, always" message that Wal-Mart had from 1962 until
2006. Wal-Mart's average US customer's income is below the national
average, and analysts have recently estimated that more than one-fifth
do not have a bank account, twice the national rate. A Wal-Mart financial
report in 2006 also indicated that Wal-Mart customers are sensitive to
higher utility costs and gas prices. A poll prior to the 2004 US
Presidential Election indicated that 76% of voters who shopped at Wal-
Mart once per week planned to vote for George W. Bush, while only
23% planned to vote for John Kerry. When measured against other
similar retailers in the US, frequent Wal-Mart shoppers were rated the
most politically conservative.

In 2006, Wal-Mart made steps to expand its US customer base,

announcing a modification in its US stores from a, "one-size-fits-
all," merchandising strategy to a custom-fitting merchandise assortment
designed to, "reflect each of six demographic groups – African-
Americans, the affluent, empty-nesters, Hispanics, suburbanites and
rural residents.” About six months later, the company went public with a
variation on their customer profile: "Saving people money so they can
live better lives.” This reflects what Wal-Mart identifies as the three main
groups that its 200 million customers are organized into: "brand
aspirationals" (people with low incomes who are obsessed with names
like KitchenAid), "price-sensitive affluents" (wealthier shoppers who
love deals), and "value-price shoppers" (who like low prices and
cannot afford much more). 's recommendations and carrying the DVD
Brokeback Mountain, a love story about two gay cowboys in Wyoming.
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 Employee and labor relations
Labor unions, religious organizations and environmental groups have
criticised Wal-Mart with regard to its policies and/or business practices.
In particular, several labor unions blame Wal-Mart workers'
unwillingness to join their union on the company's anti-union stance.
Others disapprove of corporation's extensive foreign product sourcing,
treatment of employees and product suppliers, environmental practices,
the use of public subsidies, and the impact of stores on the local
economies of towns in which they operate.

Critics also decry Wal-Mart's employee and workforce relations, low

wages, poor working conditions, inadequate health care. They also
denounce what they call the company's anti-union policies. Critics claim
that Wal-Mart's high turnover rate – approximately 70% of its employees
leave within the first year, indicates that the workers are dissatisfied with
the lack of recognition and inadequate pay.

A jury in Massachusetts Superior Court awarded nearly 2 million dollars

to a woman who worked at Wal-Mart as a pharmacist for 9 years. She
demanded she be paid a wage differential and bonuses for managers
and that she was reprimanded for reporting missing drugs to the U.S.
Drug Enforcement Administration. The jury rejected Wal-Mart's claim
that she had left the pharmacy unsecured and was fired for numerous
violations of company policy.

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 THE CONTROVERSIES

Criticism of Wal-Mart
Wal-Mart has been subject to criticism by various groups and
individuals. Many attacks may be motivated by legitimate concern, lack
of knowledge of economic principles, psycho-social phenomena, or
monetary interest. Labor unions fund and lead community groups,
grassroots organizations, religious organizations, and environmental
groups in protests against Wal-Mart, the company's policies and
business practices, and Wal-Mart customers. Other areas of criticism
include the corporation's foreign product sourcing, treatment of product
suppliers, environmental practices, the use of public subsidies, and the
company's security policies. Critics have observed that customers tend
to prefer Wal-Mart over other retailers, and charge that Wal-Mart must
be doing something unethical in order to offer lower prices. Wal-Mart
denies doing anything wrong and maintains that low prices are the result
of efficiency.

In 2005, labor unions created new organizations and websites to

influence public opinion against Wal-Mart, including Wake Up Wal-Mart
(United Food and Commercial Workers) and Wal-Mart Watch (Service
Employees International Union). By the end of 2005, Wal-Mart had
launched Working Families for Wal-Mart to counter criticisms made by
these groups. Additional efforts to counter criticism include launching a
public relations campaign in 2005 through their public relations website,
which included several television commercials. Some Wikipedia edits
appear to originate from Wal-Mart computers, leading some to believe
Wal-Mart is "spinning" their image on Wikipedia. The company retained
the public relations firm Edelman to interact with the press and respond
to negative or biased media reports, and has started interacting directly
with bloggers by sending them news, suggesting topics for postings, and
sometimes inviting them to visit their corporate

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CONTROVERSY AFFECTING –
Local communities

Store openings

Wal-Mart opened its Teotihuacán Superstore near the Pyramid of the

Moon (shown) amid community protests.

THE ISSUE :

• GENERATORS OF PUBLIC OPINION : When Wal-Mart plans

new store locations, activists sometimes oppose the new store
and attempt to block its construction.
• CONCERNS : Opponents to the new Wal-Mart cite concerns
such as traffic congestion, environment problems, public
safety, absentee landlordism, bad public relations, low
wages and benefits, and predatory pricing.
• ACTIONS BY THE PUBLICS : Opposition sometimes includes
protest marches by competitors, activists, labor unions, and
religious groups. In some instances, activists demonstrated
opposition by causing property damage to store buildings or
by creating bomb scares. Some city councils have denied
permits to developers if they plan to include a Wal-Mart in their
project.

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 • SOME POSITIVES : Those who defend Wal-Mart cite
consumer choice, the overall benefits to the economy, and
object to bringing the issue into the political arena.

THE RESULT AND ACTION BY WALMART :

 A Wal-Mart Superstore opened in 2004 in Mexico, 1.9 miles

away from the historic Teotihuacán archaeological site and
Pyramid of the Moon. Although Wal-Mart's proposal received
protest and media attention, the location was supported by
Mexico's National Anthropology Institute, the United Nations and
the Paris based International Council on Monuments and Sites.
Local merchants, helped by environmental groups and anti-
globalization groups opposed the construction, and poet Homero
Aridjis joined the protest characterizing the opening as
"supremely symbolic" and "...like planting the staff of
globalization in the heart of ancient Mexico."

2. Economic Problems

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This Bizarro comic is an example of the criticism that Wal-Mart forces
other stores out of business.

THE ISSUE : Wal-Mart is one of the largest corporations in the world.

Critics worry about the presence of Wal-Mart in their local communities.
The criticism is that WALMART forces other stores out of business.
Studies have found both positive and negative effects on local
businesses, jobs and taxpayers.

• Some facts : Kenneth Stone, Professor of Economics at Iowa

State University, in a paper published in Farm Foundation in 1997,
found that some small towns can lose almost half of their retail
trade within ten years of a Wal-Mart store opening. However, he
compared the changes to previous competitors small town shops
have faced in the past—from the development of the railroads and
the Sears Roebuck catalog to shopping malls. He concludes that
shop owners who adapt to the ever changing retail market can
thrive after Wal-Mart comes to their community.
• SOME POSITIVES : A June 2006 article published by the
libertarian Ludwig von Mises Institute suggested that Wal-Mart has
a positive impact on small business. It argued that while Wal-
Mart's low prices caused some existing businesses to close, the
chain also created new opportunities for other small business, and
so "the process of creative destruction unleashed by Wal-Mart has
no statistically significant impact on the overall size of the small
business sector in the United States."

ACTION TAKEN BY WALMART :

 For the concern of jobs, a study by Global Insight, and
commissioned by Wal-Mart, found that its stores' presence saves
working families more than US$2,500 per year, while creating
more than 210,000 jobs in the U.S.
 Another study at the University of Missouri found that a new store
increases net retail employment in the county by 100 jobs in the
short term, half of which disappear over five years as other retail
establishments close.
 Studies of Wal-Mart show consumers benefit from lower costs. A
2005 Washington Post story reported that "Wal-Mart's discounting

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 on food alone boosts the welfare of American shoppers by at least
$50 billion per year."

CONTROVERSY AFFECTING-
Suppliers
With over 80,000 different suppliers, Wal-Mart has faced a torrent of
criticism and issues with regards to its suppliers.

These issues involve:

 Massive Reliance on Imports
 Hurting American Manufacturers
 Rock-Bottom Wages and Sweatshop Labor

1. Massive Reliance on
Imports
In February 1985, Walton wrote 3,000 American manufacturers and
wholesalers to announce that the chain wanted to buy more American
goods. Walton said:
"We cannot continue to be a solvent nation as long as we pursue
this current accelerating direction. Our company is firmly
committed to the philosophy by buying everything possible from
suppliers who manufacture their products in the United States."

Today, however, over 80 percent of Wal-Mart's 60,000 global suppliers

are based in China.

 China's Eighth Largest Trading Partner - In 2004, almost 10

percent of everything imported to the United States from China
was imported by Wal-Mart -- making the company, if it counted as
a sovereign nation, China's eighth-largest trading partner.

 Increasing Dependence on India - In March 2004, Business Line

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 reported that Wal-Mart intends to outsource $11 billion in textile
merchandise over the next few years. The company has planned
to buy $1.5 billion dollars worth of goods from India in 2006, and
has increased operations out of its Bangalore office -- which
already employs 80 staffers focused on new outsourcing
relationships.

2. Hurting American
Manufacturers

Wal-Mart works to keep the green flowing -- even if that means red ink
for American suppliers:

• Ruining Rubbermaid. In 1994, Rubbermaid won accolades as

the most admired company in the United States -- but five years
later, its fortunes fell so hard that the company sold itself to a
competitor. When the price of a key component of its products
went up, Rubbermaid asked Wal-Mart for a modest price increase
-- but Wal-Mart said no, and stopped sales of Rubbermaid
products. At a Rubbermaid factory in Wooster, Ohio, that meant
the loss of 1,000 jobs.
• Advises Supplier: 'Open a Factory in China.' To land a supply
contract with Wal-Mart, the Lakewood Engineering and
Manufacturing Company -- a Chicago fan manufacturer -- had to
locate manufacturing operations in Shenzhen, China. Workers
there make $.25 an hour -- while the company's Chicago
workforce earned an average hourly $13.
• Advises Mr. Coffee to Move Overseas. Mr. Coffee -- which won
awards for moving manufacturing operations back to the United
States -- faced pressure to shift production to China even at the
height of Wal-Mart's 'Buy American' program. After Wal-Mart
demanded a $1 reduction in the wholesale price of a brisk-selling
four-cup coffeemaker in 1985, Mr. Coffee executives scouted for
factory sites in China -- and executives say Wal-Mart encouraged
offshore production even as it promoted its 'Made in the USA'
campaign."

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 CONTROVERSY AFFECTING -
Employee and labor relations
With close to two million employees worldwide, Wal-Mart has faced a
torrent of lawsuits and issues with regards to its workforce.

These issues involve

 Low wages,
 Poor working conditions,
 Inadequate health care,
 The company's strong anti-union policies.

Critics point to Wal-Mart's high turnover rate as evidence of an unhappy

workforce, although other factors may be involved. Approximately 70%
of its employees leave within the first year.

Wages
• A substantial number of associates earn far below the poverty line
according to “Is Wal-Mart Too Powerful?” which appeared in
Business Week on October 6, 2003 and to United States
Department of Health and Human Services 2001 Poverty
Guidelines and “Statistical Analysis of Gender Patterns in Wal-
Mart’s Workforce” by Dr. Richard Drogin from 2003.

• Associates cannot earn enough to support a family according to

“Poverty and Family Budgets” online at www.epinet.org.

• Wal-Mart can afford wage increases according to the group's

analysis of the Wal-Mart Annual Report 2005

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• Wal-Mart illegally forces employees to work off-the-clock, based
on wage and hour lawsuits listed in that same report. The group
also refers to the Associated Press article, "Federal Jury Finds
Wal-Mart Guilty in Overtime Pay Case," which appeared in the
Chicago Tribune, which appeared on Business section page 3, on
December 20, 2003, and to Steven Greenhouse's article, “Suits
Say Wal-Mart Forces Workers to Toil Off the Clock,” which
appeared in the New York Times in March 2002.
• A study by the Los Angeles Alliance for a New Economy found
that Wal-Mart employees typically earn about 20% less than the
average U.S. retail worker, and some $10,000 less than what the
average two-person family requires to meet its basic needs.
• Wal-Mart violates the Fair Labor Standards Act by having minors
work too late, during school hours, or for too many hours in a day
and by having associates miss breaks and lose meals according to
the Greenhouse article.
• Wal-Mart founder Sam Walton once said, "I pay low wages. I can
take advantage of that. We're going to be successful, but the basis
is a very low-wage, low-benefit model of employment." Wal-Mart
managers are judged by upper management based on their ability
to control payroll costs, which puts extra pressure on higher-paid
workers to be more productive. The above statement and the
internal strategy that Wal Mart applies in its company made labor
and other interest groups stand against Wal-Mart.

2. Working conditions
• Wal-Mart has also faced accusations involving poor working
conditions of its employees. For example, a class action lawsuit in
Missouri asserted approximately 160,000 to 200,000 people who
were forced to work off the clock, were denied overtime pay, or
were not allowed to take rest and lunch breaks.
• In 2000, Wal-Mart paid $50 million to settle a class-action suit that
asserted that 69,000 current and former Wal-Mart employees in
Colorado had been forced to work off-the-clock. The company has
also faced similar lawsuits in other states, including Pennsylvania,
and Oregon.
• Class-action suits were also filed in 1995 on behalf of full-time
Wal-Mart pharmacists whose base salaries and working hours
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 were reduced as sales declined, resulting in the pharmacists being
treated like hourly employees.
• Contrary to criticism that Wal-Mart holds employees in an iron grip
of fear and intimidation, on October 16, 2006, approximately 200
workers on the morning shift at a Wal-Mart Super Center in
Hialeah Gardens, Florida walked out in protest against new store
policies and rallied outside the store, shouting "We want justice"
and criticizing the company's recent policies as "inhuman." This
marks the first time that Wal-Mart has faced a worker-led revolt of
such scale, according to both employees and the company.
• Reasons for the revolt included cutting full-time hours, a new
attendance policy, and pay caps that the company imposed in
August 2006, compelling workers to be available to work any
shift (day, swing or night), and that shifts that would be assigned
by computers at corporate headquarters and not by local
managers.
• The report by Congressman Miller alleged that in ten percent of
Wal-Mart's stores, nighttime employees were locked inside,
holding them prisoner. There has been some concern that Wal-
Mart's policy of locking their nighttime employees in the building
has been implicated in a longer response time to dealing with
various employee emergencies, or weather conditions such as
hurricanes in Florida.

ACTION BY WALMART :

 Wal-Mart said this policy was to protect the workers, and the
store's contents, in high-crime areas and acknowledges that some
employees were inconvenienced in some instances for up to an
hour as they had trouble locating a manager with the key.
 However, fire officials confirm that at no time were fire exits locked
or employees blocked from escape. Wal-Mart has advised all
stores to ensure the door keys are available on site at all times.
 The issue has become less of a problem with the increase in the
number of twenty-four hour stores.

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 PUBLIC RELATIONS
Wal-Mart Stores Inc. is the largest retail company in the United States
and has been ranked number one on the Fortune 500 Index by Fortune
Magazine. Wal-Mart has four parts to their corporate strategy.

1. Dominance in the Retail Market

2. Expansion in the U.S. and International Markets
3. Creation of Positive Brand and Company Recognition
4. Branch Out into New Sectors of Retail

Wal-Mart’s public affairs strategy is working to implement of these policy

goals happen. Its public affairs strategy enables the company to move
into other sectors of the marketplace and expand into foreign countries.
The public affairs strategy also involves gaining access to politicians
who can help Wal-Mart achieve its goals. Wal-Mart has a very active
Political Action Committee that gives almost a quarter million dollars
annually.

THE PR CAMPAIGN :

“Working Families for Wal-Mart”

It was an advocacy group formed by Wal-Mart and the Edelman public
relations firm on December 20, 2005. It has been used to counter
criticism of Wal-Mart from union-funded groups such as Wake Up Wal-
Mart and Wal-Mart Watch which were in their infancy at that time. The
group is financially supported by Wal-Mart and is headquartered in
Edelman’s Washington, D.C. office. It is not organized as a non-profit,
and is not required to disclose its sources of funding.

Critics have accused Wal-Mart of leaving the impression that Working

Families for Wal-Mart is a spontaneous grass-roots organization, without
fully disclosing its financial reliance upon Wal-Mart. The group's web site
does not reveal its connection to Wal-Mart or Edelman. Its home page
features a blog and with a link stating that the bloggers are employees of
Edelman; however, no other mention is made of Edelman on the site.
This has led to accusations of Wal-Mart being engaged in astroturfing.
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For example, Wal-Mart Watch has stated, “Working Families for Wal-
Mart is not a lobbying group or non-profit, but is a sock puppet for
Edelman, Wal-Mart’s public relations firm…”.

Mission statement
According to the organization's official website, "Working Families for
Wal-Mart is committed to fostering open and honest dialogue with
elected officials, opinion makers and community leaders that conveys
the positive contributions of Wal-Mart to working families. We believe
that Wal-Mart provides value to its customers, to its associates and to
the communities it serves."

Leadership
Initial leadership
The group's initial leader was Bishop Ira Combs Jr. of the Greater Bible
Way Temple of the Apostolic Faith in Jackson, Michigan. According to
Lynda Edward's December 22, 2005 story in the Arkansas Democrat
Gazette, Combs said, “Some friends I worked with on the 2004 Bush
campaign phoned me and asked me if I knew about any good things
Wal-Mart was doing in my community...I said Wal-Mart is supplying jobs
that may not pay a union wage but they pay twice the minimum wage.
They asked me if I would be part of this group. Wal-Mart isn’t paying
me.”

Another of the group's early members, Courtney Lynch, taught seminars

at Wal-Mart headquarters on cultivating female leaders. She states that
she gets no salary as an advocate but estimated that her consulting firm
got 7 percent of its revenue from Wal-Mart this year.

Andrew Young assumes chairmanship

On February 27, 2006, former ambassador Andrew Young assumed
duties as "the public spokesman for a group organized with backing
from Wal-Mart Stores Inc. that defends the world's largest retailer
against mounting attacks from its critics," according to Associated Press
business writer Marcus Kabel's article. In a telephone interview, he told
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Kabel that he is not being paid but that the organization that he currently
heads, GoodWorks International, has a contract from Working Families
for Wal-Mart for consulting work. GoodWorks pairs corporations and
governments on global issues. Working Families for Wal-Mart declined
to disclose how much Wal-Mart contributes or what it is paying
GoodWorks.

Young, a former labor organizer, parts ways with unions regarding Wal-
Mart. "The union position is talking about the redistribution of wealth, but
they're not talking about generating new wealth. Wal-Mart is generating
new wealth when it comes in. The pluses outweigh the minuses. They
do give benefits, they do have health insurance."

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 PROBLEMS ASSOCIATED
WITH WALMART’S PR
1. REACTING TOO LATE AND NOT TAKING A STAND – there
have been occasions when Wal-Mart hasn't taken a stand on key
issues and allowed the public to think in whichever direction they
want to. At times they have reacted too late on an issue and thus,
have suffered considerable damage. An example for this is "The
homo-sexualist activism was a burning issue in the US some time
back and Wal-Mart issued the statement "Wal-Mart does not have
a position on same sex marriages and we do not give preference
to gay or lesbian to our suppliers. Wal-Mart does have a strong
commitment to diversity among our associates and against
discrimination everywhere" after issuing this statement came the
report about wal-mart contributes 60000$ to pro-homosexual
employee advocacy group. Thus, it ended up facing the wrath of
both the groups, those in favor as well as against the GLBT
policies (Gay, Lesbian, Bisexual and Trans-gendered). For years
Wal-Mart did little to promote itself as a positive social force,
believing its low prices would speak for themselves. But as it
mushroomed to become one of the world's biggest companies --
with 6,700 stores and $312 billion in sales last year -- it
increasingly felt the sting of public criticism and pressure to fight
back.

2. LACK OF CREDIBILITY - Doubts have been raised over the

credibility of the people associated with Walmart's PR campaigns.
Example – Mr. Young (Former chairman of Working Families for
Wal-Mart, a nonprofit organization funded by the retail giant to
combat criticism of the company.) The people hired by Wal-Mart
for their PR campaigns or the company's executives have often
made irresponsible public remarks thus giving rise to new PR
problems without solving the previous ones.

3. LACK OF REAL ARGUMENTS IN DEFENSE OF REAL ISSUES –

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 Whenever faced with a problem with any of its publics Wal-Mart
has come up with make – up campaigns as their PR response to
those problems. The issues that were affecting Wal-Mart's publics:
low wages, insufficient health insurance, denial of fundamental
workers' and trade union rights, human rights violations etc. have
remained as it is. No concrete action was taken to remove the
causes that were creating the issues.

4. ASYMMETRICAL NATURE OF THE CONFLICT - The reason

Wal-Mart is losing this battle is because of the asymmetrical
nature of the conflict. The Wal-Mart adversaries are willing to do
what ever is necessary to hurt Wal-Mart, while on the other hand,
Wal-Mart is unwilling to defend itself effectively against these
attacks AND more importantly, assertively manage their reputation
in the future to prevent attacks like this. With the advent of citizen
media, and the willingness of special interest groups to engage in
increasingly hostile tactics, a new set of rules are called for.
Traditional PR doctrine is woefully unprepared to fight these
battles.

5. UNABLE TO CONTROL THE ONLINE CRITICISM CREDIBLY –

Wal-Mart has not been able to realize the potential of their
customers, whose voices now have widely distributed forums for
complaints or praise, to become either brand partners—or brand
message hijackers.

6. NO ADEQUATE MEDIA MANAGEMENT- Very less no of press

releases and no control over the text being printed in the
newspapers and research reports being published on a regular
basis. A very weak content analysis done on behalf of company’s
PR.

7. NO EFFORT TO CONTROL THE CONTENT OVER THE

INTERNET - The content over internet went to such an extent that
the normal Google results for a "Wal-Mart" search yielded mostly
unflattering material, potentially overshadowing the company's
own sites.

8. LACK OF CORPORATE SOCIAL RESPONSIBILITY –Wal-Mart

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 has never involved itself into any concrete socially responsible
activities. Wherever it has involved itself has lacked the social
philosophy and was done with a purpose such that they couldn’t
change their greedy vulture like corporate image. Even their
charitable acts came under the lenses of doubt of the public and
hence were not as successful.

9. LACK OF PR TRANSPARENCY: Use of fake blogs and fake

activities that were assumed to help Wal-Mart in solving some
controversies and improving the battered image proved absolutely
against Wal-Mart only. People started seeking doubts on sincerity
of Wal-Mart.

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RECOMMENDATIONS
 While Wal-Mart’s public affairs strategy works well with its
corporate strategy. It is felt that there are some
recommendations which could still make the company work
better. After studying Wal-Mart’s PR activities we make the
following recommendations.

 Wal-Mart has often been criticized for their opposition to

allowing their employees to be unionized. Wal-Mart needs to
clarify their reasons for their opposition to unionization.

 The public affairs strategy must also address the negative

feelings harbored by some groups who feel that Wal-Mart is
encroaching into far too many other sectors retail than it
should. These concerns must be addressed if Wal-Mart is to
enjoy continued success in creating positive name
recognition. While addressing this issue, the Wal-Mart
executives have often said that ”INCOMPETENCY” is the
reason for the failure of small retailers. The communication
made for this purpose should not be strident as it has been
in the past.

 Wal-Mart needs to take concrete actions to deal with the

major issues affecting the organization. The organization has
often been accused of doing make-up campaigns to
temporarily deviate the attention of the public from the main
issues. This strategy has failed time and time again. Hence,
there is a need to take actions that will communicate to their
publics that some real actions are being taken to resolve the
issues.

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 There is lack of consistency in the communication made by
the company on a significant issue that is affecting a large
group of people. For example – Andrew Young making a
highly controversial statement that was contradictory to all
the other communications that were made by the company
on that particular issue. Wal-Mart can to do better by
ensuring the basic rules of PR Communication.

 There is a huge positive side to Wal-Mart. Wal-Mart can deal

with the torrents of criticism by communicating the positive
activities. For example how Wal-Mart’s influence on
suppliers has helped bring about key changes that are
positively affecting the environment (Use of smaller
detergent bottles of double-strength liquid detergent - a
change that will reduce the use of plastics, water and fuel),
the socially responsible behavior of the organization of the
organization in helping the U.S deal effectively with the
aftermath of the Katrina Hurricane.

 It is also essential that the PR actions and communications

should be targeted at the right public. It is important to notice
the people who are complaining about the operations of Wal-
Mart. These people are not the one million plus customers of
Wal-Mart. The people criticizing Wal-Mart are the so called
elite of the society who believe that Wal-Mart is not meant
for them.

 Wal-Mart needs to deal with issues proactively. They have

often reacted too late and thereby, had to bear the brunt of
the consequences. There is a need for them to extensively
scan the environment for issues that affect them and then
determine their PR strategy on that issue so that the desired
response can be obtained by taking the required action.

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 CONCLUSION
As far the size of Wal-Mart’s publics is concerned, it is amongst the
biggest organizations in the world. There are a large number of people
that are affected either positively or negatively by every single action
taken by Wal-Mart. This public consists of not only the parties directly
affected by Wal-Mart but also the people who are indirectly affected by
the organization, for example the employees of Wal-Mart’s suppliers, the
suppliers of Wal-Mart’s suppliers and their employees and a large
number of other groups. Thus, the number of Public Relations issues
faced by Wal-Mart is more than many other organizations that are
earning the same or even a higher level of profits. Therefore the extent
and the nature of PR activities required for Wal-Mart is different from
those required for other organizations.

Over the years, Wal-Mart has been involved in a number of

controversies. Today in the U.S a large number of people perceive it as
a greedy giant that is crushing its employees, destroying local
businesses and is responsible for a host of problems in the U.S. There
are several blogs, websites, groups that are openly asking people to
stop shopping at Wal-Mart. Wal-Mart has till now managed to maintain a
good rate of growth and has been able to provide a rate of return on the
investments made by its investors. But maintaining their position of the
Second best organization in Fortune 500 is only going to get more and
more difficult for Wal-Mart.

Wal-Mart has faced a large number of controversies. The PR actions

and communications undertaken to deal with these controversies have
been poor to say the least. Most of their PR campaigns have led to the
creation of a need for even more PR campaigns.

But the big question is “How has Wal-Mart managed to remain so

successful even though the Publics Relations hasn’t been so good. The

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answer to that question is at that Wal-Mart is offering its products at the
lowest rates and that it is satisfying the needs of a large low income
population of the U.S.

A major criticism of Wal-Mart’s PR strategy is that they haven’t done

anything concrete to remove the issues affecting their publics. The major
issues facing Wal-Mart are low wages, pressure on suppliers to reduce
costs, pressure to increase productivity etc.. All these issues are cost
based. Resolving these issues will mean higher wages and higher cost
of raw materials and this in turn will lead to higher prices, which in turn
will affect the organizations competitive edge and ultimately its success.
Thus, the situation is a tricky one for Wal-Mart.

Their success in the future will depend on how effectively they balance
these two conflicting issues.

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 BIBLIOGRAPHY
WEBSITES

• http://en.wikipedia.org/wiki/Wal-Mart
• www.sourcewatch.org/index.php?title=Wal-Mart_Stores
• en.wikipedia.org/wiki/Criticism_of_Wal-Mart
• money.howstuffworks.com/wal-mart.htm
• www.city-data.com/forum/politics-other-controversies/23107-
walmart-evil-empire.html
• walmartwatch.com/issues/supplier_relationships/
• www.walamrtwatch.com
• www.dissenting.org/national.html
• www.wakeupwalmart.com
• mike-pereira.com/subpage/docs/Wal-Mart.htm
• www.hbs.edu/news/news.html
• workingfamiliesforwalmart.com/
• www.edelman.com/speak_up/blog/archives/2006/10/a_commitme
nt.html
• www.bloggersblog.com/corporateblogging/
• socialistunity.blogspot.com/2007_02_01_archive.html
• www.stevensilvers.com/stakeholder_relations/index.html
• www.ethicsworld.org/archivednews.php
• woscenarios.typepad.com/maneuver_marketing_commun/2005/12/assym
etrical_co.html
• www.forwalmart.com/

MAGAZINES ARCHIVES

• Business Week, Issue - Jan 11, 1999 .

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 • Business Week, Issue - Oct 6, 2003
• Wire Tap Magazine , Issue - Aug 16, 2005
• Vogue magazine, Issue - Sept 01, 2005
• Fortune, Issue - Aug 7, 2006

BOOKS

• “THE WORLD IS FLAT” authored by Thomas Friedman,

Flattener 7 - Supply Chaining, 2006 edition, pg 151.

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