The Ultimate Wal Mart Thread; Is Wal Mart good for America

[Bowfinger]

Originally posted by: dirtboy

Originally posted by: Bowfinger
While I compliment the effort you put into explaining and supporting your premise, it is fundamentally flawed. It assumes that all sources of income and revenue are somehow equal. That is not the case.

Let me offer an extreme example to explain what I mean. Would you contend it is acceptable for Wal-Mart to sell cocaine and heroin to maximize its profits? Would you contend that its OK for me to work for a drug dealer to maximize my income? I certainly hope not.

Some things are more important than money, things like right and wrong, and ethics. Especially since the "greed is good" mantra of the 1980's, many corporations seem to believe money is the one and only objective. Concepts like right and wrong are distant memories. In many cases, there seems to be little concern for legal vs. illegal.

In other words, the problem with "much of corporate America" is NOT that it wants to make money. It's the sleazy extremes to which it will go to make more money. Profiting on the deaths of employees is one example.

WalMart doesn't sell illegal drugs.

I see you totally missed the point.

You say there are more important things than money. Right? So why do you work for such a high wage when you could work for less????? After all, there are more important things than money, but I doubt that is the case for you.

Then you would be mistaken. I had a very nice Director position in a regional consultancy a few years ago. I was offered a Vice Presidency if I would relocate. I decided to leave it for a less-lucrative industry position because I didn't want to disrupt my family and I didn't want an increase in my already-excessive travel. It took five years to get back to the income I had when I left. Even today, I could draw an extra $30K - $50K, maybe more, if I was willing to go back into consulting.

It's not worth it to me. Some things are more important than money.

Yes, WalMart did buy insurance on their employees. Whoops. They made a mistake and were made aware of this horrible practice. Did they fix it? Yep. C'mon Bow, it's not like you've never make a mistake or done something wrong.

In my opinion, that's more than a mistake. It is a sleazy attempt to capitalize on the deaths of employees. Moreover, I thinks it's rather misleading to suggest they fixed it:

(from the article linked above)
Wal-Mart says it lost $100 million on the policies and unwound them in 2000 after court decisions took away tax advantages.

Wal-Mart is suing AIG and Hartford Life, which sold the policies, to force them to pay Wal-Mart's losses and additional expenses ? potentially including the cost of Monday's settlement.

It sounds to me like they're still trying to make money off the deal, or at least cut their losses.

 

[Bowfinger]

Originally posted by: CADkindaGUY

Originally posted by: EagleKeeper
A company can choose to use morals to determine its business goals.
As long as it stays within the laws that apply to it, it can choose what method of running the business to meet its internal goals.
If a customer is willing to pay for an overpriced piece of merchandise, the company has no legal obligation to not provide it.
If a customer demands a shoddy quality at a low price and the company can provide it, then the customer is happy.
The company will price goods that the customer desires based on its own costs and the need to copmete and profit.

If the morals/ethics that the company has are upsetting to the consumer, the consumer can choose not to do business with a company.
If they feel that what the company is doing should become illegal, then they can work to get that practice declared illegal.
If they do not like the ethics, then they can work to change those ethics by applying pressure to the company.

:beer: Good post.

CkG

Yes it is. Do you believe it contradicts something I said, or something said by others here who argue that Wal-Mart is not good for America?

 

[EagleKeeper]

Originally posted by: Bowfinger

Originally posted by: CADkindaGUY

Originally posted by: EagleKeeper
A company can choose to use morals to determine its business goals.
As long as it stays within the laws that apply to it, it can choose what method of running the business to meet its internal goals.
If a customer is willing to pay for an overpriced piece of merchandise, the company has no legal obligation to not provide it.
If a customer demands a shoddy quality at a low price and the company can provide it, then the customer is happy.
The company will price goods that the customer desires based on its own costs and the need to copmete and profit.

If the morals/ethics that the company has are upsetting to the consumer, the consumer can choose not to do business with a company.
If they feel that what the company is doing should become illegal, then they can work to get that practice declared illegal.
If they do not like the ethics, then they can work to change those ethics by applying pressure to the company.

:beer: Good post.

CkG

Yes it is. Do you believe it contradicts something I said, or something said by others here who argue that Wal-Mart is not good for America?

The problem is how one defines what is good for America.
Social issues do not always match up with economic issues.

Wal-Mart is providing jobs - non refutable.
Are those jobs valuable - debatable based one how defines value.
Does Wal-Mart cause existing jobs to disapear - yes - they offer alternatives for the consumer and the consumer votes with the $$$

The final concern is which side of the fence one stands on. Social or Economic.
Either side will not trust the other and justifiably so.
Social group feels that economics should not be a concern in decisions, even out the playing field at any cost, regardless of the long term consequences.
Economic group feels that the trickle down and recursive spending will eventually allow the ability to meet the concerns of the Social group.

Both are needed and both concepts keep the other one in check from destroying the system.

 

[DragonMasterAlex]

I'll put it really simply and then I'm done with this topic:

Leave the market FREE to operate. If corporations behave badly by using force or fraud, PUNISH them. If Individuals behave badly by using Force of Fraud, PUNISH them.

Restrain people from harming one another but leave them otherwise FREE to conduct their lives as they see fit.

Jason

 

[LunarRay]

Re: Insurance on employees.

If a company has an insurable interest it is quite common for that company to take out a policy and be the named beneficiary. My company has $500,000 on all key employees.. there is an insurable interest there. If one of us died or was total disabled for long term the cost to the company would be offset by this policy.
To insure the 'labor' force is arguably not an insurable interest scenario - not a legitimate business expense to the IRS - and the underwriter should not issue the policy for insurable risk reasons. Least ways not if the turn over is greater than that of the insured risk. IMO..

 

[LunarRay]

Folks are somewhat compelled to seek employment even if it is at Walmart. IF the person is on unemployment AND the job openings at Walmart are or fall under the 'suitable' clause of most unemployment statutes. The fact that folks accept employment for other reasons is a choice issue. Their choice. Of course the alternative choices may be more dismal and thus makes the decision to seek employment at Walmart the least painful alternative.
Walmart is successful due to both the available labor willing to work at the stated wages and the importation ease of cheaper alternative products to what is available from American sources. This coupled with the fact that Walmart can also control, by virtue of its size and procurement techniques, American made products makes Walmart potentially an economic danger to US interests. It has the effect of deflating not only the wage earning capacity of the worker but the cost structure of competing entities which forces them to act in a manner similar to Walmart. Product cost and Service cost must be reduced across the board by American entities otherwise alternative and competing international interests with lower cost structures will gobble up market share. The American worker can only lose in this gambit. If this has started by Walmart's activities and I think it has then Walmart and its strategies is bad for America..

 

[b0mbrman]

[Edit] Already been said...

I came late to the party...so sue me...

 

[b0mbrman]

Oh, and btw, I always thought America's economic prowess came about from ever-increasing industrial efficiency and not from restricting trade and growth.

I skipped a few pages in the middle but I'll definitely catch up tomorrow. This has to be one of the more interesting threads I've seen on AT in a while...

 

[ROSALIEPIZZA]

Why I vote Wal Mart BAD

 

[dmcowen674]

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

I didn't know Vlasic filed for Bankruptcy, brought on at the hands of Wamart

From the same article:

Food:

Vlasic Pickles was roped into a contract with Wal-Mart, in which Wal-Mart sold a 3 gallon jar of whole pickles for $2.97. Wal-Mart sold 240,000 gallons of pickles per week. But the price of the 3 gallon jar was so low, that it vastly undercut Vlasic's sales of 8 ounce and 16 ounce jars of cut pickles; further, Vlasic only made a few pennies per 3 gallon jar. With its profits tumbling, Vlasic asked Wal-Mart for the right to raise the price per 3 gallon jar to $3.49, and according to a Vlasic executive, Wal-Mart threatened that if Vlasic tried to back out of this feature of the contract, Wal-Mart would cease carrying any Vlasic product.

Eventually, a Wal-Mart executive said, "Well, we've done to pickles what we did to orange juice. We've killed it"?meaning it had wiped out competitor products. Finally, it allowed Vlasic to raise prices; but in January 2001, Vlasic filed for bankruptcy.

 

[dmcowen674]

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

More great and Fair Business practices from the article:

Wal-Mart has launched an aggressive campaign, through cut-throat pricing, to destroy the parent company, Toys 'R' Us, the second-largest toy seller (after Wal-Mart) in America. As an example of how this strategy operates: The popular Hot Wheels T-Wreck Play Set toy sells for $42 wholesale. However, according to the Nov. 19 Wall Street Journal, Wal-Mart is now selling that very toy at $29.74, a loss of more than $10 per unit.

If the supplier company doesn't sell its goods at the price Wal-Mart sets, Wal-Mart denies them
shelf space at its stores...However, even when a supplier meets Wal-Mart's prices, the prices are so low, and the supplier loses so much money, that the supplier is forced into bankruptcy.
---------------------------------------------------------------
Sure sounds like an open and free market capitalistic society to me. Let's shutdown all Vendors in the world and only have WalMarts.

"The Bible got it wrong, it's not One World Government, it's One World Walmart."

 

[dmcowen674]

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

More from the same article

It's not just the U.S. Booming and Soaring at the hands of Walmart:

Destroying Labor Overseas

Wal-Mart buys a lot of its goods from China, which in many sections of the country, pays very low wages. One case that has come to light concerns the Ching Hai Electric Works Co. in Shajing, which produces electric fans.

In the late 1990s, Wal-Mart started making demands that the price of the fans be lowered, and they have fallen from approximately $7, to $4 per fan. But to lower the price, the manager of the plant had to cut its workforce in half, to 1,500 workers, while maintaining the same level of orders. This has led to many workers working 14 hours per day, for a pittance.

The workers' starting salary is $32 per month, which is more than 40% below China's minimum wage of $56 per month. There are also reportedly many workplace accidents in the factory.
---------------------------------------------------------------------------------
Alright a whopping 13.5 cents an hour, wow their Salaries went up from 25 cents an hour. We could pa y 10 cents an hour here in the U.S. and Salaries would be highest yet. Go Go Go

 

[dmcowen674]

Originally posted by: CADkindaGUY

Originally posted by: Bowfinger
That's not an indictment of Wal-Mart. It's an example of how sleazy much of corporate America has become in its quest for profits at all costs.

Yep - I say we should let the gov't run all the corporations. It's obvious the big bad evil corporations are the worst thing to happen to America since the introduction of slave labor. It's time we turn over the reigns of corporate control to the gov't - they'd do a much better job than those eevvviiillll corporations.

Or maybe we should just turn everything over to Unions.

CkG

1-11-2004 U.S. Graphics Companies turn software contols over to Government

WASHINGTON - Adobe Systems Inc. acknowledged Friday it quietly added technology to the world's best-known graphics software at the request of government regulators and international bankers to prevent consumers from making copies of the world's major currencies.

The U.S. Federal Reserve and other organizations that worked on the technology said they could not disclose how it works and would not name which other software companies include it in their products.

Experts said the decision by Adobe represents one of the rare occasions when the U.S. technology industry has agreed to include third-party software code into commercial products at the request of government and finance officials.

Adobe revealed it added the technology after a customer complained in an online support forum about mysterious behavior by the new $649 "Photoshop CS" software when opening an image of a U.S. $20 bill.

Adobe said the technology slows its software's performance "just a fraction of a second" and urged customers to report unexpected glitches. It said there may be room for improvement.

Kevin Connor, Adobe's product management director, said the company did not disclose the technology at the request of international bankers. He said Adobe may add the detection mechanism to its other products.

Angry customers have flooded Adobe's Internet message boards with complaints about censorship and concerns over future restrictions on other types of images, such as copyrighted or adult material.

"I don't believe this. This shocks me," said Stephen M. Burns, president of the Photoshop users group in San Diego. "Artists don't like to be limited in what they can do with their tools. Let the U.S. government or whoever is involved deal with this, but don't take the powers of the government and place them into a commercial software package."

Connor said the company's decision to use the technology was "not a step down the road towards Adobe becoming Big Brother."

 

[Ultima]

Originally posted by: dmcowen674

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

More great and Fair Business practices from the article:

Wal-Mart has launched an aggressive campaign, through cut-throat pricing, to destroy the parent company, Toys 'R' Us, the second-largest toy seller (after Wal-Mart) in America. As an example of how this strategy operates: The popular Hot Wheels T-Wreck Play Set toy sells for $42 wholesale. However, according to the Nov. 19 Wall Street Journal, Wal-Mart is now selling that very toy at $29.74, a loss of more than $10 per unit.

If the supplier company doesn't sell its goods at the price Wal-Mart sets, Wal-Mart denies them
shelf space at its stores...However, even when a supplier meets Wal-Mart's prices, the prices are so low, and the supplier loses so much money, that the supplier is forced into bankruptcy.
---------------------------------------------------------------
Sure sounds like an open and free market capitalistic society to me. Let's shutdown all Vendors in the world and only have WalMarts.

"The Bible got it wrong, it's not One World Government, it's One World Walmart."

That seems rather anti-competitive to me. One thing that worries me though is why aren't the workers in the slave shops rising against their poor working conditions? I hope they lay the smackdown on their employers sooner or later, similar to what happened here in NA decades ago.

 

[dmcowen674]

Originally posted by: Ultima

Originally posted by: dmcowen674

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

More great and Fair Business practices from the article:

Wal-Mart has launched an aggressive campaign, through cut-throat pricing, to destroy the parent company, Toys 'R' Us, the second-largest toy seller (after Wal-Mart) in America. As an example of how this strategy operates: The popular Hot Wheels T-Wreck Play Set toy sells for $42 wholesale. However, according to the Nov. 19 Wall Street Journal, Wal-Mart is now selling that very toy at $29.74, a loss of more than $10 per unit.

If the supplier company doesn't sell its goods at the price Wal-Mart sets, Wal-Mart denies them
shelf space at its stores...However, even when a supplier meets Wal-Mart's prices, the prices are so low, and the supplier loses so much money, that the supplier is forced into bankruptcy.
---------------------------------------------------------------
Sure sounds like an open and free market capitalistic society to me. Let's shutdown all Vendors in the world and only have WalMarts.

"The Bible got it wrong, it's not One World Government, it's One World Walmart."

That seems rather anti-competitive to me. One thing that worries me though is why aren't the workers in the slave shops rising against their poor working conditions? I hope they lay the smackdown on their employers sooner or later, similar to what happened here in NA decades ago.

Competition, Who needs Competition, when we have Walmart? You hear the AT Experts, more Walmart, No competition is the greatest thing for America.

Hahaaa, have to laugh. And how did America put the smackdown in North America early last Century? Unions whic are now the scourge of our AT Experts.

 

[b0mbrman]

Originally posted by: dmcowen674

Originally posted by: ROSALIEPIZZA
Why I vote Wal Mart BAD

More from the same article

It's not just the U.S. Booming and Soaring at the hands of Walmart:

Destroying Labor Overseas

Wal-Mart buys a lot of its goods from China, which in many sections of the country, pays very low wages. One case that has come to light concerns the Ching Hai Electric Works Co. in Shajing, which produces electric fans.

In the late 1990s, Wal-Mart started making demands that the price of the fans be lowered, and they have fallen from approximately $7, to $4 per fan. But to lower the price, the manager of the plant had to cut its workforce in half, to 1,500 workers, while maintaining the same level of orders. This has led to many workers working 14 hours per day, for a pittance.

The workers' starting salary is $32 per month, which is more than 40% below China's minimum wage of $56 per month. There are also reportedly many workplace accidents in the factory.
---------------------------------------------------------------------------------
Alright a whopping 13.5 cents an hour, wow their Salaries went up from 25 cents an hour. We could pa y 10 cents an hour here in the U.S. and Salaries would be highest yet. Go Go Go

Destroying, eh?

Because before Wal-mart, everyone in China had three cars and a swimming pool, right?

So what alternative would you take? Would you stop Wal-mart from buying from that factory entirely? Now those people who had a crappy standard of living are either out of work entirely or have an even lower-paying job and an even crappier standard of living. Remember, they wouldn't have taken the Wal-mart supplying job unless it was their best option.

Or would you force Walmart to force the Shajing factory to pay their workers more?

In the best case scenario, you're looking at a few Chinese people losing jobs and a slightly more expensive product.

Remember, labor is but one input to production with machinery, land, and entrepreneurship/risk being some other inputs. When the price of any one of these goes up, the factory leaders put a bigger fraction of money into the other factors.

In the worst (more likely) case, Wal-mart will simply find another, less expensive source and all those Chinese guys lose their jobs anyway. Remember, Wal-mart wouldn't have picked that factory unless it was their best option.

 

[dirtboy]

Originally posted by: b0mbrman

So what alternative would you take? Would you stop Wal-mart from buying from that factory entirely? Now those people who had a crappy standard of living are either out of work entirely or have an even lower-paying job and an even crappier standard of living. Remember, they wouldn't have taken the Wal-mart supplying job unless it was their best option.

Let's not be rational here. Dave doesn't care about other people. He only cares about American's and himself.

 

[LunarRay]

We that are Americans endeavor to persevere through all adversity to accomplish one simple objective which I believe is the sustainment of our 'way of life' in our own home land. If this task subordinates the need of another nation to our own then that too must be borne. We, as the world's voice of reason and liberty, must always remain strong. Strong both economically and morally. Not one at the expense of the other but, both in concert. Without both we speak from shallow stead. We can neither induce nor coerce those nations opposed to our views to see us as emblematic of what to all was once the personification of 'inalienable rights'.

 

[Bowfinger]

Originally posted by: Bowfinger

Originally posted by: dirtboy

Originally posted by: Bowfinger

Well, until the anti-capitalists realise that Walmart is driven by their CUSTOMERS - no meaningful discussions can take place.

Sorry, that is also wrong. Wal-Mart is driven by its owners, i.e., stock holders.

You really don't know anything about businesses, do you?

LOL. That comment is more absurd than you can imagine.

If companies could exist without employees, everyone would be profiting from having one, but they don't work that way.

WalMart is driven by their customers. The owners and stockholders run the company. There's a big difference. The owners do what the customers want. Simple.

If a company didn't do what the customer wanted, they wouldn't be in business!!!!

With all due respect son, you're contradicting yourself. In your previous post, you suggest it's appropriate for business to do whatever it can to make money, i.e., it is driven to make money. Now you suggest that business is driven by customers? Sorry, that's not true.

Wal-Mart exists to make money for its owners. It is driven by the desire to make as much money as possible. Its business strategy for making money is selling goods and services to customers for maximum profit. Maximum profit is attained by minimizing costs and maximizing revenue. Maximizing revenue requires finding the sweet spot that best balances high profit margins and high sales volumes. High sales volumes are achieved through multiple means: prices, marketing, location, competition (i.e., lack of), and customer loyalty. Customer loyalty, in turn, is driven in part by customer service.

In other words, customers are only one factor in Wal-Mart's business strategy. To the extent that Wal-Mart maximizes profits by giving customers what they want, Wal-Mart will do so. Nonetheless, the driver is profits, NOT customers. If you doubt this, you only have to ask why Wal-Mart doesn't sell everything below cost, or even give it away free. After all, that's what the customers want. The answer is it isn't what the stock holders (owners) want. They want profits. That's what drives Wal-Mart.

Customers are the means to the end. They are not the end. They do not drive Wal-Mart.

DB? Cad? I answered your question. Do you disagree?

 

[CADsortaGUY]

Originally posted by: Bowfinger

Originally posted by: Bowfinger

Originally posted by: dirtboy

Originally posted by: Bowfinger

Well, until the anti-capitalists realise that Walmart is driven by their CUSTOMERS - no meaningful discussions can take place.

Sorry, that is also wrong. Wal-Mart is driven by its owners, i.e., stock holders.

You really don't know anything about businesses, do you?

LOL. That comment is more absurd than you can imagine.

If companies could exist without employees, everyone would be profiting from having one, but they don't work that way.

WalMart is driven by their customers. The owners and stockholders run the company. There's a big difference. The owners do what the customers want. Simple.

If a company didn't do what the customer wanted, they wouldn't be in business!!!!

With all due respect son, you're contradicting yourself. In your previous post, you suggest it's appropriate for business to do whatever it can to make money, i.e., it is driven to make money. Now you suggest that business is driven by customers? Sorry, that's not true.

Wal-Mart exists to make money for its owners. It is driven by the desire to make as much money as possible. Its business strategy for making money is selling goods and services to customers for maximum profit. Maximum profit is attained by minimizing costs and maximizing revenue. Maximizing revenue requires finding the sweet spot that best balances high profit margins and high sales volumes. High sales volumes are achieved through multiple means: prices, marketing, location, competition (i.e., lack of), and customer loyalty. Customer loyalty, in turn, is driven in part by customer service.

In other words, customers are only one factor in Wal-Mart's business strategy. To the extent that Wal-Mart maximizes profits by giving customers what they want, Wal-Mart will do so. Nonetheless, the driver is profits, NOT customers. If you doubt this, you only have to ask why Wal-Mart doesn't sell everything below cost, or even give it away free. After all, that's what the customers want. The answer is it isn't what the stock holders (owners) want. They want profits. That's what drives Wal-Mart.

Customers are the means to the end. They are not the end. They do not drive Wal-Mart.

DB? Cad? I answered your question. Do you disagree?

Yes - You are wrong IMO. Not necessarily what you said, but the premise behind it. Yes, WalMart exists to make money - I stated as much - yes profit is their goal, but it is the consumer is the engine. If consumers don't like the product, price, service - they can choose not to shop there. If enough consumers stopped shopping there - WalMart would suffer the same fate as Kmart(although as mentioned there was alot that went into Kmart's demise).
You seem to have a problem understanding that in a business' quest for profits -the consumer IS the focal point. It is the business's job to offer a quality(enough) product at a price the consumer is willing to purchase it at. So yes - it IS the customer who "drives" things. The business is ALWAYS going to seek profits - that is why they are in business, no? But when the consumer demands cheap products and wide varieties(such as WalMart provides) then WalMart must find a cheap enough product to fulfill those demands and still be able make a profit. This isn't a charity business - they are in business to make money - they MUST give the consumer what the consumer wants at a price they are willing to pay. If you don't like it -too fricken bad - don't shop there. If WalMart breaks laws -they should be held accountable just as ANY other business should be. But for anyone here to whine about business practices or product quality is just asinine. Just don't shop there - or work to get laws changed so WalMart can't "ruin" anything.
Just to make sure we're clear here - WalMart's entire strategy revolves around CONSUMERS.
Location is dictated by consumers(although land availability and cost plays a part) because WalMart isn't going to put a store where people aren't going to go to shop.
Pricing is dictated by consumers because they are the one choosing to purchase or not. If things are too expensive -they don't buy.
Marketing? Umm, well ok maybe. Marketing is used to try to mold the consumers mind and thoughs.
Competition is entirely consumer oriented. It is ultimately the consumer's choice - so competition is exactly driven by the comsumer. If Walmart "wins" then someone has to "lose". That's business - this isn't the public educational system where even when you fail, you somehow get to win - this is the REAL world where if you can't compete - you lose - simple as that.
Customer loyalty - yep, entirely driven by the consumer.
So you see Bowfinger, the customer is the key.

Yes Profits are the goal - but consumers are what drives the company, management has to stay between the lines and do what is necessary to keep consumers supplied with things they want to buy. Without consumers they are NOTHING.
The whole retail business concept is about profiting from consumer's consumption -to say otherwise is to ignore reality.

Oh, and no need to try to call me out - you never seemed to want to address MY post, and I've been waiting since I posted it. What you posted above was to someone else - but i'll just take it as just a plain post instead of a different conversation. But like I said - until people realize it is the consumer who ultimately empowers WalMart - discussion might well be meaningless.

CkG

 

[dmcowen674]

Originally posted by: CADkindaGUY

Originally posted by: Bowfinger

Originally posted by: Bowfinger

Originally posted by: dirtboy

Originally posted by: Bowfinger

Well, until the anti-capitalists realise that Walmart is driven by their CUSTOMERS - no meaningful discussions can take place.

Sorry, that is also wrong. Wal-Mart is driven by its owners, i.e., stock holders.

You really don't know anything about businesses, do you?

LOL. That comment is more absurd than you can imagine.

If companies could exist without employees, everyone would be profiting from having one, but they don't work that way.

WalMart is driven by their customers. The owners and stockholders run the company. There's a big difference. The owners do what the customers want. Simple.

If a company didn't do what the customer wanted, they wouldn't be in business!!!!

With all due respect son, you're contradicting yourself. In your previous post, you suggest it's appropriate for business to do whatever it can to make money, i.e., it is driven to make money. Now you suggest that business is driven by customers? Sorry, that's not true.

Wal-Mart exists to make money for its owners. It is driven by the desire to make as much money as possible. Its business strategy for making money is selling goods and services to customers for maximum profit. Maximum profit is attained by minimizing costs and maximizing revenue. Maximizing revenue requires finding the sweet spot that best balances high profit margins and high sales volumes. High sales volumes are achieved through multiple means: prices, marketing, location, competition (i.e., lack of), and customer loyalty. Customer loyalty, in turn, is driven in part by customer service.

In other words, customers are only one factor in Wal-Mart's business strategy. To the extent that Wal-Mart maximizes profits by giving customers what they want, Wal-Mart will do so. Nonetheless, the driver is profits, NOT customers. If you doubt this, you only have to ask why Wal-Mart doesn't sell everything below cost, or even give it away free. After all, that's what the customers want. The answer is it isn't what the stock holders (owners) want. They want profits. That's what drives Wal-Mart.

Customers are the means to the end. They are not the end. They do not drive Wal-Mart.

DB? Cad? I answered your question. Do you disagree?

Yes - You are wrong IMO. Not necessarily what you said, but the premise behind it. Yes, WalMart exists to make money - I stated as much - yes profit is their goal, but it is the consumer is the engine. If consumers don't like the product, price, service - they can choose not to shop there. If enough consumers stopped shopping there - WalMart would suffer the same fate as Kmart(although as mentioned there was alot that went into Kmart's demise).
You seem to have a problem understanding that in a business' quest for profits -the consumer IS the focal point. It is the business's job to offer a quality(enough) product at a price the consumer is willing to purchase it at. So yes - it IS the customer who "drives" things. The business is ALWAYS going to seek profits - that is why they are in business, no? But when the consumer demands cheap products and wide varieties(such as WalMart provides) then WalMart must find a cheap enough product to fulfill those demands and still be able make a profit. This isn't a charity business - they are in business to make money - they MUST give the consumer what the consumer wants at a price they are willing to pay. If you don't like it -too fricken bad - don't shop there. If WalMart breaks laws -they should be held accountable just as ANY other business should be. But for anyone here to whine about business practices or product quality is just asinine. Just don't shop there - or work to get laws changed so WalMart can't "ruin" anything.
Just to make sure we're clear here - WalMart's entire strategy revolves around CONSUMERS.
Location is dictated by consumers(although land availability and cost plays a part) because WalMart isn't going to put a store where people aren't going to go to shop.
Pricing is dictated by consumers because they are the one choosing to purchase or not. If things are too expensive -they don't buy.
Marketing? Umm, well ok maybe. Marketing is used to try to mold the consumers mind and thoughs.
Competition is entirely consumer oriented. It is ultimately the consumer's choice - so competition is exactly driven by the comsumer. If Walmart "wins" then someone has to "lose". That's business - this isn't the public educational system where even when you fail, you somehow get to win - this is the REAL world where if you can't compete - you lose - simple as that.
Customer loyalty - yep, entirely driven by the consumer.
So you see Bowfinger, the customer is the key.

Yes Profits are the goal - but consumers are what drives the company, management has to stay between the lines and do what is necessary to keep consumers supplied with things they want to buy. Without consumers they are NOTHING.
The whole retail business concept is about profiting from consumer's consumption -to say otherwise is to ignore reality.

Oh, and no need to try to call me out - you never seemed to want to address MY post, and I've been waiting since I posted it. What you posted above was to someone else - but i'll just take it as just a plain post instead of a different conversation. But like I said - until people realize it is the consumer who ultimately empowers WalMart - discussion might well be meaningless.

CkG

A much more eloquent post than usual from Chief AT expert Economist CKG but still "overlooks" the unfair business practices of Walmart but in this new American Walmart only Society what was once "Unfair Business practices" and was dealt with like a crime is now the rule.

Do you honestly expect Consumers to ignore the $10 Elmo at Walmart when it cost Walmart $30 and for them to buy it at the other store for $33 trying to at least pay for shipping and some overhead, nevermind a profit?

 

[CADsortaGUY]

Originally posted by: dmcowen674
A much more eloquent post than usual from Chief AT expert Economist CKG but still "overlooks" the unfair business practices of Walmart but in this new American Walmart only Society what was once "Unfair Business practices" and was dealt with like a crime is now the rule.

Do you honestly expect Consumers to ignore the $10 Elmo at Walmart when it cost Walmart $30 and for them to buy it at the other store for $33 trying to at least pay for shipping and some overhead, nevermind a profit?

Dave - do you understand the concept of "tough sh!t"? Business's do this all the time - they seek market advantage - it's what they need to do to keep their CUSTOMERS and to stay alive and profitable. Yes, WalMart is a big company and can absorb a loss on certain products when others can't. That doesn't mean it is somehow an "unfair business practice" or that it's unethical. Walmart has every right to price things however they wish - as long as they follow the law. Don't like it? - don't shop there/ get the law changed.

CkG

 

[Ldir]

Originally posted by: CADkindaGUY
Business's do this all the time - they seek market advantage - it's what they need to do to keep their CUSTOMERS and to stay alive and profitable. Yes, WalMart is a big company and can absorb a loss on certain products when others can't. That doesn't mean it is somehow an "unfair business practice" or that it's unethical

Yes it does. It is called predatory pricing.

 

[dirtboy]

Originally posted by: Bowfinger

With all due respect son, you're contradicting yourself. In your previous post, you suggest it's appropriate for business to do whatever it can to make money, i.e., it is driven to make money. Now you suggest that business is driven by customers? Sorry, that's not true.

With all due respect old man, you don't know lick about how businesses work if you can't understand two basic concepts that everyone learns in the first 5 minutes of business 101.

1. Businesses are in business to make a profit.
2. If a business does not sell what the customers want they won't make a profit and if they don't make a profit, they won't be in business!

Now if you're trying to tell me that a business is not driven by customers, ask yourself how much money your company would make if it didn't have any customers!

Believe me, I can make a mad profit selling bottles of air. I'll just take used water and liter soda bottles and fill them with air (or just screw the lid on). I'll sell them for big money and I'll make a big profit. But if nobody will buy my bottles of air, I can't make any money!! Very simple concept, really.

 

[dmcowen674]

Originally posted by: Ldir

Originally posted by: CADkindaGUY
Business's do this all the time - they seek market advantage - it's what they need to do to keep their CUSTOMERS and to stay alive and profitable. Yes, WalMart is a big company and can absorb a loss on certain products when others can't. That doesn't mean it is somehow an "unfair business practice" or that it's unethical

Yes it does. It is called predatory pricing.

Unfair Business Practices cleared by U.S. Government and CKG:

05-04-2001 Predatory Pricing: Cleared for Takeoff - A federal judge's ruling makes it easier for big companies to shut rivals out

By Dan Carney

When a federal judge threw out the Justice Dept.'s "predatory pricing" case against American Airlines Inc. on Apr. 27, it wasn't even front-page news in most cities. But the ruling, which the Administration is not expected to appeal, will likely have an impact well beyond the airlines. "This case represented the department's best efforts to fashion a predatory-pricing doctrine for the New Economy," observes Washington antitrust attorney Robert A. Skitol.

The suit's failure means the virtual end of predatory pricing as an antitrust issue for the foreseeable future. But that doesn't mean the problem will go away. Instead, the judge's ruling opens the door for dominant companies to wage bare-knuckles price wars against pesky smaller competitors.

"SOLE SURVIVOR." Now that the average-variable-cost standard has been etched into law, it will be a lot easier for dominant companies to drive their rivals out of business. "This effectively means there can be no price predation" in industries with low variable costs, says New York University law professor Eleanor M. Fox. Beyond airlines, these industries are primarily found in New Economy sectors. Most of the cost of making software, chips, and prescription pills, for example, is in research and development. Once that money has been spent, the cost of making additional units is tiny. In these businesses, aggressive pricing can leave dominant companies "as the sole survivor," says analyst Roger Kay, of IDC in Framingham, Mass.

Of course, low prices sound great for consumers. And they frequently are. But so is competition. Marten's ruling, by putting whole parts of the economy off-limits to predatory-pricing suits, could wind up costing some consumers a lot more than peanuts.
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Oh Dan, CAD & Walmart are using this to a science.

predatory pricing

An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat.