"Is Wal-Mart Good For America?"

Alexandra M. Euglow
Professor Fleury-Lawson
Business and Society
28 November 2011

“Is Wal-Mart Good for America?”

The documentary on “Is Wal-Mart Good for America?” provides an extensive examination of Wal-Mart and how that has affected the U.S. economy. This documentary highlights the changing relationship between manufacturers and the “big-box” retailers, how Wal-Mart has contributed to the bankruptcy of some American businesses and a growing unemployment rate. While Wal-Mart supporters love the advantages of one-stop, low-cost shopping, others are worried at both the outsourcing that has made these low prices possible and how large retailers affect the smaller, local businesses. FRONTLINE examines all of Wal-Mart and leaves you to make an opinion about Wal-Mart.

The most surprising part of this film for me was when Wal-Mart would not accept Rubbermaid’s price increases. Rubbermaid needed to increase their prices because the price of resin had increased and if they did not raise their prices then they would lose money, a lot of money. Wal-Mart would not accept their increase and put fewer Rubbermaid products on their shelves. This was the first sign of the decline of Rubbermaid. This was most surprising to me because Wal-Mart acted like a bully against Rubbermaid and would not accept their price increase, leading to the downfall of Rubbermaid.

Wal-Mart’s strategies clearly work for them. I do not like Wal-Mart’s strategies, believe in them or think that they are ethical. The truth of the matter is, Wal-Mart will do what they have to do in order to get the lowest prices that allow them to have the highest mark-up possible. A strategy that Wal-Mart uses is that they put three or more suppliers in a room together and Wal-Mart asks who has the lowest price for a certain item. The manufacturer that can make that item at the lowest price will get that order. This is a high stress situation and in a way a bully technique that Wal-Mart uses because each manufacturer will keep lowering their prices in order to beat the other manufacturers. All in all, Wal-Mart is once again acting like a bully in to get their way and benefit themselves.

Jobs that are created as a result of outsourcing are overseas in the manufacturers there. Also, since Wal-Mart is known for having ‘low prices’, the money people save at Wal-Mart is money that they can spend elsewhere. People will spend their excess money of food, toys, outer appearance, etc. The jobs that are eliminated as a result of outsourcing involve working in a plant of some sort, like Rubbermaid. When Rubbermaid shut down, 1,000 people lost their jobs.

Wal-Mart’s price policies are to benefit Wal-Mart, not their consumers. The price policies benefit Wal-Mart because Wal-Mart searches to buy the product at the lowest price possible and then they mark it up as much as they can and gain profit. Also, Wal-Mart displays what they call the ‘opening price’ which is an item that is selling for a really good deal. This item will be strategically placed at the beginning of each isle which draws the customer into believing that every item is the lowest price, but in all actuality, the other items are not the lowest prices out there.

This documentary has shown me many things about Wal-Mart, many that I believe are negative, but I would say that I am still going to shop at Wal-Mart. While I understand why some people are strictly against shopping there, I will just be aware of their pricing techniques and try to buy intelligently. Wal-Mart has benefited from Wal-Mart, their pricing techniques and their strategies may not be ethical and fair, but they work and they bring Wal-Mart money. I believe the consumer has not fully benefited from Wal-Mart because they are tricked into believing that all Wal-Mart’s pricing is low, when in all actuality that is false. I also believe the plant workers in the U.S. have not benefited from Wal-Mart because Wal-Mart is constantly outsourcing and leaving plants like Rubbermaid in the dust.

I understand why Wal-Mart is operating and outsourcing the way they are. The way Wal-Mart is running right now allows them to balance the needs for worker benefits, low prices for consumers and high profits for shareholders the best that they can. Trying to balance all three of these things are not easy and Wal-Mart is doing that the only way they know is possible right now which is outsourcing. In order to keep low prices for consumers but also high profits for the shareholders, they must outsource. If they keep all of their suppliers in the U.S. then the price of their goods will raise and their profits may decrease. Even though I do not like Wal-Mart’s ways right now, I understand that they are trying to balance three very tricky things and if one is affected then they all are affected. All in all, I understand why Wal-Mart is operating the way it is and I do not believe there is any way of changing that unless one of the three parts are not balanced.