Wal-Mart Essay

11319 Words Sep 4th, 2011 46 Pages
The Grassroots Battle: Wal-Mart Supercenter Rosemead
Stephen J.J. McGuire, Christine Chueh, Tia Mao & Isela Mercado California State University, Los Angeles

September 11, 2008

Wal-Mart, founded in 1962 in Rogers, Arkansas, was the largest retail chain in the world. Its growth was derived from a wide range of competitive advantages, such as Wal-Mart’s sophisticated use of information technology to keep track of and reorder items, the use of “Just-in-Time” shipments of merchandise from distribution centers that eliminated the need for costly in-store inventory storage2, and the sheer economies of scale it achieved compared to its rivals. Wal-Mart also exploited “economies of density” to make the most of its centralized distribution
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Wal-Mart was accused of employing “bullying tactics” in establishing its Supercenters. To gain support for its opening in Rosemead, Wal-Mart established and funded two grassroots organizations (Rosemead PRIDE and Rosemead Neighbors against the Recall) to deflect the community’s opposition as well as support the City Council members who favored the Supercenter. Wal-Mart built its success through a variety of innovative business and market strategies which enabled it to gain competitive advantages over its competitors. Yet the aggressive advocacy of its business called into question the company’s corporate social responsibility when faced with community opposition. Rosemead, California was a forum where corporate responsibility issues came to the forefront. Was Wal-Mart good for the Rosemead community? Did the Rosemead community respond appropriately to Wal-Mart’s arrival? Should Wal-Mart be held accountable for the demise of small business rivals? Was it unethical for Wal-Mart to establish its own grassroots organizations to shape public opinion? ___________________________
1 The authors acknowledge contributions to a previous version of this case by Purvi Patel and Christian Que, as well as edits and answers to discussion questions by Mallory Barnes and Inocencia Cordova, all graduate students at California State University, Los Angeles. The case was prepared based on publicly available information and interviews, and is intended to serve

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