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Wal-mart Green Strategy
November 2, 2007

Wal-mart Green Strategy

Andrew Ruben, vice president of strategic planning for the world's biggest retailer, leans across the table and pleads passionately for consumers to embrace the compact fluorescent light bulb. Though a CFL bulb costs more, it uses 75% less energy and lasts 10 times longer than a regular bulb. The $312.4 billion retailing giant has launched an aggressive program to encourage "sustainability" of the world's fisheries, forests and farmlands, to slash energy use and reduce waste, to push its 60,000 suppliers to produce goods that don't harm the environment, and to urge consumers to buy green. Last Monday, for the first time, Wal-Mart reported on its carbon dioxide emissions — the "greenhouse gases" that cause global warming. It said it emits 20.8 million tons worldwide, an amount greater than what's released by an auto company but much less than that released by a major utility company. Already, Wal-Mart has become the world's largest buyer of organic cotton. It introduced "fair trade" coffee at its Sam's Clubs. It began selling some organic foods in the spring and will introduce others this fall. And it is pushing suppliers to use smaller packages to cut waste.

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Critics such as WakeUpWalMart call the efforts "green-washing." They say the efforts are an attempt to polish a corporate image tarnished by controversies over low pay and limited health care benefits for its employees and "anti-big-box" feelings in some towns. But many environmentalists are ecstatic. Wal-Mart is a very big rock to throw into the pro-environment pond, and its ripples, they say, will be felt across the globe. Wal-Mart has attempted to address the concept of sustainability by adopting various changes to their corporate directives. The companywide agenda will see drastic changes to business practices, stressing an environmental responsibility and an opportunity to become a corporate leader for green initiatives in the future. Striving to be a global leader in sustainability has increased Wal-Mart’s creativity with regards to new building design technologies, increased learning potential with an aptitude for new ideas, and enhancing the overall pride for all stakeholders. Due to its market scale and global influence, changes to corporate policies in terms of green initiatives will have an exponential impact all over the world. Wal-Mart can influence the creation of clean technology markets for companies that exist, but have yet to establish themselves globally. Wal-Mart is in a unique position to influence suppliers, logistics, manufacturers, government officials, communities, and the end consumers with the Sustainability 360 program. On a weekly basis, Wal-Mart is capable of influencing over 176 million customers in store located in 14 different countries worldwide. As a major global business, Wal-Mart hopes that this program will promote restorative practices not only for competitors in the retail industry, but across various major industries.

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Many of Wal-Mart’s key objectives have long-term completion dates. These goals need to be constantly monitored and measured to convey effectiveness. Results of these various objectives will influence Wal-Mart’s decision making with regards to expansion, supplier use, product line development, packaging, and corporate direction. These results will also influence Wal-Mart’s market interactions with other industries and the impact on the overall environment. Wal-Mart is not the only corporation to undertake a companywide change towards green strategies. Other major corporations have begun to take notice of the importance of the environmental problems taking place worldwide and have made conscientious efforts to make business practice changes. Industrial cities and developing countries are also striving to follow suit with assessments of environmental footprints, resource management, waste production, and air quality regulations. Change will take place slowly, but change will happen. Positive changes will have multiplier effects if initiated by large corporations with strong leadership and market influence. Green products are only the beginning. New product lines are popping up everywhere for each corporation as the green movement will continue to influence the ever-changing economy. Green initiatives are major business decisions that some corporations have been willing to embrace, while others remain apprehensive to wholesale changes.

Since future generations of environmentally conscious consumers will influence the need for major investments into green strategies for social, economic, and government participants worldwide, positive changes towards green initiatives will continue. Sustainability will be the concept that will push these initiatives to fruition for many years, providing the best possible outcomes for our current generation and for our future.

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Based on the overview of Wal-Mart’s market and financial strategies, it is believed that the company has the potential for significant future growth. In the U.S., growth will be driven primarily by the super center format and to a lesser extent by the smaller Neighborhood Market concept for more affluent and urban markets. Wal-Mart has made the first steps in revamping its stores, merchandise and image to bring them more up-to-date and to reach beyond its traditional core customer base. Global markets such as China and India also provide huge potential for growth.

Resources

Greg Schneider and Dina ElBoghdady; Stores Follow Wal-Mart's Lead in Labor; Competitors. The Washington Post; Nov 6, 2003.

JANE BRISSETT; Wal-Mart's growth looms over grocery contract talks:.Duluth News Tribune; Apr 14, 2005.

JACKSONVILLE,  Labor Board Complaint Outlines Wal-Mart 'Full-Court.US Newswire; Oct 1, 2001.

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