Wal-Mart – Page 2 – artdiamondblog.com

Entrepreneur Sam Walton Sought to Learn from Others

(p. 40) So where is Ames at the time of this writing, in 2008?
Dead. Gone. Never to be heard from again. Wal-Mart is alive and well, #1 on the Fortune 500 with $379 billion in annual revenues.
What happened? What distinguished Wal-Mart from Ames?
A big part of the answer lies in Walton’s deep humility and learning orientation. In the late 1980s, a group of Brazilian investors bought a discount retail chain in South America. After purchasing the company, they figured they’d better learn more about discount retailing, so they sent off letters to about ten CEOs of American retailing companies, asking for a meeting to learn about how to run the new company better. All the (p. 41) CEOs either declined or neglected to respond, except one: Sam Walton.
When the Brazilians deplaned at Bentonville, Arkansas, a kindly, white-haired gentleman approached them, inquiring, “Can I help you?”
“Yes, we’re looking for Sam Walton.”
“That’s me,” said the man. He led them to his pickup truck, and the Brazilians piled in alongside Sam’s dog, Ol’ Roy.
Over the next few days, Walton barraged the Brazilians with question after question about their country, retailing in Latin America, and so on, often while standing at the kitchen sink washing and drying dishes after dinner. Finally, the Brazilians realized, Walton-the founder of what may well become the world’s first trillion-dollar-per-year corporation-sought first
and foremost to learn from them, not the other way around.

Source:
Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.

Corruption, Inefficiency, Inflation and Bad Policies Lead to Decline in Foreign Investment in India

Source of graph: online version of the NYT article quoted and cited below.

(p. B1) While inefficiency and bureaucracy are nothing new in India, analysts and executives say foreign investors have lately been spooked by a highly publicized government corruption scandal over the awarding of wireless communications licenses. Another reason for thinking twice is a corporate tax battle between Indian officials and the British company Vodafone now before India’s Supreme Court.

Meanwhile, the inflation rate — 8.2 percent and rising — seems beyond the control of India’s central bank and has done nothing to reassure foreign investors.

And multinationals initially lured by India’s growth narrative may find that the realities of the Indian marketplace tell a more vexing story. Some companies, including the insurer MetLife and the retailing giant Wal-Mart, for example, are eager to invest and expand here but have been waiting years for policy makers to let them.

For the full story, see:
VIKAS BAJAJ. “Foreign Investment Ebbs in India.” The New York Times (Fri., February 25, 2011): B1 & B6.

(Note: the online version of the article is dated February 24, 2011.)

Banks Try to Suppress Competition Through Federal Finance Regulations

“Banco Wal-Mart plans to open more than 160 branches in Mexico this year.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B2) Banco Wal-Mart plans to open more than 160 branches in Mexico this year, nearly doubling its presence south of the border. Wal-Mart Canada Bank also opened this month. It is offering a credit card and may make loans, including mortgages.

As Wal-Mart has done with retail in America, a Wal-Mart bank could be a disciplining force in keeping down costs for customers. It could also act as an engine of credit creation for a significantly underbanked subset of the American populace.
The Federal Deposit Insurance Corporation estimates that 60 million Americans, most of them low-income, are underserved by local community banks and wind up using usurious check cashers, payday lenders and pawnbrokers for financial services.
. . .
As part of the financial reform legislation, bankers have supported a three-year freeze on new applications for industrial loan corporations, the charter Wal-Mart would need.
That runs contrary to the supposed spirit of reform that seeks to empower and protect consumers. Greater competition, coupled with sounder regulatory supervision, would help accomplish that. And Wal-Mart could be its catalyst.

For the full commentary, see:
ROLFE WINKLER, ROB COX and MARTIN HUTCHINSON. “Reuters Breakingviews; The Halls of Finance Fear Wal-Mart.” The New York Times (Thurs., June 24, 2010): B2.
(Note: the online version of the article has the date June 23, 2010.)
(Note: ellipsis added.)

Chicago’s South Side Welcomes Wal-Mart: “The Audience Stood and Cheered”

“Supporters of a proposed Wal-Mart store in Chicago demonstrated at a City Coumcil zoning panel hearing Thursday.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B4) “We need jobs for our neighborhood, and Wal-Mart is willing to come, and they’re willing to provide the jobs,” said the Rev. Dr. D. Darrell Griffin, the pastor at Oakdale Covenant Church.

Politicians who supported the Wal-Mart store said they did so in part because of employment and revenue for the city.
“There are major corporations willing to invest significant money within our communities, which has not been done, really, since the ’60s, when a lot of the corporations left the communities after the riots,” said Howard B. Brookins Jr., a member of the council. “This is huge for us.”
. . .
On Thursday, the zoning committee meeting was filled with about 200 onlookers wearing T-shirts with the Wal-Mart logo and slogans like, “Our neighborhood. Our jobs. Our decision.”
Before he asked for a simple yes or no vote, Daniel Solis, chairman of the zoning committee, told the crowd, “We are now the model in this country.”
After the unanimous vote — which sends the proposal to the full City Council, where it is expected to pass next week — the audience stood and cheered.
“It’s going to bring jobs and help the community,” Shawn Polk, 20, a college student who lives near the proposed store, said afterward.

For the full story, see:
STEPHANIE CLIFFORD. “Wal-Mart Gains in Its Wooing of Chicago.” The New York Times (Fri., June 25, 2010): B1 & B4.
(Note: the online version of the article is dated June 24, 2010.)
(Note: ellipsis added.)

Farmers in India Like Wal-Mart

“Mohammad Haneef, [above], a farmer in Haider Nagar, said that Wal-Mart is better than his previous clients. “You have to establish trust,” he said in Hindi. “Wal-Mart has been paying on time. We would just like them to buy more.”” Source of caption and photo: online version of the NYT article quoted and cited below. (Note: bracketed word added.)

(p. B1) HAIDER NAGAR, India — At first glance, the vegetable patches in this north Indian village look no different from the many small, spare farms that dot the country.

But up close, visitors can see some curious experiments: insect traps made with reusable plastic bags; bamboo poles helping bitter gourd grow bigger and straighter; and seedlings germinating from plastic trays under a fine net.
These are low-tech innovations, to be sure. But they are crucial to the goals of the benefactor — Wal-Mart — that supplied them.
Two years after Wal-Mart came to India, it is trying to do to agriculture here what it has done to industries around the world: change business models by using its hyper-efficient practices to improve productivity and speed the flow of goods.
. . .
(p. B3) Here in Haider Nagar, in the bread basket state of Punjab, farmers who supply vegetables to Wal-Mart say they like working with the company. It typically pays them 5 to 7 percent more than they earn from local wholesale markets, they said. And they do not have to pay to transport produce because Wal-Mart picks it up from their fields.
Abdul Majid, who sells cucumbers to Wal-Mart, says his yields have risen about 25 percent since he started following farming advice about when to apply fertilizers and which kinds — more zinc, less potash — from the company and its partner, Bayer CropScience.
Mohammad Haneef, a farmer in a nearby village, said he had sold to two other companies before Wal-Mart, but one shut down and the other cheated him and paid him late. Wal-Mart is much better, he said, but its buyers are picky, taking the best vegetables and leaving him with inferior ones that he still must truck to wholesale markets.
“You have to establish trust,” he said in Hindi. “Wal-Mart has been paying on time. We would just like them to buy more.”

For the full story, see:
VIKAS BAJAJ. “Cultivating a Market in India; Wal-Mart Nurtures Suppliers as It Lays Plans for Expansion.” The New York Times (Tues., April 13, 2010): B1 & B3.
(Note: ellipsis added.)
(Note: the online version of the review is dated April 12, 2010 and has the title “In India, Wal-Mart Goes to the Farm.”)

Medicare Pays $110 for Walker that Wal-Mart Sells for $60

Source of table: online version of the NYT article quoted and cited below.

(p. C1) On Wal-Mart’s Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it’s a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare.
But Medicare and its beneficiaries aren’t paying $59.92 for the Explorer or any similar walker. In fact, they’re not paying anything close to it. They are paying about $110.
. . .
(p. C5) In the abstract, fixing the health care system sounds perfectly unobjectionable: it’s about reducing costs (and then being able to cover the uninsured) by getting rid of inefficiency and waste. In reality, though, almost every bit of waste benefits someone.
Doctors who perform spinal fusion surgeries, despite decidedly mixed evidence that they’re effective, are making a nice living. Hospitals that order $1,000 diagnostic tests, even when a cheaper one would work just as well, are helping their bottom line. Medical equipment makers selling walkers for $110, while Wal-Mart sells them for $60, are fattening their profits.
The current fight to protect those profits is a microcosm of what you can expect to see if a larger effort to rein in health costs ever gets going. The defenders of the status quo won’t say that they are protecting themselves. Instead, they’ll use the same arguments that the medical equipment makers are using — that a change will destroy jobs, bankrupt small businesses and, above all, harm patients.
. . .
But this is a case in which the market can clearly do a better job than a government-mandated fee schedule. Just look at Wal-Mart’s Web site or, for that matter, the bids that Medicare has already received.
By standing in the way of this competition, Congress is really standing up for higher health care costs.

For the full commentary, see:
DAVID LEONHARDT. “ECONOMIC SCENE; High Medicare Costs, Courtesy of Congress.” The New York Times (Weds., June 25, 2008): C1 & C5.
(Note: ellipses added.)

Obama Top Economist Likes Wal-Mart and Sees Improved Worker Living Standards

(p. C1) Acting quickly after securing his party’s presidential nomination, Barack Obama picked a well-known representative of Bill Clinton’s economic policies as his economic policy director and signaled this week that the major players from the Clinton economics team were now in his camp — starting with Robert E. Rubin.
Senator Obama, Democrat of Illinois, hired Jason Furman, a Harvard-trained economist closely associated with Mr. Rubin, a Wall Street insider who served as President Clinton’s Treasury secretary. Labor union leaders criticized the move, and said that ”Rubinomics” focused too much on corporate America and not enough on workers.
. . .
(p. C4) Mr. Furman, who served for a while as a special economic adviser in the Clinton administration, has taken some controversial positions. He argued in 2005, for example, that Wal-Mart, despite its conflicts with organized labor over pay and health insurance, was a good business model.
More recently, he argued that while the typical worker suffers from inadequate income, that worker’s living standards, broadly measured, are higher today than those of their counterparts 30 years ago — an argument in dispute among economists.
. . .
Until now, Austan Goolsbee, an economist at the University of Chicago, had been Mr. Obama’s chief economic adviser. He remains an unpaid adviser. He said he was not a candidate for Mr. Furman’s full-time job because of his university duties.

For the full story, see:
LOUIS UCHITELLE. “Union Critical of Obama’s Top Economics Aide.” The New York Times (Thurs., June 12, 2008): C1 & C4.
(Note: ellipses added.)

Wal-Mart Designs Health Care Around the Needs of Consumers

“Alicia Ledlie, senior director of health business development for Wal-Mart, said walk-in medical clinics would look like the mockup behind her, in a warehouse in Bentonville, Ark.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C4) Moving to upgrade its walk-in medical clinic business, Wal-Mart is set to announce on Thursday plans for several hundred new clinics at its stores, using a standardized format and jointly branded with hospitals and medical groups.
. . .
Walk-in medical clinics are a growing industry, with numerous competitors that include big-box retailers, drugstores and even grocery chains around the country. Industry executives say 1,500 to 1,800 clinics will be open by the end of the year.
Propelled by the drugstore chains CVS and Walgreens, by far the biggest sponsors of the clinics to date, more than 700 clinics have opened in the last 15 months. But the business model is unproven so far.
Few, if any, clinics are profitable, according to industry analysts, and only a handful have broken even on daily operations. Most have been open a year or less, and executives say it takes up to three years for a clinic to become profitable enough to recover start-up costs.
Medical societies are inclined to be skeptical of the clinics. The American Academy of Pediatrics opposes them, saying they add to fragmentation in the health care system.
Dr. Edward Zissman, a pediatrician in central Florida, said he had qualms about hospitals that hook up with the clinics. “Putting their name on a product that I don’t think has the highest quality,” he said, “is going to cost them dearly with physicians.”
The American Academy of Family Physicians and the American Medical Association have set forth principles for clinics to observe, including sending patients’ medical record to their doctors and finding doctors for patients who do not already have them. Most states require varying degrees of physician supervision of the clinic nurses. Clinic operators say they are complying.
Many patients have said they like the convenience of the walk-in clinics’ weekend and evening hours, the short waiting times to see a nurse practitioner, and the posted price lists for a limited menu of care like tests and prescriptions for sore throats and ear infections and seasonal flu shots.
. . .
“The clinics are the latest big example of how you could think about consumers and what their needs are, rather than a health care system exclusively designed around the needs of providers,” said Margaret Laws, director of an innovations program at the California Health Care Foundation, an independent group that finances health policy research.

For the full story, see:
MILT FREUDENHEIM. “Wal-Mart Will Expand In-Store Medical Clinics.” The New York Times (Thurs., February 7, 2008): C4.
(Note: ellipses added.)

“The design of the Wal-Mart medical clinic is intended to look like a doctor’s office, complete with the usual medical hardware.” Source of caption and photo: online version of the NYT article quoted and cited above.

Why New York City Needs Wal-Mart

(p. 7) . . . an enduring mystery of the retail economic world: why don’t people in New York City want a Wal-Mart in Midtown?

Manhattan is the most underserved market I have ever seen for retail customers. There really is nowhere for bargains on ordinary household goods and groceries in the whole borough. Yes, I know unions hate Wal-Mart. But not every New Yorker is in a union, and every New Yorker needs food and paper towels. (I, by the way, am a member of three unions: the Screen Actors Guild, the American Federation of Television and Radio Artists, and the Writers Guild of America, West. How many unions is Mayor Michael Bloomberg in?)

Don’t the consumers deserve a break, too? I know Wal-Mart is not hip, slick and cool. It’s for people who have to live within a budget, not for people who see movies with subtitles and have houses on Martha’s Vineyard (or would like to). But don’t working-class people deserve bargains on their daily bread?

To keep Wal-Mart out of New York — or my home, Los Angeles — is simply to inflict a snobby class prejudice on working people. Why they and their representatives put up with this classist, ”let them eat Whole Foods” nonsense is yet another mystery, and one that could be solved if politicians really cared about consumers.

For the full commentary, see:

BEN STEIN. "EVERYBODY’S BUSINESS; Assorted Mysteries of Economic Life." The New York Times, Section 3 (Sun., May 13, 2007): 7.

(Note: ellipsis added.)

Investor Wally Weitz Defends Wal-Mart

(p. 1D) Weitz was able to deliver good news to about 200 shareholders in his investment company, Wallace R. Weitz & Co., at the firm’s annual meeting at the Scott Conference Center in Omaha.

The flagship Value Fund grew 18.3 percent in the fiscal year ended March 31, compared with the Standard & Poor’s 500’s 11.8 percent. The Value Fund accounts for more than $3 billion of Weitz & Co.’s $6.5 billion in assets.

. . .

(p. 2D) Wal-Mart Stores Inc. is among the companies Weitz has invested in, and one investor asked about controversy that company has faced in recent years. Weitz said a lot of negative publicity has resulted from Wal-Mart’s huge scale, its ability to obtain less expensive products overseas, its efficient use of technology and its low prices driving competitors out of business.

Low prices that discount stores offered years ago brought them similar criticism, he said.

"It’s one of those progress things," Weitz said.

For the full story, see:

Joe Ruff. "Weitz not interested in Buffett position." Omaha World-Herald (Wednesday, May 23, 2007): 1D-2D.

(Note: ellipsis added.)

Anti-Wal-Mart is Anti-Free-Choice

Source of logo/header: http://www.muddycup.com/mudlane/img/header.jpg

The article excerpted below reveals the soul of much of the anti-Wal-Mart movement. It is not anti-big; it is anti-competition and anti-free-choice.

How in the world did a guy who started his first coffee shop on Staten Island six years ago and now runs five others in far-flung Hudson Valley towns become the moral equivalent of Wal-Mart and Starbucks? “Well, it’s now official,” he announced last month on the Web site that promotes his Muddy Cup coffeehouses. “I am now head of the evil empire.”

. . .

And now the talk of New Paltz has to do with something far more important than mere marriage — coffee. More specifically it’s whether Mr. Svetz is plotting an act of entrepreneurial imperialism by presuming to open one of his Muddy Cup coffeehouses next door to the ultimate green icon in town, the funky 60 Main coffee shop operated in conjunction with the nonprofit New Paltz Cultural Collective.

. . .

Little did he know. As word filtered out he began receiving a blizzard of e-mail messages from 60 Main proponents, reacting to an urgent appeal from the collective. The messages threatened a boycott and told him to stay home. “If we can stop Wal-Mart we can stop you,” said one.

“We do not want to become yet another small town taken over by huge corporations,” read another.

. . .

Mr. Svetz is still stunned by the whole thing, particularly his sudden status as a giant corporation. He says that just as lots of bars coexist in town, several coffee shops can too. Maybe he’s right. Maybe he’s not. He’s not Wal-Mart, but maybe it’s fair to ask how many artist-friendly coffeehouses the village can support. But it’s hard to argue when he says that even in New Paltz, businesses generally have to compete to survive, not find a way to build a Berlin Wall around town.

“When a community starts building walls and saying you don’t belong here or you don’t think like we do, that can’t be a good thing,” he said.

For the full story, see:

PETER APPLEBOME. "Coffee Puts Laid-Back Town on Edge." The New York Times, Section 1 (Sun., March 4, 2007): 21.

(Note: ellipses added.)