The Retail Revolution (2009)

TRRFirst God, then family, then Wal-Mart!”- The Retail Revolution: How Walmart created a brave new world of business (2009) by Professor Nelson Lichtenstein is an interesting book about Walmart, the lagest retailer worldwide.  Professor Lichtenstein is a professor of history and director of the Center for the Study of Work, Labor, and Democracy at the University of California- Santa Barbara.    

The book is about 300 pages and covers a lot of ground. The (brief) first part of the book is about the creation of Walmart and how the idea of Walmart was rooted in Sam Walton’s earlier experiences. The second part of the book shifts towards discussing the ‘unethical-like’ practices at Walmart, especially with hiring and promotion of women, labor relations, and employee retention. The last part of the book is about Walmart’s relevance and ability to compete effectively in the new, 21st century, globalized world.

There is no dearth of books on Walmart, as one can imagine! The USP of Professor Lichtenstein’s book is that it is quite up-to-date (even provides some examples from after the current eceonomic crisis started), does a decent job discussing Walmart’s relationship with China, and describes events and stories in a reader-friendly fun style. It also spends only a little time discussing how Sam Walton created Walmart (a story that has been told many times before).   Students of business, particularly those who want to understand the retailing industry better, would benefit from reading this book.



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83 responses to “The Retail Revolution (2009)

  1. Ashley J Norbom

    The beginning sections of “The Retail Revolution” detail the early stages of Sam Walton’s career, focusing on each step in the career that led him to build the retail giant. Because the narrative begins prior to Wal-Marts creation, the bulk of Sam’s more “questionable” actions and beliefs are thus far untold, providing the reader with the ability to first understand and appreciate his genuine business savvy. Walton did not merely aim to recreate the type of retail stores he had previously been employed, but hoped to build one that is bigger and better than any competitior. He implemented a consistent effort to decrease inefficiencies in every stage of the distribution channel. For example, upon discovering the inefficiency of consistanly immobile stock, “Walton was determined to keep his commodities in motion” (38).

    Wal-Mart the company is an exemplification not only of Sam’s capacity within business, but also his overall lifestyle. As much as it details the business structure of the company, the novel spends similar effort describing the companies culture, and its development through the ideals of its founder. One notable instance centers around the companies underlying emphasis on Evangelical Protestantism which has “embedded in Wal-Mart’s corporate culture” (73). Though not directly affiliated with the bible, its interesting to learn of the many biblical principles that can found within the Wal-Mart atmosphere.

    It is during these early stages that the company and Sam Walton are relatively synonymous. As my reading continues, I am interested to see how the two will disentangle in perception, with Wal-Mart coming into its role as the retail giant.

  2. Pei-Ying,Lee

    In the chapter, we can see the track of history about traders and jobbers. For centuries, merchants have been dominating our society and commerce in many ways since they have power over the distribution of goods. Also, historical events could have significant impact on commercial activities, such as Civil War, World War I. We can see that business in America transformed to be dominated by iron mater, meatpacker, etc, after civil war. There was a change of selling pattern due to railroad and technology. Walton sensed the interaction between environment, and between suppliers and consumers, and grasped the chance to make some difference.

    It is worthwhile to have a clear trade of how business works in history. Since the environment might change but some critical human characteristics and behavior would not. We can learn from what already happened to enhance our business strategy. Also, I think it is important for a successful business man to have vision and use his resource properly.

  3. Pranav Kaluskar

    “The Retail Revolution” is a book authored by Nelson Lichtenstein and talks about how Wal-Mart created a new world of business based on its efficient adaption of supply chain concepts and new technology. The book explains how Wal-Mart, America’s largest and most controversial company, roared out of an isolated corner of rural South to become the vanguard of a retail revolution.
    Sam Walton established Wal-Mart stores in rural areas where delivery of goods from wholesalers was inadequate to satisfy the growing customer demand. To rectify this, they built distribution centers. These DCs were located so that the average distance of Wal-Mart stores from a DC was small. This ensured faster shipping and lower costs. Another integral part of Wal-Mart’s success was its adoption of technology. Use of bar codes ensured efficient inventory tracking. With more and more companies now depending upon Wal-Mart for sale of its products, it gave Wal-Mart strong buying power. Wal-Mart puts a lot of emphasis on its corporate culture. From the times of agricultural revolution to the racial program of 1970s and furthermore, Wal-Mart has played a major role in many communities by employing large percentage of women and African Americans. Despite all this, Wal-Mart has its fair share of detractors. They claim Wal-Mart’s culture too be communal, with strict work regime emphasizing discipline and hierarchal authority.
    Sam Walton is a shrewd entrepreneur. Instead of outsourcing transportation, he built his own system. Coupled with adoption of newer technologies over a period of time, he built an extremely lean and efficient distribution model. He made shrewd deals with suppliers and thus always kept costs lower than his competitors.

  4. Hsin-Yu Song

    It is so surprising that Sam Walton built his retailing empire in one of the most rural and economically underdeveloped city in United States at the beginning. In Asia, most people want to choose the biggest cities or the hottest areas to start their businesses. Because these prosperous areas are somewhat secure the revenue and secure the businesses. In the introduction, it outlines the implications and the scope of Wal-Mart’s rise. Lichtenstein compares Wal-Mart to some of the most important commercial groups in modern history including the Dutch East India Company, the Detroit automakers of the 20th century, and the 19th century British textile manufacturers. Lichtenstein points out how Wal-Mart has changed the culture and economy in China and America and how the ‘retail revolution’ has tied these two super-power nations together. Personally I find what he has written to be very true as I have seen both the vast manufacturing districts in Southern China and the many ‘Big Box’ stores in America. So I have been able to notice firsthand the impact that Wal-Mart and stores like it have had in shaping the commercial world.

  5. Joann Lew

    The development of Wal-Mart’s company culture and the extreme loyalty are two aspects that have grasped my attention the most so far in this book. It is amazing how much employees and consumers find themselves locked within the Wal-Mart name, that the attitudes towards the mega-retailer seem cultish. The book gives us numerous examples of employees who make Wal-Mart their life. They work at Wal-Mart, shop at Wal-Mart, and defend anything in Wal-Mart’s name. Even when they try to switch jobs and move to another company, somehow they are drawn back to Wal-Mart, even if they have to start from the bottom of the chain again. The book emphasizes how Wal-Mart becomes a second family or home to its employees, but in some of these examples, it gives the impression that Wal-Mart becomes a large part of the person’s identity. There is so much satisfaction in depending on the existence and success of Wal-Mart that is expressed within the employees.

    This loyalty is also demonstrated with consumers. Everyone can agree with the low price guarantee that has become synonymous with Wal-Mart, but there are a couple of examples where whole families are extremely grateful for the affordability that the retailer provides. While not all consumers may go through the same lengths in defending Wal-Mart’s culture, they still support Wal-Mart with their wallets, despite their personal attitude. The name and culture of Wal-Mart now generates so much reaction, positive and negative, because of its size and omnipresence over a vast majority of retail categories. Some consumers are fearful of the power and command the retailer has in the market. Some consumers will find everything right with how Wal-Mart operates. Regardless of these various viewpoints, consumers from all parts of this attitude spectrum ultimately still shop at Wal-Mart. This shows that Wal-Mart is almost completely impervious to negative attitudes because the retailer is still receiving business from those who feel pessimistic about shopping there.

  6. Joshua Hollander

    The arrival of the “Retail Revolution” as articulated by Nelson Lichtenstein was influenced by the creation of Wal-Mart in the mid to late 20th century. In his introduction, Lichtenstein describes how automobiles drove the US economy throughout the late 19th and mid 20th centuries through companies such as GM, Chrysler, Ford, US Steel, and Standard oil of NJ. It was not until entrepreneurs, such as Sam Walton, founder of Wal-Mart, began to show the world that the retailing industry was not just something Americans would put last on their agenda. Through his experience working with Butler Brothers and other endeavors, Walton began learning from others mistakes and continued to expand with the aid of competition with other retailers such as K-Mart. From distributing products through distribution centers rather than warehouses, to analyzing data through bar codes for productivity ,Walton challenged the assumption that a large population was needed for a retail store to remain successful.
    In retrospect, it is very interesting how Wal-Mart has gained the power to become a somewhat puppeteer of companies such as Procter and Gamble. Products from these type of companies failing to make the Wal-Mart shelves could potentially make or break the company, giving Wal-Mart an unnecessary demand power. It will be interested to see how Lichenstein begins to explain the inner the workings of Wal-Mart. In terms of the company’s image, Lichtenstein has presented a positive one. However, a good book will always present both a positive and negative side in order for the reader to make their own assessments.

  7. Mayank Goel

    “The Retail Revolution” by Nelson Lichtenstein tries to summarize the life of the Retail business by focusing on the company which revolutionized the industry – WalMart.

    It starts with painting a picture of the world of business before the existence of the retail giant. It describes businesses and the industries which were the dominant colors in this picture. Companies like GM which once comprised of 3% of America’s GDP-much higher than what WalMart is today. Companies like U.S. Steel, Exxon Mobile and Ford. Retailers were not even considered for a place in the Fortune 500 companies.

    But then there was a visionary who rattled the way business was done. Sam Walton-the man who revived the fate, and gave retail business a reputation of its own. His company-WalMart, not only gave retailers an entry into the Fortune 500 list of companies, has constantly been at the top of the list from 2002 till now (except for 2006). Living in the small suburb of Bentonville, with a vision of serving people with a modest income level, he envisioned and with strong determination brought to life a store which now stands for the modern industry of our times. From one moderate store in Bentonville WalMart now boasts of more than 6,000 stores.

    It talks about how Sam Walton was constantly looking for opportunities to live his dream and made use of economic, social and political developments over the decades. How he went against the contemporary norms by creating his own internal policies for labor and unionization. He learnt from each and every retailer of the time and grasped every minute detail and magnified its use to help him create WalMart. For instance, he used barcodes, which was a meager concept used by departmental stores, to have a complete control over the operation of his stores and warehouses.

    The credit for the success of WalMart doesn’t go to a Cinderella story. WalMart has constantly been under fire from various state authorities and public welfare forums. Till now the company has been going strong and as I read on, I am looking forward to see how, as strong a giant company as WalMart, fights back and stand tall against all odds.

  8. Jeff Stark

    I found it interesting how Retail Revolution begins by discussing the immense power that retails have. In the first pages Nelson Lichtenstein talks about how retails, including Wal-Mart, control over half of all world trade. He goes on to talk about how Wal-Mart in particular has such power over their supplies that “vendorville” has been set up in Bentonville, with companies such as Johnson & Johnson, Levi Strauss, and Proctor & Gamble. Their power is not just present here in America, when Lichtenstein visited Yantian International Container Terminal in Shenzhen a port official said “Wal-Mart is kind.” Wal-Mart has been #1 on the Fortune 500 list since 2002 and has held that rank since with the exception of 2006. One of the most astounding achievements for Wal-Mart has been the size amount of power they have gained in less than 50 years as a company. With their power comes the ability for Wal-Mart to squeeze every cost out of their suppliers. With over 60,000 vendors who are dependent on the store, Wal-Mart is able to make demands of their supplies that the average retailer couldn’t think of making.

    Along with Wal-Mart’s power come the challenges that only the biggest companies face. When trying to open a new store Wal-Mart finds itself battling zoning commissions, city councils, and local merchants. In addition to these challenges, Wal-Mart is also constantly facing class-action lawsuits, some of which involve race and gender discrimination, or health and safety standards.

  9. Frank Puoplo

    An apology in advance: To any that I may offend with my opinions of Walmart, I do apologize, but feel free to make an attempt to debunk me of my conspiracy theories and blatant hatred of this corporation. Although I will say that any attempt will have little chance of success.
    The Retail Revolution, a surprisingly enjoyable read focuses on the exploits of Sam Walton and his seemingly unstoppable engine of discount sales and supposedly staffed by the ever-smiling cultists that worship Walton’s empire. Lichtenstein begins the book in a manner that reflects his background as a historian, with a lesson in early American industrial history and progressing to the mess that is today’s modern economy. He then moves on to a brief biography of the early life of “Mr. Sam”, as Lichtenstein often refers to Walton. Although much of this information on Walton’s beginnings are well known and may seem to be a repeat of every other writing on Sam’s life, one thing Lichtenstein does well is to briefly mention things that Walton did to educate himself as an entrepreneur about the industry and any similar business concepts that may have existed prior to his ascension to power. The reference to Kmart as Walton’s laboratory was definitely a great insight into Walton’s competence as an entrepreneur and taking no risk in performing his research, unlike so many other business owners and operators. Utilizing small details such as these, Lichtenstein presents Walton’s business mind rather than what became his code of conduct for the success of Walmart, namely buy low, sell low, and use your position to gain an almost immoral stranglehold on every external source necessary to your success. After that statement, I feel like I need to say that I DO respect Sam Walton for everything that he has created. He maintained the cutthroat edge necessary to establish such an empire and implemented a system strong enough to eliminate almost any chance of failure. I merely see Walmart as a detriment to domestic economic growth.
    By the end of the third chapter, Lichtenstein has brought us through Walton’s escapades in launching Walmart in several locations and the strategies on which he capitalized. He tells us of the culture that Walmart possesses, and as a historian, does a great job of establishing connections to Walton’s background. The culture that Lichtenstein discusses can actually be found merely by speaking with employees and former employees of the all-powerful Walmart. I have personally had conversations where former employees have played with the idea of leaving careers in which they have success in order to return to the Walmart world of employment. It bewilders me how this can occur, but as Lichtenstein says, Walton created a presence reminiscent of Henry Ford in the early days of the dying titan that is Ford Motor Company.

  10. Hao-Chan Hung

    The first section of “The Retail Revolution” gives the clear background of the early stage of Sam Walton’s career. At the beginning, the author shortly describes the merchants and manufacturers history of American and emphasizes the power of retailers. From the emerging of great consumer products corporations and branded products to the chain stores, the author gives a brief overview of the retail industry. Then the Sam Walton’s era came. Sam Walton was very familiar with the condition of the rural place, where he was born and grew up; this provided him the cultural and economic ground building his commercial empire.
    How a man become successful is always an attractive topic. Sam Walton is absolutely one of the most successful entrepreneurs in the recent decades. Indeed, he represented many characteristics that led one becomes a pioneer and a leader. He knew this world by researching the market and his competitor. He did the best to equip himself with the tools and resources necessary to conquer every question and waited for the chance. He may be the best example for everyone who wants to be success in the business world.

  11. Szuyang Chen

    Founded less than half a century ago by Sam Walton and his brother Bud, Wal-Mart is today the biggest retailer giant in the world. Although Sam and Bud began their business at Bentonville, an isolated corner of rural South, Wal-Mart expansion during this fifty years into Midwest and the Rocky Mountain states, with nearly 2 million workers ( 1.4 million are in the United States). After Fortune inserted retailers on its list, Wal-Mart raise to number four. Moreover, Wal-Mart displaced GM as the largest private employer in US. Recently, I read a survey shows that Wal-Mart is the company that can best represent the United States (Second is Google, and Microsoft , NFL is third and fourth, fifth is GoldmanSachs. Every evidence shows that this is a real revolution.
    Sam Walton wisely used his business philosophy to build up this empire. He created a self-contained corporate culture and built an organization of exceptional flexibility and efficiency. Furthermore, he introduced different kinds of new technology. For example, he demanded that all Wal-Mart vendors slap a “ bar code” on every product in his store. He also build up his own deliver system which can cut down shipping costs. Sam Walton is the best example for everyone who want to start his own business.

  12. Dan Jones

    “The Retail Revolution” by Nelson Lichtenstein sets out to accomplish a dubious task. It acts as both the chronicler of the life and times of Sam Walton, an ambitious business man from simpler times, as well as a look into the inner workings of the one of the world’s largest companies. The book starts out simple enough, going through the trials and tribulations Walton encountered in opening his first stores. The economic environment, the strengths and weaknesses of his competition, even the areas in which he chose to focus, such as the corporate culture he defined or the supply chain systems he created are all discussed in great detail. Walton’s rise and the events that shaped his business strategy are all outlined in a manner that is both light-hearted and fact heavy.

    This tone in of itself is very representative of the actions Walton took and encouraged, mirroring the Wal-Mart culture of communal yet disciplined. Walton himself may come off as an honest hardworking manager, but it is seen throughout that his actions are often down-right cutthroat. He often said he spied on his competitors stores and did his best to undercut everyone he could. In one section, when returning to the town of his first store, he sets explicit orders to “break” the competition. This even gives way later in the book to a sense of fanatical egotism he has, looking to instill in his employees an almost God-like view of Sam Walton. While it cannot be said he did not work hard to carve out his empire, it can be said that the combination of a cutthroat attitude and ultimate self importance made Sam Walton a very dangerous person to compete against.

    What little remains of his competitors in all markets can be given as proof of this.

  13. Shiksha Singh

    The Retail Revolution book starts with the life and career of Sam Walton. Walton has been in rural parts of America and he started his retail stores in an economically underdeveloped part of America. He had worked for retail companies but he wanted to start a huge retail chain that could overshadow any other retail store in America. He also tried his best to make the distribution channel as efficient as possible and his previous work experience helped him in implementing more effective methods. It also gives a description of the retail industry and how the retailers have always been powerful players in the history of USA. With the emergence of new consumer product companies the retailers will gain power in the industry.

    As I read about Sam Walton I was interested in knowing more about how his life helped him shape is career. Walton had a good eye to judge the market and he was lucky to start Walmart at a time when there was a boom period for consumer goods. I feel Walton is an excellent entrepreneur and will serve as an excellent example of how to research and gather information before you start a business. He not only had the knowledge but also knew how to best exploit the information he possessed.

  14. Ashley J Norbom

    The sixth chapter of The Retail Revolution, appropriately titled “Wal-Marts long march to China,” describes Wal-Mart’s growth in the nation, from the manufacturing companies to the arrival Wal-Marts own stores. Lichtenstein begins with a topic that often attracts much controversy, outsourcing. “We would just take our best-selling U.S. made items, send them to The Orient, and say ‘see if you can make something like this.'” This truth, presented so bluntly, exemplifies the companies outlook on overseas purchasing, a mechanism utilized extensively to maintain Wal-Mart’s constant cost-cutting efforts.

    From it’s relations with China, what I found extremely interesting to discover is Wal-Mart’s emphasis on the production of inexpensive toys. While Wal-Mart exploited China’s cheap labor in many categories of merchandise, cheap toys were more important. The context of such exploits have caused significant negativitity toward Wal-Mart, through accusations of child labor as well as unjust and unsafe working conditions. Associated unethical issues aside, the strategy behind wanting to maintain a low price on toys was very interesting. An American purchasing habit, when children request a specifc toy for a holiday or birthday, parents tend to spend more time searching for the lowest price than they may on other items. Thus, by keeping prices on toys low, Wal-Mart was able to get these parents into Wal-Mart stores who were then likely to purchase other items. Many strategies of retail stores are obvious; such as the placing of milk and other essentials at the backs of grocery stores; in the case of cheap toys, however, the strategy is not so obvious to the public. This led my thought process to wonder how much more effective subtle schemes are than the more obvious ones that people are aware of. After all, a customer in a grocery store who is aware of the plot to have them stroll the aisle’s on the way to the milk may be more likely to cut straight to the desired product, than a parent would be likely to go straight to the toys in Wal-Mart.

  15. Liam Ahern

    “The Retail Revolution” by Nelson Lichtenstein begins with a very long background about Sam Walton and the manufacturing world before Sam. Before the first chapter Lichtenstein tells us his introduction to the book, and a little about Sam and his brother Bud opening up their store in a small town called Bentonville, Arkansas. The introduction explains that since Wal-Mart has grown so large, suppliers and corporations moved in just to be close to the retail behemoth, and now there are direct flights from Chicago and NYC to Bentonville. He ends the introduction with a fairly ominous statement; soon there will be a “battle royal” and the results will shape a generation.

    Lichtenstein then progresses with a history of the manufacturing world and all of the large companies that came before Wal-Mart. This first chapter summarizes all the beneficial decisions made by large corporations pre-Wal-Mart and the detrimental decisions. I think the reason for this is to display to the reader that Sam Walton also looked at all of these factors when deciding where to take his company. Sam picked and chose from the decisions that worked and recognized the decisions that didn’t work and made sure not to follow in the footsteps.

    Lichtenstein goes on to say how Walton grew his distribution centers and used the bar-code, which yesterday (10/7/09) was the 57th anniversary of its patent, until he reached mammoth size. This book is full of the facts of Walton’s life and so far the beginning of Wal-Mart and how it eventually became the giant it is today. I look forward to reading the rest of it and learning more about Wal-Mart from Lichtenstein’s point of view.

  16. Pranav Kaluskar

    Even though Wal-Mart has rigid policies that try to squeeze the maximum out of its employees at low wages, it still rewards well-performing managers with large bonuses and incentives. Because retail is such an enormously labor-intensive industry, keeping a lid on price and volume of labor is the easiest way to boost the bottom line. Managers were pressurized to keep labor budgets down all the time using the “best yesterday” concept. No overtime was allowed although more than one person from the same family could work in the same store which increased household incomes. To keep costs down, Sam Walton even found ways around government regulations such as minimum wage, tax penalties etc.

    Wal-Mart has always found trade unionism far more difficult to deal with than federal mandate that boosted wages, overtime pay or paid lunch breaks. To deal with these union issues, Wal-Mart appointed John Tate, who perfectionist in anti-union skills. He traveled and lobbied hard to keep unions away, and Wal-Mart kept away from locations where unions had a stronghold. Wal-Mart held a decisive competitive advantage over supermarkets when it came to labor costs, which is why keeping the unions out was so important to them.

    If a relentless squeeze on its labor costs is an essential element to Wal-Mart success, the other is cheap goods, a huge proportion of which comes from China. China had a stable currency, developed infrastructure, political reliability, and a compliant workforce. All these attributes made Wal-Mart abandon its “Buy American” campaign and started importing in huge quantities from China, especially from the Guangzhou. China’s sweatshop culture of mass production was ideally suited to Wal-Mart demand of high volume of goods. Wal-Mart’s policies and rigid ethics made it the “Dirty King of South China”.

  17. Jeff Stark

    I found it interesting how Wal-Mart was pressured into creating a Buy America program. At a time when Wal-Mart was trying to cut its costs by moving its production overseas, the US government was trying to force American companies to purchase more American made products. Rather than allowing this to ruin their plans for overseas expansion, Wal-Mart made it appear as though they embraced this idea. They created the Buy America program with the slogan “This item, formerly imported, is now being purchased by Wal-Mart in the USA and is creating or retaining – jobs for Americans!” By doing this they earned praises from the government including a direct praise to Sam Walton from Bill Clinton. However, Wal-Mart was not doing this new program for the praise, they were doing it to avoid legal issues as well as to increase the leverage for new overseas items. If overseas producers know that Wal-Mart is shopping hard in the US for goods, it makes them work harder to impress Wal-Mart. In addition to the overseas vendors, American vendors were feeling pressure too. Wal-Mart wanted their American suppliers to commit to improving their productivity.

    I found it interesting how Wal-Mart was able to turn a potentially costly Buy America program into a very beneficial program for the company.

  18. Frank Puoplo

    The tactics employed by Walmart to cut costs and maintain (and ultimately increase) their bottom line are discussed fairly thoroughly in regards to labor and loss prevention in the second third of Lichtenstein’s book. As a retail employee myself (thankfully not an employee of Wal-Mart though), I found that many of the practices discussed in this part of the book are quite similar to the practices of other large retail corporations. At work I often find myself correcting coworkers who celebrate the gifts that company gives them, revealing what the actual purpose of the benefits programs are and how we actually gain nothing as compared to working anywhere else.

    Where I work, and as displayed by Lichtenstein with reference to Wal-Mart, labor costs are strictly monitored by both store managers and by the corporate home office. It seems to be a common corporate trend, and rightly so, that labor costs are maintained at a minimum. All of the policies that Lichtenstein noted about Sam Walton’s powerhouse company can be transferred to even the smallest, privately owned, retail operations to increase the bottom line. As much as I may oppose these tactics now as an underpaid retail employee, I do understand how necessary these practices may be. The facades put forth by employers about “Actual Pay” versus what the paycheck says are actually quite comical. For a part-time employee at my job, the company’s additional contribution besides what is mandated is $0.75 per employee per year. According to their calculations, by including the mandated Social Security payments, FICA, etc. , the company is paying each employee approximately an additional 50%.

    Unions, as noted by Lichtenstein, have been able to gain no ground on Wal-Mart’s turf. Were unions to have gained entry to Wal-Mart, the company would be no where near as powerful as it currently is. Sadly, the concept of the union itself is dying off. With the way Lichtenstein concludes the chapter on unions, we can see that current management styles are killing the union off. Both in my job, and in friends’ careers, unions are becoming a thing of the past.

  19. Dan Jones

    Globalization has given rise to a new form of power abuses world-wide by the world’s biggest company, namely, Wal-Mart. Now, that is not to say I am biased against Wal-Mart as many others tend to be, I do not consider them a great evil out to destroy the hard working peoples of the world. I am merely stating that “With great power comes greater responsibility”, and Wal-Mart has failed in it’s responsibility.

    The world of Wal-Mart’s production facilities is discussed in length in Lichtenstein’s book, namely the chapter on China. Here we see the sharp contrast of what Wal-Mart demands of it’s factories, the difference between cutting costs and ensuring safety. It is apparent which is the most important as well to Wal-Mart. Many practices have been set up throughout the years to shield Wal-Mart from the practices of it’s factories rather than to correct the practices themselves. Though it claims to audit it’s factories, the auditors are stated to be easily mislead, according to researchers who spend much more time doing work in the field.

    While other manufacturers, whose image ties to its brand viability, make large efforts to add cost in order to provide better work environments, Wal-Mart makes no efforts, since to them off brand products are more profitable and have no image to sustain. Wal-Mart’s manufactures are a dizzying series of contractors and subcontractors, with no control or monitoring from Wal-Mart. This limits their liability while increasing their profits. While that is a good business goal, in the sense that we are discussing human life and well being, we should not let business sense determine quality of life.

    A cut-throat business model does not excuse turning a blind eye to the sanctity of life.

  20. Shiksha Singh

    As Walmart’s business grew they wanted a more efficient and effective distribution model for which they chose distribution centers and not warehousing. This helped Walmart to keep the goods moving at all times and with the use of bar codes it was easier to track all the products and manage the sales in the stores. The information collected at stores had to be communicated to the headquarters so Walmart used Satellite based telecommunication system for quick transmission. The investment on IT was second to only National Security Agency which means they were data-mining lots of information to expand their business.

    Walmart and P&G were giving business to each other and they made use of this relationship wherein Walmart shared its information of sales with P&G and gradually Walmart gained the upper hand in the relationship. P&G consulted Walmart before introducing a new product and sent it to market with Walmart’s approval. Both the companies benefitted from the relationship but Walmart had become larger and held the power in the retail industry.

    Sam Walton made very clever investments and understood that although the overhead costs are high but it is going to reap good results in the long run. It is interesting example of how and why companies go for a vertical integration decision. The way they are using the information amazes me as it helped them be on the top of all the manufacturers. I think the understanding that Walmart and P&G share, if any of the two companies go out of business it will be disaster. It is important to see the growth prospects of the partnering company before you rely for about 30% of your supplies. I am interested in reading about the corporate culture of such a mammoth organization.

  21. Joshua Hollander

    Venturing further into the novel, Lichenstein divulges the perceived cultures of Wal Mart followed by exposing some of its internal weaknesses. Due to its origins, Sam Warton started in a rather racial area in Arkansas which in turn helped its perception to the public grow positively. “While black or white is still an important label, everyone shops at Wal-Mart.”(p.63) Wal Mart is also known for bestowing strong evangelical christian values in which they would often refuse or de-shelf products such as Maxim and Stuff magazines. Due to these measures, Wal Mart placating the situation allowed them to gain favor amongst its consumer ideologically.In addition, most people view Wal Mart employees as different and friendly people making their shopping experience pleasurable.

    Even though it is easy to shop at Wal Mart, many do not see what happens behind closed doors. Wal Mart has a high employee turnover due to its low cost and high profit structure. Wal Mart is known for squeezing the maximum amount of work hours for its employees and does not pay any overtime. If an employee was to work overtime, a store manager would be pressured in finding a way to dismiss any extra work hours in order to keep labor costs low. Methods such as these allow Wal Mart to charge such a low price for their goods since they are paying the cheapest possible costs for labor. On top of that, Wal Mart has violated many wage, labor, and safety laws by posing the company as an exception to the rule. In addition, how can employees feel safe working for a company that hires a man like Tom Coughlin to protect employeer theft while ironically being charged for allocating funds for his personal use.

    In retrospect, Lichenstein does a good job of introducing the reader with a positive mindset about Wal Mart and then slowly digging deeper into its problematic roots. From my current viewpoint, I feel that Wal Mart has been very unethical in building itself to the company it is today despite any pension plans of sort for employees they currently offer to make up for their scheme. It will be interesting to see what Lichenstein espouses about Wal Mart during the last few chapters of the novel.

  22. Mayank Goel

    The part of the book I read since last time was all strategy, strategy and strategy in every way possible. It made me more inclined towards the course as I now understand how crucial it is for a company to have a sound strategy as its foundation if it wants to prosper.

    Sam Walton, had all the right to be able to build an empire with his discount stores. He did everything which an entrepreneur should do in order to succeed. He was always keen on learning and adopting ideas from his competitors and used them to his advantage. Starting as a salesman in one of the retail stores and then starting with one of his own, that too a successful one, is the sign of a great businessman to be.

    Very early in his life he understood what kind of strategy would set him apart in the retail industry and constantly worked on achieving what he had in mind. I agree that WalMart is the biggest company in the world so to speak and with that comes responsibility but they cannot be accused of doing any harm to the society. There were such discount stores in operation before WalMart even came into existence. The fact that he is much bigger in comparison to any of them does not make the company harmful.

    His idea was non-arguably great and it is proven from the fact that he made that Ben Franklin store highly profitable and even after he faced the down-point in his life when he had to leave that store there and then, he established his own chain of discount stores and rest is history. His idea of “acquiring” goods at much lower price, minimizing middlemen/distribution expenses and selling them at 30% lower mark-up price then his competitors is nothing but praiseworthy.

    Now when WalMart is the biggest retailer, I would post further comments about the company once I complete the remaining of the book.

  23. Joann Lew

    This second section of the book seemed to focus on the ways that Wal-Mart has used to keep costs low, mainly through labor costs as well as supply and vendor costs.

    First off, Wal-Mart has lived through the evolution of labor laws in the United States and the growth and popularity of labor unions. Sam Walton and his successors seem to have found as many loopholes as possible to avoid the overtime and higher wage laws and employee rights and benefits. Wal-Mart employees constantly felt pressure to stay under the 40 hour work week and still complete their work. Even when employees put so much effort and hours into their work, promotions and other further work opportunities remained extremely limited. There was a contradiction between Wal-Mart’s open door policy for employees and the uncompromising ways to deal with employee suggestions and complaints. It came to the point where employees were just constantly threatened with their job status. It was also unfair for store managers who felt extra pressure being the intermediary between higher management and retail employees. The store managers were stuck in the middle trying to take higher management’s advice in reaching the company’s overall goals and maintaining acceptable relations with store clerks.

    Second, Wal-Mart also added pressure to their vendors and suppliers. Since Wal-Mart has such a commanding presence in the industry and provides so much business for their suppliers, vendors and suppliers had to find a way to meet Wal-Mart’s demands. This increased competition between domestic suppliers because Wal-Mart was looking to China to provide their merchandise, essentially cutting out the costs of the middleman. If domestic suppliers were not able to provide lower wholesale prices, they would lose the Wal-Mart account. For China’s suppliers, there was pressure to increase quality of their products while maintaining a low cost, which means underpaid factory workers and under par working conditions. Everyone was just vying for Wal-Mart’s approval of their products. This shows the global power behind the size of Wal-Mart. However, with media involvement, Chinese factories generally felt the pressure to improve their working conditions and compensations from western companies. With Chinese cooperation along the terms of western companies, Wal-Mart could lose a very important competitive advantage in providing everyday low prices to consumers.

  24. Chia-Jung Hsu

    The author describes how Wal-Mart extends overseas and positions itself internationally. Wal-Mart international business retains the original beliefs and values. Wal-Mart usually acquires the third or fourth biggest retailer when entering into the other country and then restock, remodel and walmartize the stores. Although Wal-Mart keeps its main value, it is still very different while doing business in other countries from doing business in US. Wal-Mart confronted many obstacles that are related to union, political, regulation, customer behavior and culture issues…etc. Also compared to other transnational retailers, Wal-Mart has a lot of space to improve.

    Wal-Mart’s failure in Japan can be expected when it fired all the Japanese managers and put in managers who knew few of Japan. Cultures and living environment in Japan are very different from US. Like Germany, Japanese take quality more seriously than price and associate low price with low quality. Wal-Mart’s low price strategy, instead, keeps Japanese shoppers away. Another issue is about cost. Wal-Mart found it hard to lower the costs therefore it can only offer weekly special rather than every day low price in Japan. First, Japanese consumers demand fresher products. It raises the difficulties for Wal-Mart to reduce costs. Second, many operations in Japan are based on family. Suppliers always get better deal from smaller order. Actually not only Wal-Mart fails, Carrefour had already pulled out its business from Japan many years ago. However business downturn during these two years helps Wal-Mart improve its profits since some of Japanese shoppers start to believe that Wal-Mart can provide lower price for the same quality products.

  25. Hsin-Yu Song

    In general, Wal-Mart’s strength came from managing logistics. One key to Wal-Marts early success was the use of bar codes. Bar codes allowed Walmart to accurately account for their inventory and also get more customers through the till at a fast pace. This also allowed Wal-Mart to expand the number of items that each store could hold, change prices instantly. The result was that between 1970 and today the average size of a Wal-Mart store increased from 40 000sq/ft to 200 000 sq/ft.

    Also, Wal-Mart owned the trucks and the transportation network that supplied their stores, while Wal-Mart’s main competitor, K-mart, subcontracted all of their trucking. Furthermore, compared with their competition, the majority of products sold in Wal-Mart stores passed through Wal-Mart distribution centers.

    These distribution centers were crucial to Wal-Marts’ success, and were different than other warehouses of the time. The key difference that distribution centers were places where products were in motion, not sitting waiting to be sold. Trucks would arrive at these centers and transfer cargo to other trucks for immediate delivery. This allowed Wal-Mart locations to receive smaller amounts of goods that they required at more often intervals. This in turn allowed Wal-Mart stores to supply consumers with products in a more efficient manner. This efficiency in turn allowed Wal-Mart to achieve the lowest prices while maintaining a decent profit margin.

  26. Pei-Ying,Lee

    Though Wal-Mart’s mastery of logistics and its command of the retail supply chain would be catched up by competitors, the managerial culture proved remarkably efficacious for Wal-Mart, which celebrates ideology of family, faith, and small town sentimentality, compelling harmony with a world of transactional commerce, employment insecurity, and poverty level wages.
    The traditional rural culture at decades ago is pretty anti-chain store, since it violates the value of original small shop and familial hierarchy relationship. Wal-Mart captured the long-held rural rules. For example, Wal-Mart, who is benefited by agricultural revolution, admitted that his stores “the exclusive province of men”. On the other hand, Wal-Mart treated more generously than its competitors, such as K-Mart and Spartan Stores, with more bonuses. Besides, Wal-Mart promises his ambitious young men: work hard, devote yourself to the company, find a series of mentors, and you will escape, if not forget, the poverty and limits of your small-town youth, and Wal-Mart really did what he promised which generate more employees’ loyalty and pride in Wal-Mart. Indeed, Wal-Mart’s family atmosphere, rural informality, and cultural homogeneity proved of enormous usefulness to the company.

  27. Pranav Kaluskar

    Wal-Mart has a worldwide presence. Wal-Mart’s International Division operates more than 3000 stores in 13 countries, and accounts for about one-fifth of its revenue. But worldwide expansion was not easy. Wal-Mart faced number of problems in its expansion such as unions in UK, Canada, Germany, income polarization in Latin America, and copying of its innovations in Japan. But Wal-Mart took the right steps in overcoming these issues e.g. in China, they proceeded cautiously by entering into an alliance with a Thai supermarket chain.

    When it came to zoning and development issues, Wal-Mart was playing by a new set of rules that ensured it would almost always win. Wal-Mart used its size and sophistication to gain political influence in almost every state and local government. The company managed to circumvent those laws and regulations once designed to control these corporations. Wal-Mart faced an increasingly hostile reception in small-town America. Issues like sales tax evasion, self-interested philanthropy, and employee health insurance deductions sparked number of protests. In spite of facing resistance and suffering some losses due to these problems, it eventually steamrolled its way to the top.

    Competition has become increasingly globalized. Wal-Mart and similar companies’ relentless growth has created a world that is increasingly inhospitable to their own success and the countless people who work in that channel. Companies are providing stiffer competition around the world and Wal-Mart’s policies are not helping themselves. Purchasing powers of customers has increased and in future, Wal-Mart will have to conform to a new set of social and political imperatives. Otherwise, they will find themselves on a downward spiral and eventually end up at the bottom of retail economy.

  28. Ashley J Norbom

    The final chapter of Wal-Mart, titles “Wal-Mart versus the World it has Created,” examines the affect of Wal-Marts development on today’s American society. It not only details how Wal-Mart has influenced consumerism, but also how the company’s influence on other societal avenues. One of the more prominent examples of this is how Wal-Mart has affected American politics. One of the more prominent issues with Wal-Mart politics is its constant battle with unions. Unions generally have a strong lobbying presence in Washington, so it is not surprising that they will take what they perceive to be a threat to unionism to their representative lobbyists and politicians.

    Union conflict aside, Wal-Mart’s colossal presence in numerous facets of American consumerism would be enough to cause politicians to cite the corporation in their political campaigns, irrespective of the position taken. In recent years, there seems to have been negative publicity about the corporation from politicians, both republicans and democratic alike. While Joe Biden questioned their low wages and its impact on the ability of middle class Americans to live on it, Wal-Marts labor policies made their way into the campaign of Hillary Clinton in the form of a protest. Similarly, democrat John Kerry aimed to publicize the fact that while Wal-Mart fails to provide adequate health insurance, five Walton’s made their way onto the list of ten richest people in America.

    In looking toward the future, Sam Walton stated “constant change is a vital part of the Wal-Mart culture itself. In fact one of the greatest strengths of Wal-Mart’s ingrained culture is its ability to drop everything on a dime.” Today, against the desire of the Wal-Mart, the White house is home to a democratic party. With democrats in power, it is likely that political actions will be actions will be taken against many of the policies of Wal-Mart, whether it be health-care or labor. Thus, it is imperative for the corporation to prove Sam Walton true, as their ability to adjust to the current economy and politics becomes more crucial.

  29. Hao-Chan Hung

    In the second part of this book, the author focused on the “low cost” of Wal-Mart. He started with mentioning the importance of lower cost in the retail industry and the main factor of driving cost down, the logistics. Wal-Mart established and designed its own distribution center and implemented aggressively the Universal Product Code. The first significant success Wal-Mart gained was the cooperation with P&G. This also represents a power-shift from the brand producer to the retailer holding the perfect information system. The author then described how Wal-Mart formed the culture of “low cost” throughout the corporation. From the early American history, Wal-Mart became a good and stable working place for the workforces transferred from the agriculture and provided a family, community, and the supposedly atmosphere to attract and stick them. However, as time goes, the tension between pursue of low cost and the rights of employees appeared. Wal-Mart tried everything they could do to conquer or to suppress these problems and became the largest retailer in the world. The way Wal-Mart did to lower the cost and improve the revenue is just business practices in the view of company; however, sometimes it seems like crafty plots. It is always difficult to find a perfect company offering great working place and still earning lot of money but Google did it. Maybe this “happy” work environment could just happen in the high-technology company, but I will put a big question mark to ask why Wal-Mart cannot lower the high bonus offering to the management level and increase the hourly salary of lower-level employees, or just improve the “happiness” a little in the workplace.

  30. Szuyang Chen

    The most successful key that a retailer can earn more profit is to keep the cost down. Wal-Mart did a really good job on that. Wal-Mart did every effort in order to keep the cost as low as possible. The author gives us several examples. Wal- Mart has the stength on logistics. Wal- Mart’s vertical integration gave it a great advantage to cut down the cost. It has its own transportation system and also build up its own distribution center rather than warehouses in order to improve the efficiency. Moreover, it use bar code to control the inventory. Each store will know when to order products and how much to order. Efficiency will help Wal- Mart lower its costs a lot. In addition, Wal- Mart makes its labor cost as low as possible. It gave its labors the minimum wage and don’t let them work overtime. Also, Wal- Mart kept away from the unionism to maintain the low cost. Although there is an arguable ethical problem in this issue, we still have to say that Wal- Mart did its best on cutting the costs.

  31. Hao-Chan Hung

    In the last part of the retail revolution, the author described the history of Wal-Mart going globalization and the criticism Wal-Mart are facing and fighting. China, with relatively stable politics and currency, became a very good supplier for Wal-Mart. In the 1980s, Wal-Mart began to find means to provide lower price goods by directly contacting the producers located in the Asia. These producers could offer the same quality goods with lower price and welcomed Wal-Mart very much because of the amazing order quantity came from Wal-Mart. However, the production pressure from Wal-Mart squeezed all Wal-Mart supplier factories in rush seasons as well. This pressure create a subcontracting system in the supplier factories and led the sweatshop problem emerged. Wal-Mart made steps to globalization and opened stores overseas during 1990s. Wal-Mart gain huge success in Canada, the first foreign territory, Mexico, and China. However, in countries with different consuming habit or powerful regulations such as United Kingdom, German, and Japan, Wal-Mart suffered a setback. Finally, the author expressed the criticisms and fights came from the basic Wal-Mart business model, “the low cost and low price”. Wal-Mart holds its core means of reducing all the cost to provide “everyday low price” and seldom compromises. Until now, Wal-Mart has built its empire and made its own rules. The progress of Wal-Mart seems stable and endless in the near future. Although the ways Wal-Mart battling or persuading for its creed usually seems like stratagem, it provides some insights for us. The most valuable trait of Wal-Mart is that it insists on a simple thought. No matter how much pressure comes from the external environment, Wal-Mart always tries to seek out methods to solve that. I think this is why Wal-Mart is Wal-Mart, the king of retailer, and why it can create a brave new world of business.

  32. Shiksha Singh

    Wal-mart’s corporate culture was influenced by the social conditions of the geographical region in which Wal-mart was dominant. The post-civil war period also affected the hiring decisions of Wal-mart and by 2001 Wal-mart became the largest private employer of African Americans in America. The Personnel/People Division of Wal-mart made an effort and was able to gain loyal employees and customers until about mid-1990s. But, starting 1990s Wal-mart’s main goal was to see a significant increase in the bottom line at the cost of the corporate culture they boasted upon. Wal-mart’s way to control the overhead costs was low hourly wages and part-time workers were exploited to work for longer hours. The labor turnover of Wal-mart reached 70 percent by 1999 with the over-exploitation of workforce and false claims of “company’s familial culture”. Wal-mart made every effort to not to follow the labor laws and somehow escape the legal implications. The “no-union” rule at Wal-mart added to the flavor of the non-adherence of worker’s rights.

    The monstrously big company’s efforts to make huge impact on its bottom line led them to the road of “Supply Chain Management” to manage its imports from China and other “third world countries”. The main reason to go to China for its production of goods was cheap labor costs and an abundance of workforce. Wal-mart traded with Chinese businessmen in the non-traditional way of no personal relationships and suppressed the businessmen to lower the costs even if they had to adopt illegal means like hiring of underage workers. This brought a lot of criticism for Wal-mart in the media and they were not able to defend themselves with any legitimate reasoning. Another strategy was the use of private-labels as opposed to the famous national brands and offered them at very competitive prices.

    Wal-mart still struggles to become a global retailer, its presence in many countries have been opposed due to political reasons. The labor law practiced by Wal-mart is brutal and is looked down by many countries because of which it’s difficult for Wal-mart to penetrate in these markets. Wal-mart is facing some challenges in entering the European and Japanese market also, because these markets are already mature enough to have Wal-mart-like stores and the regulatory agencies are strong to control the corporate culture of Wal-mart. Wal-mart’s future is hazy due to its over-ambitious plans and the past is haunting the future. The business model has been criticized and in many states like California the “Wal-martization” has been resisted by changes in the law. Wal-mart has come to a standstill and the rival stores are performing better than Wal-mart. A retail analyst rightly said that “The glory days are over.”

    The retail revolution was indeed a gift of Wal-mart but the gift turned into an imprecation. Low labor costs and cheap quality of goods being the only focus seems to be a defective business model. The inhumane treatment of workers in the third world countries and their over-dependence on the cheap labor costs in these countries can be very detrimental to Wal-mart’s operations. It was more like a retail imperialism rather than a retail revolution by Wal-mart. This gigantic company has survived through the recession and has been ready to adapt to the changing environment, so Wal-mart may have some breakthrough plans to be back on its growth path but hopefully with non-violation of the human rights.

  33. Mayank Goel

    The story of this giant called Wal-Mart is shaping up the way, the way company wanted it to. Its creator, Sam Walton, tried and to an extent succeeding in each policy that he decided the company should follow. The corporation’s mission of offering the cheapest goods to the consumers has always been the top priority which made the journey of this company so interesting.

    To keep the costs low, Walton realized that he needs to keep labor costs down. Many of the competitors ignore this but according to him this was very important. To achieve this, the company did not let its workers work overtime, however, encouraged more than one person from the same family or any relative to work for it. He always tried to find a way around government’s regulations to keep the wages low and the company away from the minimum wage laws. Extremely low wages that the company paid attracted the government’s attention and the company found itself surrounded by controversies and was sometimes, penalized. But the craze that Sam Walton had for not letting a single extra penny go to its workers is evident from the fact that he “threatened” his workers to not to get the penalty checks cash.

    Moreover, to keep up to this policy, the salary, incentive and sometimes even the job of its high rank managers was dependent on maintaining a high sales volume as a percentage of its labor cost. Its payroll was strongly based on selling maximum quantity possible and rotating the goods on the shelves. Any manager failing to do so could easily expect to be fired which is proof enough of the company’s stress on magnifying its sales.

    Furthermore, after being successful in keeping labor costs down, Wal-Mart focused on reducing the cost of goods purchased. Because the cost of goods produced in the US could not decrease any further and the company was still hungry for low prices, it went the route of outsourcing. Wal-Mart used its image and enormous size to influence the local governments and other retailers in China. It saw an opportunity of producing large quantities of the products which it required, be produced at extremely low prices in China and did not care about the workers in the US. This move was greatly opposed by the American population and the company attracted a lot of negativity.

    All this is clearly seen in other retail chains performing better in some of the states in the US where people have realized what Wal-Mart is doing. Many of the countries have not let Wal-Mart even enter into their market for its inhumane labor practices. All this is an indication that the rule of this mighty empire is probably getting mitigated. The company focused on finding the cheapest labor and suppressing them as much as they can to keep the costs low. It also dumped cheap quality goods in the market. These strategies did work for a few decades but such policies can not be sustained in the long run and probably that is what has gradually, started to happen.

  34. Hsin-Yu Song

    Throughout Wal-Mart’s history it has pushed its suppliers for better prices and more flexible delivery. The more purchases Wal-Mart makes, the more pressure it can put on its suppliers. As time goes by, Wal-Mart has higher bargaining power on suppliers. This is allowed Wal-Mart to squeeze its suppliers’ margins. Today, many of the products that are sold in Wal-Mart stores come from factories in China, South East Asia, and Central America. Though the conditions in many of these factories is known to be very bad, Wal-Mart has done little to try to improve the condition of the people who make products that are sold in Wal-Mart stores.
    Today, Wal-Mart operates worldwide including countries such as Canada, Japan, UK, Germany, China, etc. Its international business accounts for around one fifth of the company’s total revenue. Although not every business expansion in different countries would be successful all the time, Wal-Mart overcame difficulties and achieved its goals by adopting strategies such as “Every Day Low Price”.

  35. Joshua Hollander

    The completion of the Retail Revolution deals with some of the dimmer sides of Wal-Mart along with the necessity of its existence. Wal-Marts outsourcing and globalization efforts in China have brought the working conditions and wages of factory workers into questioning that recent democratic presidential candidates were questioned about their position on Wal-Marts actions. Wal-Mart imports imports a majority of its products from Chinese factories and by 2006, 80% of the 6,000 foreign factories in Wal-Marts supplier database were located in China. Due to the high volume of orders placed by Wal-Mart compared to others companies, their buying power in regards to porter’s five forces are extremely strong and are narrowing the competition. However, these factories must reduce the price such in order for Wal-Mart to place their orders or else Wal-Mart will buy from another factory. The Chinese factories make only 10% from Wal-Mart orders compared to 50% from other buyers.

    In terms of Globalization, Wal-Mart has faced some opposition because of the difference in cultures and work values of these countries. In Germany for example, family owned business are the heart of the economy and local businesses fought the emergence of Wal-Mart like no other. This imperialist view drove Wal-Mart out of Germany as well. In Mexico, Wal-Mart would pay Mexican workers a fraction of the price they would receive in the U.S. and in some cases Wal-Mart would be more expensive than local markets where the culture lies.

    In retrospect, Wal-Mart has done a lot for American families by saving them thousands of dollar’s a year for shopping there. To some, this is a the cost of cheap overseas labor, lack of overtime for workers, and stingy health care plans that benefit the company. It is difficult were to draw the line in terms of ethical actions by Wal-Mart. However, due to their success in the business world and extra taxed revenue going to local governments, Wal-Mart is not going anywhere anytime soon.

  36. Jeff Stark

    I found the methods that wal-mart used to avoid unions and to save money unbelievable. I never realized the trouble they went through to squash even the tiniest hint of unionization. The most unbelievable of all their methods was when they actually closed an entire store because it had adopted a small union within the automotive section of the store. For Wal-Mart to close a store and effect the lives of all of the other workers at that store shows me that Wal-Mart doesn’t truly care about their employees as they say they do. In another instance Wal-Mart actually stopped cutting meat in their grocery sections because the meat cutters were considering unionizing. Wal-Mart didn’t just cut it out of that one store, but they removed it from everyone of their stores. The extent that wal-mart is willing to go to avoid unions is astounding.
    I also thought it was interesting how Glass reacted to the interview from NBC. When showed evidence of child labor in a wal-mart factor he denied it despite pictures and video evidence. He never even apologized or promised to make it right. The way that Wal-Mart does business as presented by Mr. Lichtenstein seems completely unethical and immoral. They will do anything to make a dollar and it doesn’t matter who they hurt or how badly they hurt them. They seem to have a complete disregard for labor laws and because of their immense power and wealth they have been able to get away with these violations.

  37. The final section of The Retail Revolution by Nelson Lichtenstein goes into a good deal of detail about the ways that Wal-Mart achieves receiving low purchase prices for its inventory, and oddly enough, at least one of these practices were even good for the American economy at one point or another. Globalization practices conducted by Wal-Mart were aimed to achieve the lowest prices, and thus sought to import their products from Asian countries. Once trade was established with several of these countries, Wal-Mart ended up deciding on the Chinese manufacturers as the most reliable and cheapest sources of products.
    Here is where Wal-Mart did some good for the economy. During the late seventies and through the eighties there was a fairly strong push for union-made goods, which in my mind is always a good thing. Once this trend came into full swing, Governor Bill Clinton spoke to Sam Walton and they arranged a way to make a Buy American campaign in the Wal-Mart stores. Although Wal-Mart still imported quite a bit of their goods, this provided them with a huge boost in public relations and created the image that Wal-Mart truly was good for America. Although this campaign did not last over the years, this image that it created has withstood the test of time in the eyes of some Americans.
    After Wal-Mart stopped this campaign, they moved a focus to increase their public relations about their Chinese manufacturing plants because these were coming under scrutiny. Overall, Wal-Mart was able to explain that the labor in the plants in China was legal and not sweatshop work, although the truth in that is debatable.
    Lichtenstein does a fairly impressive job of tying up how Wal-Mart used and shaped the retail revolution to keep labor and product costs down to ultimately maintain a low price for the consumer and high volumes of sales. In doing so, he begins to wrap up the book going back to issues of employee benefits and pay with relation to the government regulations and politicians and ties this in with how politicians in China often have ownership interests in the Wal-Mart related factories. By doing this, he begins to take a stab at the concept that Wal-Mart not only bends and breaks the rules, but they do so and ever increasingly they make the rules to work for them.
    Lichtenstein does point out that Wal-Mart is not the only country in the world that does this, and rather many low-cost bulk stores tend to hold similar practices, particularly citing incidents with Costco. I think Lichtenstein did a damn fine job with wrapping up the book in a way that leaves his consumer, the audience of the book to think about how they consume in the American market. While the book is not directly intended towards Americans, we can see how he may have wanted to leave the message that although you may have impressions of one retailer being good and another being bad, they do all have their little things that will inevitably hurt the American market. Despite being educated consumers, we still have little impact on what will fly and what won’t with reference to bad practices. Because ultimately, we are all bargain shoppers on the inside, looking for those “Everyday low prices!”

  38. Joann Lew

    The third section of this book revolves mainly around the expansion of Wal-Mart globally and into major cities. Traditionally, Wal-Mart builds its stores on the outskirts of major towns. To continue its growth, Wal-Mart had to look elsewhere, but it has experienced some bumps along the way. There were some countries whose cultures were not a match with Wal-Mart’s corporate culture. For example, German consumers were not comfortable with the false sense of hospitality and constant smiles. It was not a genuine experience for German consumers to shop at Wal-Mart. In Japan, consumers were not accustomed to large big box stores, which Wal-Mart saw difficult to overcome. However, there were some countries that matched Wal-Mart’s corporate culture. China’s Maoism was a perfect fit. In Canada, the culture was similar to that of the United States and served as an easy transition to growth.
    Domestically, Wal-Mart had some issues when trying to enter big cities. The large retail market of California, home to major cities like Los Angeles, San Diego, and San Francisco, felt threatened by Wal-Mart stores growing within their state. Wal-Mart had to fight through local retail chains and legislation regarding labor and union rights to continue their growth in California.
    Previously, Wal-Mart has enjoyed the political support of presidential administrations. The power of big business has worked in their favor, creating legislation that promotes the growth of the mega-retailer. However, in light of the Obama administration, there is a new focus on labor laws and health insurance policies. Wal-Mart’s current competitive advantage on low labor costs can disappear with the new legislative policies.
    It will be interesting to see how Wal-Mart measures up to these new challenges. Wal-Mart may need to find a new strategy to keep their everyday low prices. One might wonder where else Wal-Mart can expand to. There is some specifications that a country would have to fit in order for Wal-Mart to succeed in its market. There must be a match in the country’s culture, one that values strong loyalty and unreal hospitality. The country’s consumers must be open to a one-stop shopping big box retailing experience. There must be a high enough standard of living to appreciate the low prices that Wal-Mart offers, but not too high as to consistently regard low priced products as low quality. The local government must also be open to a power house retailer to enter their markets and to deem their practices to achieve everyday low prices acceptable. These are just some factors that Wal-Mart would have to consider to continue its growth globally.

  39. Pei-Ying,Lee

    To maintain low price strategy, Wal-Mart not only monitored it salary expense tight, it also had to seek low cost labors. China, the developing country not only provides cheap labor, but also stable currency, sound infrastructure and reliable political environment is an ideal joint venture for Wal-Mart. Under strong dominance and price consciousness of Wal-Mart, Chinese suppliers are under great pressure. They have to watch production schedule tightly since Wal-Mart does not accept any late delivery. Even they earn less profit per unit on an order from Target and have to lower price as much as possible, these suppliers would not turn Wal-Mart down because the size is remarkable.
    Wal-Mart generates huge profit and customer preference not only in America but in many other countries through the company’s globalization policy. However, this business model did not succeed in many high income or culture sensible countries, such as Japan and Germany. Despite the low price, there are still people in the world prefer their origin purchasing culture and quality of goods.
    At this part of the book, it really helps us to think deeper about business strategy and its relationship with the society. Though making profit is the priority of very company, it may not really justify itself when it comes to cultural destruction, employee exploiting.

  40. Szuyang Chen

    The last part of this book still focus on Wal-Mart’s low cost policy. It not only made effort in reducing the labor cost but also the product cost. Wal-Mart went globalization to seek for lower cost and to expand its territory. However, Wal-Mart didn’t succeed in all countries. For example, Wal-Mart succeeded in China, Mexico, and Canada but failed in Japan, United Kingdom, and German. Not only the stable politics and currency but also the low labor cost in China will help Wal-Mart keep lowering the cost. Moreover, because of the remarkable order quantity, Wal-Mart has the powerful bargaining power on the supplier. By using this power, Wal-Mart put pressure on the suppliers to force them lower their profit margin and maintain the required quality.

    However, Wal-Mart’s low price policy didn’t work in Japan. Not all customers in the world will just focus on low price. Such as the customers in Japan, they seem to put the quality on the first priority. Moreover, low price often makes customers mistake connecting to low quality. Wal-Mart should had a better understanding on the culture of the country before Wal-Mart decided to enter it.

    After reading this book, I really learned a lot about different kinds of useful business strategies. I also had a better understanding why Wal-Mart could create the retail revolution.

  41. Greg Feltes

    The opening chapters of Nelson Lichtenstein’s “The Retail Revolution” is a historical look at the man behind the largest corporation in the world, and some of the conditions and events that allowed this bare-bones retail savant to rise in prominence. It portrays a confident, intelligent, young man who never even considered failure, even during an almost catastrophic setback. It outlines the prelude, being a mix of sheer willpower, timing and luck, to the phenomenon that is Wal-Mart.

    The favorable social, religious and demographic makeup of Sam Walton’s “Magic Circle,” along with the tight-knit family culture perpetuated by Sam himself, led to an extremely loyal and hardworking labor force. This is a astonishing given one worker’s “fond” memory of Walton, “He would praise us for the good job we were doing but told us never to think we got so important that we could not be replaced.” This definitely echoes the small town patriarchal ideals of his “Magic Circle.” It makes someone who is not of this belief system wonder how this type of domineering relationship can be so rewarding for the average Wal-Mart worker.

  42. Courtney Atkinson

    “The Retail Revolution”, by Nelson Lichtenstein begins by giving the background of the retail empire known as Walmart. Lichtenstein emphasizes Sam Walton’s home life because it shapes the culture and the core values of Walmart. He also discusses many other key factors that contributed to the success of Walmart. The ones I found interesting include Walmart’s innovative logistics, their customer loyalty, and the implementation of the Universal Product Code (UPC).
    The first factor was that Walmart decided to warehouse and distribute their own products. This cut out a lot of the “middle-men” and resulted in a huge cost savings for Walmart. “Walmart revolutionized the relationship between merchants and their vendors”. They changed the game completely. The second one that I found striking was the loyalty of customers based on the corporate culture of Walmart. It played a huge role in Walmart’s success. Walmart was started in Bentonville, Arkansas which is a rural small town. This is portrayed in Walmart’s culture as well as a strong sense of family. “It doesn’t matter about the convenience. I like Walmart because it’s friendly. They pretty much call us by name now. They are a different type of people” said a woman who shops at a Walmart store in Massachusetts. This displays the extent of the loyalty that many customers feel for Walmart. Lastly, with the implementation of the UPC Walmart was able to track every sale made in their store. This allowed Walmart to leverage their buying power against their suppliers and to organize the store accordingly. The UPC shifted the power to the retailers and allowed Walmart to squeeze it’s suppliers and dictate the prices. This contributes to Walmart’s low prices.

  43. Greg Feltes

    The bulk of “The Retail Revolution” deal with a number of hurdles that Wal-Mart needed to overcome while continuing to grow their business: Inherent costs associated with low wage workers, finding low cost suppliers (read: suppliers, and sub-contractors, and sub-contractors, and more subcontractors, thus creating an impassible legal labyrinth designed to deflect any labor violations), managements suspect cost control techniques also involving labor organizations attempts.
    There are many issues associated with low wage labor, high turnover, employee theft, lack of benefits and overtime, and discrimination associated with hiring and promotions. These low cost measures extend into the supply chain, creating an environment where supplier sales explode but profits inch forward and the supplier becomes one-dimensional, or must resort to illegal labor practices. The management team also resorts to coercive, manipulative, predatory, and just plain illegal practices in its attempts to drive labor costs as low as possible. These are the fundamental strategies that Wal-Mart employs in its quest for retail domination.

  44. Courtney Atkinson

    The “Retail Revolution” continues the discussion of how Walmart got to where it is today. Walmart faced many challenges and was criticized for many of its policies to decrease labor costs. They were criticized for their hostility towards unions, their low pay to employees with unpaid overtime, and their failure to provide health insurance to all employees.

    I find this ironic because Walmart’s culture is the”ideology of family”. I don’t think many families would treat each other like this. Walmart tries to make up for the way they treat their employees by starting programs such as the “Buy American” and the “Philanthropic program”. They also donated to many charities and helped out in times of crises. Walmart is striving to look good to the members of the community. However, Walmart has contributed to the bankruptcy of many small businesses. Walmart contradicts its values and culture by the policies they implement and the actions they take.

  45. Guangyi Li

    Nelson Lichtenstein revealed “The Retail Revolution” by comparing Walmart to the eighteenth-century Dutch East India Company because of its indispensable existence in our society. The author implicitly disclosed Walton’s early career among retailers that catered to price-conscious consumers inspired him to emphasize saving in his business. In order to lower cost and pass the savings to the consumers, he deliberately collaborated with manufacturers and suppliers to eliminate all the middlemen who imposed unnecessary costs and insecurities to the distribution system. Subsequently, the combination of its satellite communication network and Universal Product Code enabled Walmart to leverage its enormous buying power to squeeze the manufacturers and pass the additional savings to the consumers. All these savings allowed Walmart to offer consistently low price to ensure its customer loyalty.

    Walmart’s success came from the majority vote of the society. It fulfilled consumers’ need of low pricing through not only the efficient utilization of its own resource, but also the exploitation of its “partner’s” resource. For instance, Walmart made its vendors responsible for analyzing its data and reporting the insights back to Walmart. Furthermore, it implemented its “open door” policy to prevent the formation of union in the organization. “It always finds the most economical way to do everything and to get talent.” (82) Consequently, Walmart was able to convert its business model from supply and demand to supply and command.

  46. Courtney Atkinson

    In the last section of “The Retail Revolution” it discusses some social, political, and geographical issues Wal-Mart faced. Wal-Mart has successfully expanded into countries such as Canada, Mexico, and China, however; they were unsuccessful in Germany and Japan. The reason the expansion in these countries failed was mainly due to the cultural differences. Due to political issues in the United States Wal-Mart looks to further this globalization into Brazil and India. “About ten percent of all Americans refuse to shop at Wal-Mart for essentially political reasons.” Wal-Mart also encountered many social and ethical issues relating to the cheap oversees labor, their low wages to employees, their lack of overtime pay, and their high deductibles on health insurance.
    These business practices are affecting businesses all across America and changing the communities they enter into. By Wal-Mart providing low monthly premiums and high deductibles they are forcing other businesses to copy these practices in order to stay competitive. Although these practices are reducing their overall costs and decreasing prices to consumers, it has lead to the mistreatment of their employees.

  47. Greg Feltes

    Nelson Lichtenstein wraps up “Retail Revolution” with a look at the business environment that Wal-Mart created. The overall decreasing pay and benefits of employees, with the general business model of hyper-thin margins and new market expansion, has literally created a toxic environment for Wal-Marts current strategy and growth mechanism. How do you conquer more retail landscapes when you have literally conquered all possible areas that you can conquer? This atrophy of the middle class is the very basis for Wal-Mart’s future problems. It has led every other company down a cloudy path that no one can effectively navigate and perhaps only drastic government intervention is the answer to the uncertainty that Wal-Mart has thrived cultivated and thrived on. Only time will tell.

  48. Guangyi Li

    Sam Walton always carried his “Beat Yesterday Book” that states sales and expenses incurred in Walmart to push his managers to improve on previous figures (92). Since the store managers have little influence over sales volume, the only way for them to meet Mr. Walton’s expectation is to exploit the maximum amount of labor out of their associates while holding labor cost down. Sometimes, managers at Walmart even deliberately used unreasonable causes to fire associates and had their assistant managers to plug the gaps to save money. Walmart has constantly fought with labor unions which they referred as “third-party representatives” since it expanded outside its magic circle. Its campaigns usually demonized the unions as “blood-sucking parasites living off the productive labor (148).” In addition, Walmart kept its own people on key tasks and relentlessly eliminated all the workers who might involve with the unions. In the early 1980s, Walmart expanded its supply chain to China and became its own importer to enjoy the cheap goods that allow them to further lower their costs. Simultaneously, it also initiated the “Buy America Program” to keep more production in the United States as requested by Governor Bill Clinton (155).

    It was astonishing to find that Walmart consider high turnover as one of its competitive advantage. Managers at Walmart believed high turnover keeps the workforce green because it limits the wage-raises and benefits to a few experienced workers (102). Moreover, Walmart treated its “Buy America program” as a two-edged sword is very insightful. This program not only portrayed Walmart as a patriotic organization, it also forced foreign suppliers to lower their prices. It would be interesting to find out where Walmart would expand its supply chain as the labor cost in China increase over time.

  49. Guangyi Li

    The last section of “The Retail Revolution” depicts Walmart’s aggressive expansion into the foreign markets and the obstacles it has encountered in both developed and developing countries. Walmart’s failures were often resulted from its ignorance of the cultural difference due to its overexpansion. Subsequently, the author focuses on Walmart’s continuous efforts to implement its EDLP strategy through integrating its value chain system with its suppliers and lowering its insurance liabilities to its employees. Eventually, the author pointed out that Walmart’s controversial business model was customized to meet the needs of the majority in the United States who vote for the success of Walmart.

    Walmart’s failure in parts of its international expansion proves that its previous success has not solely based on its core competences, but a combination of the U.S. politics, culture, and markets as well. For instance, the nationwide revolt against property taxes which left public officials desperate for sales tax as new source of revenue has been a pivotal factor to Walmart’s gigantic expansion over the last decades (206).

  50. Chunjun Jiang

    The first part of the “The Retail Revolution” actually tells us how Walmart start and develop its business. It tells a lot about the Sam Walton’s personality which predict his business success in the future. It tells how Sam got the chance to transmit himself from a middle-man to a retailer. It also illustrate the major sucessful trait the auther believe for his model. For example, his political background, his talent usage of human capital, his deep investigation on customer’s need.

    In my point of view, all the successes of corporation can not leave two basic elements: the bet on the customers’ needs and the collection of original capital. Talking about Walmart, their strategy on price is exactly what the customer need. Also because of his father-in-law, he easliy accomplished his original capital collection. Moreover, he is lucky as he took the advantage of Great Depression to purchase a lot of fixed assets in a incrediblly low price.

  51. Brian Chin

    At a little less than half way through the book, I have been very surprised at much of Wal-Mart’s history. The early chapters of the book tell the story of Sam Walton and the experiences he has that lead him to the creation of his own retail store. It starts off by describing the world that Sam Walton was brought into, the Ozarks of northwest Arkansas around the Great Depression. Sam Walton even described the area as, “This part of Arkansas didn’t come out of the Depression until the early 1960’s.” (25) He got his experience in the retail industry through the big names that he now all fear his company. Companies like J.C. Penny and the Ben Franklin chain is where he learned the tools of the trade and even where he may even have stayed if he hadn’t had his Ben Franklin store pulled out from beneath him. After establishing the groundwork for the grand opening of the Wal-Mart chain, Lichtenstein sets out to describe the company culture that made entire families flock to be employed by Wal-Mart. Referring to Sam Walton, “He became a cult figure years before his death, famous for his country twang, muddy boots, and the aging pickup trucks he drove around Bentonville. His persona embodied Wal-Mart’s reputation as an earthy and virtuous enterprise.” (84)
    What really struck me was the way that employees truly believed in Wal-Mart, treating it like a way of life rather than just a career. The idea of, “First God, then family, then Wal-Mart!” didn’t even seem to apply in many situations. Given some of the firsthand accounts made by employees, they seem to put working for Wal-Mart and trying to get that promotion above their families. Charles R. testified, “I can never pay back this great company for what they did for me and my family, I love Wal-Mart, and I am Wal-Mart. Thank you Sam. I can never repay you.” (90) The cult following that Wal-Mart had created is something that is seemingly non-existent from my experience with the company. I also found the unfortunate parts of Sam Walton’s earlier business workings interesting. As I have only known Wal-Mart to be the powerhouse that it is in today’s market, it was strange to read about the company’s founder having to borrow money from his wife’s family, which also means that if she had just not lent him that money, the world may have never seen Wal-Mart. This happened again as he was looking for investors to start the actual Wal-Mart brand. When asking Herbert Gibson for money, he received a very blunt response. “Do you have on hundred thousand dollars? Well, we buy in carload lots. Takes a lot of money to do that,” Gibson told him. “You’re not fixed to do business with us. Good-bye.” (40) Now that the market is much more “market driving,” it’s hard to imagine anyone saying no to Wal-Mart.

  52. Romy Hilbig

    The beginning of the book tells the story of Sam Waltons retail businesses and how he established Wal-Mart. In the 1970s Wal-Marts miracle decade started and analysts already astounded that Wal-Mart has a remarkable vision and “its management, motivation, communications and responsiveness to change are unique in the retailing industry” (p.34) Wal-Mart revolutionized the retail business in many ways. They improved their supply chain to reduce costs (just-in-time deliveries) and they changed the relationship between merchants and vendors by cutting out salesmen, reps or jobbers and introduced the bar code. Because of that they could rolled out Retail Link, a huge data warehouse which measures everything what customers and employees do. The so called Wal-Mart-Effect was introduced because the power switched from vendors to Wal-Mart. Beside that Wal-Mart created a strong culture “Your Hometown Wal-Mart”. Employees’ loves Wal-Mart and they believed to be Wal-Mart. In the beginnings Wal-Mart was very conservative organization. Only men got higher positions and women had to do simple tasks. They are also recruiting students with B and C grades from colleges for their SIFE program. On the one hand you could argue they are giving people a good opportunity but on the other hand one could say that they are deliberately choosing employees with a lower intellectual level to implement their strong “I´m Wal-Mart”-culture. After the first chapter, I think, Nelson Lichtenstein gives a very good description how Wal-Wart is. The following sentence puts it in a nutshell: “Wal-Mart created a self-contained corporate culture, an ideology of family, faith, and folk communalism that to this day coexist in strange harmony with a Dickensian world of low wages, job insecurity and pervasive corporate surveillance” (p.7)

  53. Chunjun Jiang

    The second part of the book illustrates the basic strategy Wal-Mart used to compete in the market. It employs its self transportation system to save the logistic costs. It outsource the buyer is China to reduce their purchasing costs. It imply the barcode system to cut off the inventory volume in central logistic tremendously and avoid the over stock by inaccurate expectation. More important, in order to save the human labor, it limits the health insurance, employs a lot of part-time works and forbids the overtime work. What Wal-Mart did in saving the human labor causes its conflict with the Union.
    In order to get the Union out of Wal-Mart, it always avoids entering to the market where unions are very powerful. It also launches a profit sharing program to make the employee feel like they are the owners of the company and advocates its open-door policy which allows the employees to skip several manager levels and complain to a upper-level manager.

  54. Kenny Zeitler

    The broad take away from my first one hundred pages of the Retail Revolution can be summarized by the following statement,

    “Lichenstein’s view of the growth dynamics that have characterized Walmart is nothing more than a long winded bout against capitalism and free enterprise, based off of civics-textbook like platitudes that bear ABSOLUTELY no resemblance to reality whatsoever.”

    Aside from Lichenstein’s obsession with driving home the “successes” of FDR’s New Deal (which he refers to over 30 times in the first 100 pages), his critical analysis of Walmart is extremely in-depth and offers a view of Wal-Mart in an historical context that makes even the most devoted Wal-Mart purporter question his/her allegiance. Lichenstein does a terrific job of describing how Wal-Mart is not in RETAIL business, but in the LOGISTICS business. Understanding how Mr. Sam built his empire is vividly and logically laid out by Lichenstein, as he describes Wal-Mart’s supply chain, how it has evolved over time, and how Wal-Mart capitalizes on the data they acquire. His description of the Wal-Mart recruiting process is fascinating. Understanding how the religious element of their history compliments the company culture is critical to recognizing how a true Wal-Mart “family” is established. Lichenstein recognizes that a combination of leadership elements aside from supervisory leadership has given Wal-Mart “servant leaders” the ability to influence their “associates” in a way that is different from any other firm in the world.

    After devoting my first few hours towards the Retail Revolution, I am left with little more than a reminder of how far left America has drifted..

  55. Brian Chin

    Nearing the end of the book, I’ve seen a lot more of what I expected to see in a book chronicling the impact of Wal-Mart. The second section describes the hidden costs that were saved in order to be the top discount retailer and how they overcame many of their initial obstacles. It also transitions from the way that people love the giant retailer to the way it has left thousands feeling robbed and deserted.
    In the first section, Sam Walton is portrayed as a man who learned through experience and knew exactly how to get people on board with his project, ultimately leading to a successful and relatively happy company. But it is in the second section where the secrets are revealed. Wal-Mart was rising at a time when labor laws were not well established or enforced. This allowed them to find a great deal of loopholes to cut costs such as unpaid overtime and low wages. Sam Walton knew that the labor costs needed to stay low so after the new minimum wage laws were passed, he simply ignored them. After finally being court ordered to reissue checks for back pay, he issued the checks and then told his employees, “I’ll fire anyone who cashes the check.” (119) This was a drastic change from the Sam Walton described in earlier chapters. The hardships of daily employee life were defined for women and individuals trying to move up the corporate ladder. The book uses Julie Pierce as an example of a woman was putting in sixty and seventy hour work weeks and moved her family several times hoping to get own store. About 7 years after she started as an hourly associate she was fired. Her experience was not unique in the sense that it became normal employees to work overtime without complaining, hoping to get one more promotion that never happened. Wal-Mart avoided paying for the overtime and the attitude of most managers was simply, “If you are working off the clock, I don’t want to know about it.” (143)
    A large portion of the book focuses on the affect of unionization, which is something that I never realized, was such a critical point in the company’s history, nor did I ever realize the threats that came with it. The crusade of John Tate and his war against unionization across America and how Wal-Mart got everyone on board with them, while scary in some ways, was also an impressive feat. A union would may have taken some of Wal-Mart’s bargaining power away from them, which is one the brands greatest assets.
    The final part of this section was focused on the international expansion of the brand and how it succeeded in Asia, but failed in Germany and Japan. For the company that always chased low cost, the use of labor overseas seems obvious. But Wal-Mart went through great lengths to maintain the Buy American program and to win over the Chinese people as well. The comparisons between Sam Walton and Mao Zedong led to a non-American corporate structure in the Chinese factories which allowed Wal-Mart to feel like the it did when it first started in the Ozarks. It was so strong that ACFTU leader Chen Siming said that, “We trade union leaders will never organize the employees in launching a strike or asking for unreasonable benefits.” (267) With China on board, Wal-Mart had a large competitive advantage, despite troubles in Germany and Japan.
    In one respect, the way Wal-Mart has maintained its position has been unethical, undermining, and abusive. But the world still bows to the low prices across the globe because of tactics similar to that of WWII propaganda.

  56. Brian Chin

    Upon finishing Lichtenstein’s book, one feels like an expert on the subject of anything “wal-mart.” The third section of the book focuses primarily on the politics of Wal-Mart and how globalization affects the future of the company. Lichtenstein makes it very clear that there are several changes in the world that will have an impact on Wal-Mart despite its success through the recession of the 2000’s. In this section, the book refers to the low cost of benefits to Wal-Mart as a cost saving tactic but also as a criticism in politics. “Wal-Mart’s failure to provide health insurance for a majority of its 1.4 million domestic retail workers has therefore made the company a lightning rod for critics,” as Lichtenstein puts it. (286) The justification on Wal-Mart’s behalf as to why this number is so high is basically just that it’s expensive and it’s another area where money can be saved on their end. With tactics like these, it seems strange that so that the company is still as strong as it is, although Lichtenstein does touch upon the challenges that face Wal-Mart in the coming years. The politics of Wal-Mart’s business practices have been notably been supported and supportive of the right wing. Ideas such as keeping government regulation at bay have allowed Wal-Mart to use every loophole it could find and push costs to manufacturers. The shift from George W. Bush’s presidency to the democratic Barack Obama appeared to be a tremendous threat for Wal-Mart, although it hasn’t hurt Wal-Mart as much as it forced it to change. The rise of the left-wing in Washington D.C. immediately prompted Wal-Mart to adjust its health care and benefits packages, allowing an increased number of employees to receive health care coverage, adopting green policies to promote environmentally friendly business, and even settled many of the wage and hour lawsuits that were lingering.
    The concluding section also refers to two of Wal-Marts largest competitors, Target Corporation and Costco, in order to show the differences and similarities in business models that may be crucial to future success. The fast rising Target Corporation was growing alarmingly fast but didn’t carry the same harsh connotations that Wal-Mart had to bear. But beyond a slightly different target market, design, and charity spending, “Target is in all other important respects a near clone of Wal-mart.” (333) Costco follows a different model that is based off of “good business.” (336) Rather than constantly looking for the best way to cut operating costs, Costco looked to cut turnover costs and save with employee retention. Even with these seemingly better strategies that other companies use that have kept them in the good eyes of the media, Wal-Mart is still the number one retailer in the world. Lichtenstein concludes “The Retail Revolution,” referencing the quote that Sam Walton made about one of Wal-Mart’s greatest strengths being able to change, alluding to the idea that with all of the changes in global politics and the development of foreign countries the Wal-Mart that dominated the market in the last two decades will not be the same. Wal-Mart may not be expanding as quickly as it would like to and they have certainly run into obstacles with unions, entering certain markets, and the U.S. government, but so far, for better or worse, Wal-Mart doesn’t look like it’s going anywhere but up.

  57. Kenny Zeitler

    My second round with the Retail Revolution proved to be in no way different than the first. Lichenstein’s sob story continues throughout the second 100 pages, as he paints Wal-Mart to be a critical player in the labor movement of the 1970’s and 80’s. John Tate, one of the biggest drivers of Wal-Mart policy, is clearly a hero in the eyes of those who wish to preserve capitalism. His strides against unions and the arbitrary subdivision of labor (i.e. waste), is something I hold in high regard.

    I can’t resist the temptation of quoting Lichenstein’s naive confidence in the government,
    “The progressives designed it, the New Dealers implemented it, and the administrators of the Great Society expanded unemployment coverage to far more women and people of color. But it’s a dead letter at Wal-Mart” (133).

    A serious look at the economics of the situation would at the very least warrant some discussion of the long term effects of these policies; although we cannot reduce it to an exact science, estimating the real cost of dolling out unemployment benefits reaches far beyond just the monetary sphere. These type of policies impact those who work, create jobs, and save. Unemployment insurance does not benefit any of these people, who pay for it when they consume goods and services. This type of policy benefits a small group at the expense of another. This is bad economics. Lichenstein should resign as the Director of the Center for the study of Work, Labor and Democracy.

  58. Romy Hilbig

    Wal-Mart focuses on an overall low price strategy. Parts of their price strategy are the “Beat yesterday” mentality and the “We care” program. The “We care” program is Wal-Marts offense to fight against trade unions because Wal-Mart proposes a profit-sharing plan for their employees. Additionally it codifies an open-door policy and gives employees access to store-level information on sales, profits and inventory. They established a Loss Prevention program and installed hidden store Cameras to follow the actions of customers, cashiers and union organizers. Furthermore, Wal-Mart supported the “Buy American” campaign and sold products with red-white-and-blue Buy American banners. Unfortunately in 1993 NBC discovered the false advertising of the Buy American campaign and the abusive child labor practices that occurs in their oversea supply chain. Wal-Mart apologized for the mislabeling of Buy America but they denial child labor and dangerous working conditions of their Chinese manufacturers which were obvious. Predominantly, Wal-Mart focuses on price and not on humanity. They are lying to customers and rip of their employees by controlling and pressuring them.

  59. Romy Hilbig

    Wal-Mart saw the globalization of its business model as the key to expand. They do well in Canada, Mexico, Brazil, United Kingdom and after some beginning obstacles with trade unions in China, too. Otherwise they failed in Japan, South Korea and Germany for both cultural and political reasons. They provide low health care to their employees and spend 37% less per covered employee compared to other competitors. At the same time, the Wal-Mart foundation is the biggest and active corporate philanthropy in America. Besides that Wal-Mart invested $500 million in a sustainable and environmental friendly supply chain.
    The health insurance plan of Wal-Mart symbolizes their priority of cost-conscious instead of humanity again. Actually Wal-Mart has money for higher wages or better health care based on their $ 20 billion assets of the Wal-Mart Foundation. Finally the Retail Revolution brought America cheap goods combined with risks and insecurity for millions in the domestic and international market.

  60. Bryan Miller

    The of the start of Nelson Lichtenstein’s book “The Retail Revolution” focuses on the rise of Sam Walton and how he transformed Wal-Mart into what it is today. Lichtenstein feels that Wal-Mart is the best example of how large retailers changed the American way of doing business. Sam Walton’s world was molded by the ideology held by the Middle and Southeastern United States, particularly Arkansas. It has been described as “backwards” when compared to the thinking of major metropolitan cities. How this unique culture has been a distinguishing feature of Wal-Mart. Bentonville, AR now receives global attention due to Walton’s savvy cost-cutting retail strategy. The first chapter provides a brief history of the competitors Wal-Mart had to overcome and how other company’s business models were adapted then adopted to Wal-Mart’s benefit. The use of bar technology and inventory management systems has boosted Wal-Mart to the premier model of distribution perfection. A top executive is quoted saying “The misconception is that we’re in the retail business, but in reality we’re in the distribution business” (pg.48). This illustrates the importance of a strong supply chain to Wal-Mart’s operations.
    Critically, I feel that Wal-Mart’s culture self-proclaimed family culture isn’t as strong or practical as corporate portrays. Some claim that other Wal-Mart employees provide the family and stability that they never had in their own life. However, it is evident in the multiple class action lawsuits Wal-Mart has face that problems exist. The lack of benefits, low pay, discrimination, and use of fear tactics are not the way to treat family. Benefits and low pay are firstly show the employer doesn’t care too much about their employee’s well-being. It is understandable that certain cost cutting measures are in place to operate a profitable business. The last two aspects of discrimination and fear tactics are non-excusable though. Not promoting women and certain minorities is both unethical and illegal. The use of fear of termination through culture always seemed present to employees, even if it wasn’t directly communicated to them.

  61. Bryan Miller

    In the middle section of the “Retail Revolution”, the two main Wal-Mart topics discussed are constant emphasis on financial performance and union opposition. The constant cost cutting measures on both employee labor and suppliers enable Wal-Mart to undercut the competitions prices. The “rollback” of employees weekly hours from the standard 40 hours to 34 hours set a precedent. Cutting these hours made it nearly impossible for accidental overtime to occur and help curb benefit packages. As noted in the book, sometimes employees will clock out, to avoid overtime, and then go back onto the floor in order to finish their workload. In such a situation, the associate is fearful of punishment in two ways, either of receiving overtime or not finish their workload. Both have possible punitive repercussions of termination, so the associate uses their personal time to finish Wal-Mart’s work.
    The second aspect touched upon was unionization. From the company’s inception, Wal-Mart has assumed a hostile tone towards unions. Wal-Mart wants to be solely in control of its employees and not by any outside party. To ensure things stay this way, corporate hotlines have been established in case talks of unionizing arise at a store. Once notified, corporate headquarters sends out a specialized legal and marketing team to the store. The team uses propaganda and fear tactics to persuade employees against the union.
    A criticism have with Wal-Mart is the power these specialized anti-union units have. The teams are located in Bentonville, AR and are immediately deployed to the troubled store, when an issue arises. From then on, they assume nearly absolute control. Monitoring and analyzing employees is their primary functions. After determining who to keep, they utilize a wide array of tools to make or force the other employees to leave, both legally and illegally. The extent and cost of these teams is quite excessive, instead of being more proactive and listening to some employee specific needs.

  62. Bryan Miller

    The final portion of the “Retail Revolution” highlights how Wal-Mart is an international business, thus there are differences how things are run in different countries. Success has occurred in the United Stated, Canada, Mexico and the United Kingdom. Wal-Mart has also encountered failure, most notably in Germany due to cultural and political tensions. Still there are some markets still to be determined such as China and Latin America. Wal-Mart does plan on adopting certain changes to increase the chances of success in these international markets.
    Domestically, Wal-Mart has had a tremendous impact on the small towns where stores are located. Local businesses are hurt by Wal-Mart low price competition and many eventually go out of business. The town’s cultures shifts dramatically with the “downtown district” receiving less attention and Wal-Mart becoming the new town epicenter. One benefit Wal-Mart does offer is sales and property taxes to the area. These funds increase the amount that can be distributed to roads, education and other public good programs.
    One critical argument about Wal-Mart in this section is the culture of its low end associates. Wal-Mart regards all of these people as expendable. However, this issue is exacerbated by the extremely low wages making Wal-Mart in essence the only place they can shop. With the income given, Wal-Mart’s low prices are the only place that employees have sustainable purchasing power to shop at. Shopping elsewhere is deemed too expensive, making millions of Americans directly dependant on Wal-Mart, without raising their standard of living.

  63. Agree with the last poster (Bryan), yes they increase property tax revenue, but at what expense. The high margin business and high paying jobs go away…….are they really helping?

  64. Michael Molligi

    The start of “The Retail Revolution” outlines Wal-Marts beginnings and more specifically explains how the company’s founder Sam Walton started the massive empire. It focuses on Walton’s upbringing which informs us of his desire to be in retail and how he connected growing up in the rural south to running a multi-billion dollar company.
    Walton ran Benjamin Franklin’s for five years successfully as is beginnings to retail. In fact, he specifically took a store that was failing and turned it around to profit. It was at this time that lease-holder decided to pull the lease and give the store to his son.
    Walton was furious but it forced him to look at finding capital to begin his own store. In turning to his wife and father-in-law, he gained the capital he needed, but (due to his wife’s bidding) had to stay in the Ozarks of Arkansas. Thus, the inception of the first Wal-Mart.
    The book continues on here to talk about the companies core competencies and how they have formed to become the largest employer in the world.
    One of the ideas here that stuck out to me more than any other was the fact that this massive retailer happened almost by accident. If Walton were to not been able to raise the capital he needed or even before that had he not been forced to leave the store he was running, would there have been a true Wal-Mart?
    It seems as though the structure of the retail industry during the time would have almost prevented the format that Walton imposed. Yet, with that being said, maybe Walton would have gone on to another company and pushed his ideas in a different light and maybe Kmart would be the Wal-Mart of today.

  65. Chunjun Jiang

    The last part talking about the Wal-Mart’s oversea expansion. Its global expansion steps are not as fast as they are at home. It had a huge success Canada and Mexico. It started well in Britain but its further developing plan was limited by British Government. It suffered a failure in Germany and Japan because of the cultural difference. It also occupies a small market share in China because they missed the early opportunity to enter the Chinese market.

    The arthur also talked about the constrant Wal-Mart faced with the local retail business. Economists found 60% of a new Wal-Mart store’s revenue came from those local retail outlets which close their door because of the price competition.he But the government still prefer one Wal-Mart to a cluster of local retail business simply because the tax.

    The last part is about the future of the retail industry. Target, a near clone of Wal-Mart, generate 65 billion revenues and is undoubtedly fast-rising. Costco who targets its costumer as middle strata has been labeled “the anti-Wal-Mart” by New York Times. Wal-Mart dominates the current retail industry. Question is who will be the next?

  66. Michael Molligi

    The second portion of the book goes on to talk about how Wal-Mart treats its employees. It has cut labor costs completely to a bare minimum. They did this by erasing overtime, changing the work-week to a 34 hours instead of 40, and have worked around firing people to influence them to quit instead. Wages are lower than other retailers and health benefits are so low that most employees have to get aid from a spouse or the government.

    From here we learn about the chronic theft that occurs at Wal-Mart. The company had to institute a Loss Prevention program corporate-wide to ensure issues of theft not so much from customers, but from employees.

    Finally the book transitions us in this section to find out about the company’s stance on unions. Basically, it’s not a love/hate, but a hate relationship for them and thus the company has done everything possible (including illegal actions) to stop unions from forming.

    I found it interesting in this section to learn about the companies approach to their employees. I used to manage an Auntie Anne’s Pretzel shop inside of Wal-Mart. Through this job, I got to know a lot of employees at Wal-Mart and it was interesting to see the “drone-look” that they had at work. I used to harp to my employees that we could give our customers something special by just offering a smile during their transaction. It’s funny to look back and now have an understanding where those “drone-looks” were coming from.

  67. Michael Molligi

    The final portion of “Retail Revolution” first dives into Wal-Mart’s expansion internationally. Wal-Mart has had some success and some relative failures when looking at their approach to pushing into other countries. It seems that the company went into most countries with the “Think Global, Act Global” mindset. Basically what has worked at home will work elsewhere.

    This may have been true for some of Wal-Mart’s expansion (especially in Canada), but it was certainly not the case in others. Specifically in Germany and Japan, Wal-Mart has not fared well. In fact, in Germany Wal-Mart has all but failed, as it seems the Germans did not like the structure of the stores from the size to the staff.

    This failure is becoming even more relevant in Japan as the company’s approach does not match the culture of Japanese shoppers. Wal-Mart’s low-cost structure is not one that the Japanese appreciate. The Japanese also do not find the big-box store appealing.

    Finally the book talks about how Wal-Mart is facing troubles politically (with a new Democratic government), with the maturing Chinese market (causing difficulty in finding cheap labor in mass), and with the fact that other companies are beginning to copy Wal-Mart’s model.

    The book’s ending probably interested me the most in the fact that the next quarter century or so may change the landscape completely for Wal-Mart. With the above mentioned problems Wal-Mart is facing, it will be interesting to see how they adapt and if they will stay as formidable a force as they have been.

    I would tend to think that they will continue to be a big player for awhile, but the fact that their models are becoming more and more easy to imitate leads me to believe that another company may start inching closer and closer to them. In fact, I wouldn’t be surprised if this model starts to fade in the future to lean closer and closer to models like

  68. Wei Liang Chen

    The first part of this book, “The Retail Revolution”, talks about how Sam Walton builds up his retailing empire. Undoubtedly, his personal abilities help him learn a lot from his previous employer and his competitors. Accordingly, he could come up with some good idea, such as building up his own distribution centers and opening stores in towns of ten thousand population or less. In addition, some environment factors, such as the development of automobile and the customer’s concerns of each penny, also makes Wal-Mart strong. There is no question that Wal-Mart could be a retailing giant.

    First of all, I was so surprised that Wal-Mart was started from south rural area. Normally, those areas are lack of capital and sources. Deeply thinking, it is such less competitive area that make business easily. Like some examples in my hometown, Taiwan, there are also some small restaurants starting from rural areas. After they build reputation, it is easy for them to expand to big cities.

  69. Wei Liang Chen

    The next part of this book is about Wal-Mart’s culture. Wal-Mart sees their employees as family and calls them associates in order to build a closer relationship. Also, if an associate performs below others, instead of being fired, he/she will be coached. Moreover, for the associate who devote himself to Wal-Mart, he/she will have a great chance to be promoted no matter how much educations he/she took, but opportunities are much less, of course. However, on the other hand, their wages are a little bit above the minimum, which is impossible to support a person who wants to get married and has children. Sometimes they even need to be subsidized by the government. What’s more, they were told that “they are not very important for company so that they are very easy to be replaced.”

    Every thing mentioned above is very controversial. It is obviously not the way you treat your family. However, this is how Sam Walton managed his associates. This is why Wal-Mart is more competitive in the retailing industry. He knew he did not need some young and clever guys who require higher payment. All he needed was someone who was able to scan items or to move and shelve items. Those are the majority in the society. It was hard for them to find a good job. Thus they were probably only qualified to work in Wal-Mart, even they did not like the wages.

  70. Wei Liang Chen

    The last part of this book is talking about Wal-Mart’s international expansion. Basically Wal-Mart just simply copies the same model that is used in American market to other countries. In some countries that have similar culture with the US this model may be success. However, in Germany and Japan, people do not like big-box store. Thus, Wal-Mart is forced to get out of the market. At the same time, due to Wal-Mart successful business model, people start to study Wal-Mart and more and more competitors start to mimic Wal-Mart’s business model. Besides, Wal-Mart constantly has political and labor issues that damage Wal-Mart’s reputation. I feel if Wal-Mart does not change anything to develop a better advantage, the competitive gap between themselves and other competitors will be smaller and smaller. Eventually, Wal-Mart will be out of the market.

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  72. This loyalty is also demonstrated with consumers. Everyone can agree with the low price guarantee that has become synonymous with Wal-Mart, but there are a couple of examples where whole families are extremely grateful for the affordability that the retailer provides. While not all consumers may go through the same lengths in defending Wal-Mart’s culture,

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  74. Paying attention on this blog.This loyalty is also demonstrated with consumers. Everyone can agree with the low price guarantee that has become synonymous with Wal-Mart, but there are a couple of examples where whole families are extremely grateful for the affordability that the retailer provides.

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