CASE ANALYSIS Wal-Marts Sustainability Strategy (A) DATE OF SUBMISSION-24.12.

2012 SUBMITTED BY:SECTION-C, GROUP 13: Abhijit Das- 2012PGP005 Ashwin Vijayan- 2012PGP073 Kumar Abhishek- 2012PGP178 Payal Anand- 2012FPM10 Rajat- 2012PGP292 Sumit Bapuji Gedam- 2012PGP382 Vikash Kumar- 2012PGP438

Summary

Supply chain management has been the reason to Wal-Marts success and remains their primary competitive advantage. Their distribution system is generally regarded as the most efficient.They have an approach to supply chain management that has long emphasized visibility through the sharing of information with their suppliers. The overall approach of Wal-Mart in achieving sustainable growth

WHY SUSTAINABILITY?

RELEVANT TO WAL MART CASE

Creates a competitive advantage The biggest business opportunity of the21st century Reduce costs and generate savings Increases the notoriety & the brand value Reduce the environmental footprint

Decreasing customer base Depleting resources Increasing environmental policies Increasing awareness among consumers Maintaining daily low price philosophy Increasing number of innovation Increasing consciousness among stakeholders Large scale of operation at stake Objection for green house gas emission Increasing energy crisis

AMBITIOUS GOALS1.Be supplied 100 percent by renewable energy in the very near future 2. Create zero waste 3. Sell products that sustain Wal-Marts resources and the environment

MAJOR STRATEGYENGAGE- Identify and work with the broader community that could provide Information and other resources EXPLORE- Analyze the life cycle of particular products or services and investigate therelated environmental issues EXPAND- Looking in the value chain to identify which business activities are matched to the issues

SUPPLY CHAIN ISSUES THAT WAL-MART FACED IN ITS EFFORTS INa. Seafood

Continuity of certified fish was the greatest issue faced by Walmart in seafood network.

Suppliers were very price sensitive and they would shift to any other buyer given that they are offered any extra margin.

Quality control: As there was no way of judging between high quality samples and inferior quality, suppliers cheated which led to mark-offs and reduced markdowns.

High Up-front Cost to suppliers : Certification process costs anywhere between $50000 and $500000 and it was very difficult to convince fishermen to accept the economic sacrifices they would need to make in short run to be better off in the long run.

b. Electronics

Walmart had to make long term purchasing commitments in order to push manufactures to move to a new production line which was RoHS compliant.

Intellectual Property: Suppliers were very sensitive about sharing any information which they felt would enable their competitors to copy their advantage.

c. Textiles

Suppliers like Sara lee (Campion products) didnt thought about spinner, dyer, ginner or the farmer which led to Walmarts direct involvement with the farmers about acquiring cotton.

Farmers were not very excited about trying the new practices of growing organic cotton due to numerous new constraints which forced them to diversify crops to help the land regain nutrients.

d. Chemical Intensive Products

Manufacturers were hesitant to invest in testing health effects of commonplace or alternative chemicals because competitors would quickly copy and capitalize on the findings.

Networks were shy to share their ratings/metrics & effects of chemicals on health as they might have resulted in less presence on shelves of Walmart and an invitation to lawsuits , all resulting in lesser profits.

Based on common characteristics/nature, classification for the industry specific issues identified as above (in 2) Buying authentic and certified products: This issue was faced by Walmart in seafood category. Walmart also had to push electronic manufacturers to provide RoHS compliant product.

Unpredictability of Supplier: This issue was faced in seafood category for price sensitivity and electronics market for their information sensitivity. Also the quality control issue in case of seafood

Conservativeness of the suppliers/manufacturers: Textile manufacturers didnt thought about the farrmers and the chemical intensive product manufacturers were hesitant in testing health effects of alternative chemicals.

Aversion to new technology: This issue was faced in case of Textile industry farmers.

Veiling the side effects of the products: this happened majorly in the Chemical intensive products category.

Fear of the competitors: The manufacturers of electronics and chemical intensive products majorly faced this issue.

High certification costs: This issue led to suppliers more focus on short term goals and it happened majorly in the seafood category.