The Walmart Effect

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The Walmart Effect by Mind Map: The Walmart Effect

1. Chapter 1: Who knew shopping was so important

1.1. Dictate product packaging to save money, as in deodorant boxes to save 5 cents

1.2. 16 new supercenters per month on last 5 years, 40% of space is for grocery

1.2.1. 3800 stores in US, more than 1 store per each county

1.3. Walmart initiated selling groceries on 1990, now is the leader of the market

1.4. Has 15% lower prices in average

1.5. 90% of Americans have a Walmart within 15 miles, 50% has one at 5 mile

1.6. Virtually no rivals, they sell more in Q1 than Target in all year

1.6.1. Taking business from small stores

1.7. Enormous control on suppliers and distributors

1.8. “One stop shopping”

1.9. Harm to environment and economy

1.10. Number 2 biggest company now

1.10.1. If Walmart would compete as an individual economy, it would rank on China's 8th trade partner, above Russia, Canada and Australia

1.10.2. Until 2006 was the biggest company

2. Chapter 2: Sam Walton’s ten-pound bass

2.1. Cost structure produces opportunity to sell at low price

2.2. Strict payroll rates

2.2.1. Employees have extra hours, no raises, no bonuses, but are demanded perfect work

2.3. Save money in not visually attractive stores because cheap products still sell that way

2.4. They reached a plateau?

3. Chapter 3: Makin Bacon, a Walmart fairytale

3.1. Control suppliers, they can make or break a company

3.1.1. Reach into day to day operations of small companies, shape them and take their decisions

3.2. Make more efficient work to save money as in the pallet trays

3.3. Can make that a company that refuses to cooperate on prices set by Walmart to close, or return with a worse deal

3.4. May put suppliers out of business

4. Chapter 4: The Squeeze

4.1. They have a non-ethic control over suppliers

4.1.1. Fishman asks: Should I shop at Walmart

4.2. “Squeeze” them for maintained prices

4.3. Threats to cut relationship, hence making suppliers close or lower their demand on a big scale

4.3.1. They make everyone to lower costs to compete, or close

4.4. Price pressure leaves no room for profit innovation

4.5. “Have the merchandise we agreed on, where we need it, when we need it”

5. Chapter 5: The man who said no to Walmart

5.1. “The Lure of Walmart’s volume, once you get hooked is like cocaine. You’ve created a monster of yourself”

5.1.1. Walmart tells the companies that without their demand they will close, and many do

5.2. 20% of Snapper’s demand was by Walmart

5.3. Quality is worse at low prices

5.4. Preserve quality name or sell volume

5.5. Determination to say “no” to the #1 company in the world

6. Chapter 6: What do we actually know about Walmart?

6.1. Immense secrecy within the company

6.1.1. Fewer than 20 lectures discussing their effect

6.2. On the short run, the prices decline between 1.5% - 3%, on the long run the decline is between 7% - 13%

6.3. A new Walmart means 150 to 300 employees, but only 30 new jobs, and 4 local businesses will close wiythin 4 years

6.4. Walmart prices lower the inflation rates by 15%, this helps to maintain low prices

6.5. People are willing to sacrifice a lot to save money

6.5.1. Each 7 days, 100 million people shop at Wallmart

6.5.2. Each year, 93% of all households shop at walmart at least once per year

7. Chapter 7: Salmon, shirts and the meaning of low prices

7.1. Costumers don’t think of the background of the products

7.1.1. "Sometimes cheap is inexpensive, sometimes is only cheap"

7.2. Lack of care from Walmart

7.3. Salmon production on a country with no wild salmon, affecting the environment and future disbalance of the habitat

7.4. Harsh examples on how low prices are accomplished

8. Chapter 8: The power of pennies

8.1. Wallmart really saves money on small things, all their sells on 2004 of $124 million would be equivalent to $146 billion on any other store

8.1.1. If a house spends on average $3000 per year on groseries in Walmart, they would spend $3,500 on any other store

8.2. Visiting the store could be awkward or even disgusting, but savings at long run are significant

8.3. You can only push the limits to a certain basement point

9. Chapter 9: Walmart and the decent society

9.1. Do we value cheap merchandise more than good jobs?

9.2. Do we really prefer one stop shopping although the low quality and background?

9.3. How low is too low?

9.4. Walmart is capable of everything to maintain low prices

9.5. These low costs are more costly than everyone realises

9.6. Walmart will continue to grow until a basement point is reached

9.6.1. In 1992, $44 billion sales and 370 thousand employees

9.6.2. In 2006, $240 billion sales and 1.2 million employees

10. Ian Alba de la Torre A01332529