TNCs - Walmart - Lecture notes PDF

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Transnational Corporations Wal-mart

Background Info Wal-Mart is a chain of discount department stores including ASDA. Its one of the largest TNCs in the world and the largest retail TNC Wal-Mart began in 1962 when Sam Walton opened the first store in Arkansas, USA More stores opened across Arkansas, then across the USA, and more recently across the globe via the acquisition of other retail companies. E.g. Seiyu in Japan, ASDA in the UK and Bompreco in Brazil Some Wal-Mart stores continue trading under their own name e.g. ASDA, while others are rebranded as Wal-Mart Walmart is the world's largest company by revenue at $485bn

Where? (Structure, Spatial Distribution) The company offers nine retail formats: supercenters, supermarkets, discount stores, small markets, cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants. As of December 31, 2015, it has a total of 11,620 stores in 28 countries Wal-Mart divides its labour across different countries. Its headquarters are still in Arkansas, but most manufacturing is carried out where costs are lower (cheaper labour and resources) e.g. electronic goods are made in China and clothing is made in India

Wal-Mart is starting to expand into NICs like India which have huge new markets. For example, Wal-Mart and an Indian company called Bharti Enterprises are opening new retail outlets together in the style of Wal-Mart stores

Impacts Host Country Wal-Mart creates jobs in construction, manufacturing and retail services e.g. in Mexico, Wal-Mart employs over 209,000 people Wal-Mart has been criticized for forcing suppliers to accept low prices for their products People from the host country spend their money in the Wal-Mart stores, but most of the profits are sent back to the USA rather than contributing to the hosts economy Wal-Mart invests into environmentally friendly technologies e.g. in Puerto Rico, 23 stores are having solar panels fitted on their roofs to generate electricity Walmart use large areas of land for factories and stores Wal-Mart offers skilled jobs in LDC’s e.g. all the Wal-Mart stores in China are managed by local people, not by candidates from the USA Working conditions may be poor e.g. some suppliers have long working hours – Beximco in Bangladesh supplies clothing to Wal-Mart and although Bangladesh has maximum 60 hour working week, its claimed that Beximco employees regularly work 80 hours’ week Wal-Mart donates hundred of millions of dollars in countries where it operates e.g. in 2008, WalMart in Argentina donated $77,000 to local projects focusing on reducing hunger and supported 29 soup kitchens feeding nearly 12,000 people across the country

Country of Origin Wal-Mart provides consumers with a wide choice of goods e.g. supercenter stores sell things like garden furniture and car tyres as well as food and clothing Many Wal-Mart stores are open 24 hours a day so people can shop when they like Wal-Mart has been accused of having poor working conditions e.g. in 2005 Wal-Mart had to pay $172 million in compensation because employees were denied meal breaks Many jobs at Wal-Mart are poorly paid with few benefits Wal-Mart produce huge amounts of greenhouse gases but it has now opened ‘Green Stores’ that run on renewable energy Domestic stores are often large and out-of-town – building them takes up large areas of land and people driving to them causes traffic and pollution Low Prices – Wal-Mart is one of the cheapest supermarkets in USA Employment- each new store creates jobs e.g. Vineland (USA) opened in 2009, creating 700 jobs Loss of local businesses – Wal-Mart stores can cause smaller shops in the area to shutdown as they can’t match the low prices

This can cause the loss of local jobs e.g. it is estimated that for every 100 jobs created at WalMart, 50 retail jobs are lost from local businesses over the next 5 years...