FC NOW: The Fast Company Weblog
February 24, 2006
Wal-Mart's Battered Reputation
Wal-Mart yesterday outlined some plans to improve its employee health care benefits. The move comes at a time when the big-box retailer has clearly been bruised by a torrent of name-calling from labor groups, filmmakers, and other vocal critics in recent years. The most recent indication: The store tumbled from number four to number 12 in Fortune magazine's annual corporate survey of America's Most Admired Companies, released this week. That continues a veritable freefall from the number one spot in both 2003 and 2004, a time when the list included only the top 10.
General Electric climbed back into the top spot in Fortune's reputation survey this year. Also moving up were FedEx (No. 2), Procter & Gamble (No. 4), and Johnson & Johnson (No. 6).
Another big name dropping on Fortune's list was Dell -- last year's No. 1 -- another bottom-line obsessed company, which fell to No. 8 this year on missed earnings targets and a multi-million write-off of botched products.
Posted by Angus Loten at February 24, 2006 2:50 PM | Category: |
12 Comments
ADVERTISEMENT
FC NOW MENU
NEWSLETTERS
FC NOW CATEGORIES
FC READS
People are realizing walmart is a front for the chinese communist govt. Without walmart, china would still be known for greasy/a$$ ripping food
Joe, put down the bong and get real.
The ranking is nothing but highlight 2 unchanging facts :
a reinforcement of the fact that humans have a short term memory
Wall St always has and will always continue to focus on the NOW
WALMART is cracked the supply chain code and everyone else is late to the party. The dessert is over guys!
DELL, another supply chain genius will continue to kill the competitors one margin percent at a time.
GE, the world's best managerial school, rightly deserves its spot but pay heed you all : WMT and DELL will always hover nearby.
Buffet and Drucker swore by business models and they have unbeatable ones.
The moat is looooooong and infested. Attack at your own peril.
I piad Fast company for 1 year sud. and they quit sending it after 6 issues, and I sent them a copy of my canceled check, they never fixed the problem. Thats real supply chain mgt. Sell it, then dont ship it!
Walmart is the prime example of everything that is wrong with commerce in America -- a greedy corporation that hooks consumers on the crack of saving a few pennies then pimps them out for wages and psuedo-benefits that gaurantee thier continued dependence on shaving pennies wherever they can. It is the economics of the company store, practiced on a national scale.
As for Dell -- they are riding on past reputation. Sure, they are cheap, but they are not the quality that they used to be. I am a technology professional, and have been working with Dell computers a lot lately. The savings these days comes from a lack of generally accepted features and conveniences (eg motherboards that lack adequate slots, crappy and annoying pre-installed software, inattentive customer service, and so on).
If you drop from 4th to 12th in the Fortune 100 most admired companies you don't have a battered reputation. Not even a tiny bit bruised reputation. The noise about Walmart comes from those who can't compete, union hacks, and brainless Harvard undergrads making meaningful social comments. No one HAS to work there. And, no one HAS to buy there. Get real.
"Battered Reputation"... so who cares? Middle-America will continue to shop at Wal-Mart because Corporate America (i.e. Forbes) continues to support the evil it represents. In addition, the Federal and many state and local govenments (excluding Maryland and a few others...)will turn their backs on the crimes. Wal-Mart has figured out an algorithm to bring together the Seven Deadly Sins and make piles of money. Pure genius.
Wal-Mart has a lot going for it and the hundreds of thousands of employees and vendors who are a part of it, and the jillions of people who shop there. No, they're not perfect, but they are a business model that has the red, white and blue of successful American capitalism written all over it. Read Bob MacDonald's contrarian slant on the subject at http://www.cheattowin.net/macs-blog/
Mac is a frequent subject of FC's pages and a businessman who knows what's what.
Walmart employs many unemployable and lower income families, all of whom harbor more medical needs and result in larger health insurance claims. A tough position for them. Maybe they can get Internet health diagnosis from China. Don't laugh.
Having sold Walmart for ten years I can tell you they are cuthrought and sometimes evil in their dealings with their "PARTNERS". Fishes rot from the head down and this company has been doing just that for many years. Eventually this behaviour catches up with every company that has only the bottom line as its goal. Sears died when they started their banking operations and WalMart will succumb to the same fate in the next ten-fifteen years. As Sam Walton and David Glass both said as long as earnings growth = sales growth your stock grows. Well as late it has not.
All of the defenses of Wal Mart and Dell are amusing. I always love the "they don't have to work there" line. Where the delusion that there are just tons of jobs out there for absolutely everyone so you can pick and choose among them comes from is beyond me.
Wal Mart has pushed so hard for the absolute cheapest pricing to them that they force companies to move their manufacturing to the cheapest places possible. They do lovely things to give themselves deniability such as creating a policy against forcing employees to do unpaid labor but then they set goals and budgets for stores that force the managers to break the policy to meet them.
As far as Dell is concerned I am also in an IT department and deal with decisions on purchasing Dell equipment. I was interested in the fact that looking on their web site that 1 year warranties now cost extra on their standard computers. I've also had real problems with their customer service and have heard more than a few tales of woe about product quality. Cheap prices aren't worth much if the product doesn't function. The cost of me having to deal with the problems generated outweigh the savings. Companies will catch on to this fact.
They are all "bottom line" companies.
WalMart (No.12) happens to be the biggest and most sought after, whether by a customer or complaintant. GE (No.1), Proctor and Gamble (No.4) and Johnson & Johnson (No.6) can contibute their rankings in no small part to WalMart's (No.12) success. And FedEx (No.1) probably makes a few stops on behalf of every one of these companies.
The problem lies with the mechanism behind what drives their profits. Supply chain efficiencies (beating the vendor to death), as well as the need for "value added" goods (better, cheaper junk) are blamed for this growing dilema, and we the consumer fan those fires with our need to run our own lives the same way.
We want our "stuff", and tons of it.
Thank God we have Ebay, Forbes' (No.2) ranked Internet Services and Retailing Company, to provide a release valve so that we can go back and load up on more "stuff" we find on Google, the (No.1) in the same category, again having a small part in helping FedEx (No.1) stay busy. That'll show those WalMart guys (I wonder if the FedEx guy shops at WalMart and/ or online).
Maybe we should just thank the Jones's and their overwhelming ability to make us try to keep up with them?
people who shop at wal-mart should know what they're getting into before they walk through the doors.the place is a huge landfillthat sells their garbage cheap.but the price that gets paid for that garbage is immesurable.