Presented By:Bhawna Sikka Nishant Pratap Arun Yadav Pooja Jain Sneha Gera Presented To:- Prof. Mani Thomas & Class Sarang Miskin Nakul Parnami
About Wal-Mart
The history of Wal-Mart can be traced back to the 1940s Sam Walton began his career in retailing at J.C. Penney 1943: Walton met the Butler Brothers who owned the retail chain Ben Franklin Stores Ozark Mountain town of 2,900 residents would become the headquarters for the world's largest retailer 1962: Walton invested 95% of the capital to open the first Wal-Mart store
2004: Wal-Mart Stores with sales of $256 billion accounted for 2% of the GDP Strategy: Everyday low prices and widespread presence Emerged as the largest retail store in the world As it grew in size, it began to draw the attention of the media and the labor unions Its non-unionized labor and anticompetitive practices faced resistance
Contd
Wal-Mart had been avoiding interaction with the media and was labeled media-shy Led to more criticisms against its public relations policies Labor lawsuits that alleged low wages, gender discrimination and illegal immigrant labor further damaged the companys image Consumer advocates publicly claimed that WalMart was bad and cancer on the economy
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Anti-globalization activists blamed the company for having exploited labor In sweatshops in Bangladesh, China and other Asian countries to offer low prices to the customers
Campaign Launched
2005: Launched a major public relations campaign in 100 newspapers like New York Times, USA Today and Wall Street Journal To assure: 1) It was a fair employer 2) It provided most of the health benefits to its employees Television advertisements featured Wal-Mart employees especially the women talking about Wal-Mart as a great working place
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For the first time in 43 years, the company had formally faced media Lee Scott, CEO, Wal-Mart Inc. signed the print advertisement: Wal-Mart is working for everyone Analysts felt that such a campaign was insufficient to revamp the image, damaged over years
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This reactive public relations and companys defensive stand would further harm the company by attracting more attention Other claimed that: 1) By buying media slots in major newspapers, the company was trying to gain favor from media 2) Also, the company was misleading the public with its false claims
For too long, others have had free rein to say things about our company that just arent true. We have decided its time to draw our own line in the sand. -Lee Scott, Chief Executive Officer, Wal-Mart Inc. I think they are going to have a tough time suddenly overcoming the perceptions of some people. It is going to be a tough sell on their part. -Larry Bevington, Chairman, Save our Community
Continued
Merchandise sold in an year was twice more than all it competitors. Communication strategy revolved around the lower price strategy that the company believed as its cornerstone. Smiley Yellow Face- promoted its superior image as a discount store that offered quality products at lowest prices. As Wal-Mart expanded from small towns to large cities, critics questioned its anticompetitive practices.
Continued.
Relied more on central circulars and national newspapers over local newspapers. In 1994, Fortune magazine named Wal-Mart as Most Admired Company in America. It also faced lawsuits. Critics sent ripples through the public leading to a large scale opposition against Wal-Mart Local Media were a big criticism to Wal-Marts expansion as it feared increase in failure rate of local stores.
In December 1992, , in an interview with NBC,CEO David Glass was questioned about the non-American labor and the low wages of the workers and child labor in sweatshops in Bangladesh For the charges, Glass affirmed that it was equally depend on American factories for its merchandize and that the Buy American campaign
NBC in another episode showed Made in USA labels being hung over the merchandise bought from overseas in most of the Wal-Mart stores Glass defended that it was mistake at store level and for the child labor he said, we dont buy from any vendor that uses child labor
Few weeks later, company arranged for another media interaction with channel
Glass remarked that he was not prepared with facts in previous interview This time, he said, he had evidence to prove that there is no child labor at the factories in Bangladesh When reporter insisted showing the videos taken at plants, Glass claimed the videotapes had been doctored and abruptly walked out of the interview.
When Wal-Mart was charged of impairing growth of small stores in the country, the company did not react and avoided any interaction with media.
In 1995, during a press meeting at Canada, the company officials seemed so unsure and dubious However, the growth continued. By 2002, it had 4800 stores and more than $8 billion in revenues.
The CEO confirmed that the campaign wanted to get rid of the MYTHS among the customers, union workers & the public about the company The CEO also issued an Open Letter in the ads stating that the company provides good jobs with excellent advancement opportunities PR Team was sent to major metro areas to attend media calls Employees themselves took initiative to send mails to editors refuting the criticisms In the Print Advertisements the company held some special interest groups & critics responsible for spreading misinformation
Wal-Marts benefits manager sent a letter to New York Times stating that the company provides health benefits to their employees The district manager wrote a similar letter to The Salt Lake Tribune The CEO became the 1st person to address the National Retailer Federation Trade Group In which he openly condemned the medias wide coverage on its imports from china & employees labor policies
The executives declared that IF the policies would have been so bad then the chain would not have grown to the size it did It changed its low prices proposition which had been guiding its advertising strategy The commercials the released were not meant to sell any product but focused on creating overall goodwill about the company
Meanwhile, as the company was working towards restoring good employers image, Federal raids in the store in the country bought to light 200 workers with illegal immigration licenses However it reported that the Federal Government had betrayed themas it stated that it had already agreed with Federal Government to corporate with the immigration officers in exchange of which it was to be left untouched
An internal lawyer was appointed to regularly investigate the hiring practices of the company The company also began to actively corporate to smoothen the investigation process A professor specializing in Labor Issues stated that I think we have reached a critical mass of bad publicity for Wal-Mart. Settlements, as expensive as they are, stop the bleeding.
Launching testimonial advertisements 1st time increasing its political donations to $1 million Other advertisements shoed hoe Wal-Mart contributed to other local communities In an alliance with NPR (National Public Radio) , WalMart announced in radio about it being a good employer It further began to offer scholarship for journalist studies in about 10 universities nationwide
Some observers claimed that the company was seeing corporate benefits
Wal-Marts very success may be working against it. Big empires are hard to manage, the public tends to mistrust institutions that get too mighty. David Berkowitz (Brand Consultant)
Wal-Mart- Accused of doing PR the wrong way. What went wrong ? Media stone-walling. No Comment strategy. Companys hesitant attitude. Remedial Measures undertaken : Paid search Ads from Yahoo and others. Launched walmartfacts.com
walmartfacts.com
Press Releases. Community Fact Sheet Corporate & Financial Fact Sheet Health & Wellness Fact Sheet Opportunity Fact Sheet Sustainability Fact Sheet How many jobs we provide Average wages Supplier jobs we support How we give back in your community
Stock Value
Year Stock Price ($) FY High Jan 04 Jan 03 Jan 02 Jan 01 Jan 00 Jan 99 Jan 98 Jan 97 Jan 96 Jan 95 60.75 63.94 59.98 64.94 70.25 43.22 20.97 14.13 13.81 14.63 FY Low 46.01 41.50 41.50 41.44 38.88 20.09 11.50 10.06 9.55 10.31 FY Close 53.85 47.80 59.98 56.80 54.75 43.00 19.91 11.88 10.19 11.44 P/E High 29 35 40 46 56 44 27 21 23 25 Low 22 23 28 30 31 20 15 15 16 17 Per Share ($) Earns 2.07 1.81 1.49 1.40 1.21 .99 .78 .67 .60 .59 Div. .36 .30 .28 .24 .20 .16 .14 .11 .10 .09 Book Value 10.12 8.95 7.88 7.01 5.80 4.75 4.13 3.75 3.22 2.77
Conclusion
Wal-Mart has been growing at an impressive rate. But, there is no smoke without fire. Present hard facts and figures to the media. Adopt media friendly strategy with backup. Solve problems from within.