Critique of “The Wal-Mart Way” #1

On reading the 5th chapter of the book “The Wal-Mart Way” (Nelson Business, 2004), I got a deep impression of the Wal-Mart’s attitude towards customers. The writer claimed that the motto of Wal-Mart is finding lower prices of different items. In this way, Wal-Mart could improve people’s life qualities. The author especially claimed that the pricing principle of Wal-Mart is “to sell as low as we can, not as high as we can”. This statement showed a generous image of the giant in retail industry. But is it true?

At my stand point, if this statement was true, Wal-Mart would be contradict with two basic principles in business area. For one thing, it is obviously impossible to maintain low prices without low costs. Although by reforming stores’ structure can Wal-Mart cut its costs, the key point to provide lower prices is to find more competitive suppliers. As the author noted, their associates did all they can to find a lower supplier. But that will evoke the suppliers to fight for lower costs of themselves. Therefore the workers of Wal-Mart’s suppliers may suffer due to this policy.

My second doubt about this policy is about the rights of Wal-Mart’s shareholders. Although for a long time the price of Wal-Mart’s stock has being striking the skyline, but the shareholders may need more. In this book the author estimated the sale scale of Wal-Mart. Based on his statistic we can assume that if the market can bear a one dollar price rise in every item, that will make billions of dollars profit for those Wal-Mart shareholders.