Wal-Mart and its Urban Expansion Strategy

Institutional Affiliation
Wal-Mart and its Urban Expansion Strategy
In its attempt to open stores in Chicago, Wal-Mart has faced a number of
challenges including local protests, struggle, several frustrations, as
well as a living wage regulation (Marks, 2005). However, this does not
mean that the retail store should give up entering Chicago. No matter
how in the long run, Wal-Mart will open stores in the city.
After the submission of zoning applications in 2004 by Wal-Mart to set
up stores in Chicago, authorization was given though after the highly
controversial City Council and Zoning Board meetings Marks, A. (2005).
The contentious approval was followed by an attempt to endorse a living
wage regulation in addition to offering health benefits. Although the
City Council passed the living wage regulation, the same roused an
intense debate resulting to the initial Mayoral veto in seventeen years
(Elliot & Barbaro, 2006).
In 2006, the Chicago Federation of Labor set a living wage regulation
that required Wal-Mart to pay 9.25 dollars per hour plus 1.50 dollars as
benefits. The living wage was projected to amplify to ten dollars per
hour in 2010, a move that was rejected by the company. If Chicago settle
on allowing Wal-Mart set stores, a guarantee of better paying jobs as
well as health benefits must be provided (Weinswig & Tang, 2006).
The new lobby efforts by Walmart was countered by over dozen labor
unions and black churches by creationg a Good Jobs Chicago group to
fight the poor treatment of employees in Chicago. The group placed
billboards across the wards in Chicago demanding that large retailers
such as the Walmart provide good quality jobs with better wages, as well
as an affordable health care (Weinswig & Tang, 2006).
Owing to these challenges, it is true to say that for Wal-Mart to enter
into the Chicago market it has to agree to the demands of the Chicago
Federation of Labor. This is evidenced by the fact that, the company has
used every measure to establish stores in the city but they have not
been fruitful. Agreeing to these demands also implies that the company
will build a majority in the city council a move that is very important
for its growth (Weinswig & Tang, 2006). Wal-Mart should also avoid
using unworthy methods such as giving money to individuals to gain their
support. If Wal-Mart really desires to enter into Chicago, it must agree
to the Employee Free Choice.
Ever since its efforts to operate new stores in Chicago and Los Angeles
were rejected, the retailer came up with some strategies to ensure it
survives this. To begin with, it created a regional management
structure, as well as hired native political consultants to work in
collaboration with its department for real estates. Secondly, it
introduced community action networks – an online activity for the
native groups and individuals ready to speak for the proposed new stores
(Elliot & Barbaro, 2006). Besides, Walmart should adopt a more
political based strategy to its charitable giving. Evidently, this was
only focused to the existing stores. The Walmart Foundation funding
will be responsible for funding the charities in Chicago.
Lastly, the company should give in to the demands of the demands of the
Chicago Federation of Labour (Elliot & Barbaro, 2006). The retailer
should offer adequate health services and high quality jobs with good
wages to its employees.
References
Marks, A. (2005). Wal-Mart’s Next Battle: In the Big Apple, Christian
Science Monitor
Elliot, S. & Barbaro, M. (2006). Wal-Mart on the Hunt for an Extreme
Makeover, New York Times
Weinswig, D. & Tang, C. (2006). Equity Research: Wal-Mart Stores, Inc.
(WMT).
Citigroup Global Markets
WAL-MART AND ITS URBAN EXPANSION STRATEGY
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