ALTERNATIVE #1

Wal-Mart should venture into financial services by purchasing and then operating under its own charter an industrial loan company (ILC).

Advantages:

By entering into the financial services industry through the formation of an ILC, Wal-Mart could:

· Potentially save a penny on each debit card transaction.

· Offer their own VISA and MasterCard brand of credit cards and save approximately 2 cents for each credit card transaction that uses their card.

· Earn approximately 2 cents for every VISA and MasterCard transaction completed at other businesses.

· Offer easy access to banking for the 20% of Wal-Mart’s customers who do not hold any bank accounts.

· Processes checks more quickly and receive payment faster.

· Save significantly on their bank fees.

· Reduce the number of checks they cash within the retail store.

· Offer check cashing and money orders for a smaller fee than other financial institutions.

· Save fees by paying their payroll out of their own bank.

Disadvantages

There are several potential ethical issues concerning a retailer being involved in financial services, such as:

· Not providing them with a loan since as a financial institution they may have access to borrowing money at a lower rate than as a corporation.

· Ensuring that processes are in place so that no issues arise when loaning monies to suppliers or competitors.

· Not utilizing their own financial institution to audit their books or have access to the movement of funds with Wal-Mart.

Some other disadvantages include:

· Having to supply the initial capital to fund this new business (to build the infrastructure, training).

· Being a new player in an already competitive and saturated marketplace.

· This new business endeavor may take some time, focus, and money away from Wal-Mart’s primary business, retailing.

Implementation

· Purchasing or creation of an ILC. (Wal-Mart could not own a bank regulated by the Federal Reserve, as it would then be illegal to operate retail stores.)

· Charter would be used to open their own branches in their stores. (This would allow for huge market coverage and benefit to consumers)

· Begin a marketing campaign to introduce the new service.

Measurements

Increased Revenues

Gain market share in financial services industry.

Continued growth and dominance in the retail industry by offering more services.

ALTERNATIVE #2

Wal-Mart should venture into a clothing line and in-home accessories that has a well-known name behind it. Wal-Mart’s competitors had strong campaigns with Martha Stewart and Jacquelyn Smith. With Martha Stewart’s image on the line and Kmart struggling financially, now is the time to target that key market segment so that they are followers of Wal-Mart products.

Advantages:

· Strong loyalty to the products when a relationship is formed.

· Currently, a section of a market that does not have a place to shop with money to spend.

· Presents Wal-Mart with a quality image rather than emphasis on low-cost quantity

· Solid potential for financial gain in that market.

Disadvantages

· A well-known spokesperson is costly to get on board with your company.

· The conduct of your spokesperson is always in the limelight. They must conduct themselves in a socially acceptable manner in their personal as well as professional life. It is sometimes very difficult for people to do.

Implementation

· Hire a company to determine who would be the most identifiable resource for Wal-Mart.

· Negotiate a contract with the spokesperson and Wal-Mart.

· Begin a marketing campaign to introduce the new product line with the new spokesperson.

Measurements

Increased Revenues

Product association with Wal-Mart and spokesperson

Continued growth and dominance in the retail industry.

ALTERNATIVE #3

Wal-Mart should invest in a campaign that increases the ratio of managers within their company to 50%. In addition, they should invest in a “family oriented” outreach program with the families of their management teams. Wal-Mart is facing legal troubles that they don’t allow females the same equal treatment as male managers. In addition, there is a great deal of negativity towards Wal-Mart for their treatment of managers.

Advantages:

· Strong loyalty from customers that trust an organization that can recognize they have a problem and focus on fixing it.

· Develop a program with labor unions that promotes safety of people within Wal-Mart’ s organization. It fosters a positive working relationship with unions and people working hard for the Wal-Mart organization.

· Women are vocal and a campaign to promote women in management will get the word out about Wal-Mart as a fair equitable employer.

· Women predominately are the shoppers in relationships. Targeting a campaign to help women will bring in that segment of the market, which will ultimately lead to higher profits.

· Wal-Mart should stop the “secret” purchase of insurance policies and be open and direct with their management teams.

Disadvantages

· Company has to publicly recognize that they have a problem within their company. This could open them up to cost the company billions in lawsuits.

· Establishing a new program to promote worker safety brings to light some of the issues that Wal-Mart has had and some employees might not have knowledge of the situation. Any new program brings the problems to the forefront and problems gain nation wide recognition.

Implementation

· Hire an outside firm to develop the program to target the promotion of female managers.

· Form Work Improvement groups to develop a program for worker safety that management can implement in all stores.

Measurements

Increased loyalty from employees and low turnover rates.

Positive presentation and communication being promoted by female workers.

RECOMMENDED: ALTERNATIVE#2

Recommended Alternative-Wal-Mart partners with a spokesperson for Fashions and in-home accessories. As Wal-Mart continues it's large expansion into the Supercenter format they need to increase sales in their Fashion area. In today's world, Wal-Mart is seen as the place to go for basics. If they want to attract the more affluent shopper who is not only focused on price, they need to bring in a more up-scale level of clothing to attract those guests. By bringing in Mary-Kate and Ashley Olsen they are beginning to bring on some name recognition for the younger shopper (11-19 year olds). It is recommended that they bring on a person, most likely a woman between the ages of 28-54 to be a spokesperson, based on the core shopper demographics of Wal-Mart. By working with a high level name, they can still maintain the private label rights to the products, which will allow them to maintain margins while keeping costs in line. If they do not take this step forward, they will not be able to maximize their sales in their Supercenters, which run on higher overhead than a traditional Wal-Mart. Supercenters are based on bringing in a high volume of shoppers, but if they are only purchasing grocery items, you have huge lost opportunities. To develop and evaluate this alternative, Wal-Mart must determine an individual that they want to work with, and create a line of Fashions. They can then measure whether this endeavor has increased sales and margin levels to a point where they receive ROI against the initial start-up costs and royalties paid to the spokesperson.