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    Assignment 3

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    laksh goyal
    Walmart announced a new "green" environmental initiative to its 100,000 suppliers in 2009 that they must adhere to. Suppliers will have to estimate environmental costs, allow Walmart to rate them, and disclose this on product labels. The program costs will be borne by suppliers. If suppliers do not participate, Walmart will likely drop them. Walmart is using its power over suppliers, many of which are much smaller, to implement this program and control suppliers' environmental practices.

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    Assignment 3

    Uploaded by

    laksh goyal
    726 views2 pages
    Walmart announced a new "green" environmental initiative to its 100,000 suppliers in 2009 that they must adhere to. Suppliers will have to estimate environmental costs, allow Walmart to rate them, and disclose this on product labels. The program costs will be borne by suppliers. If suppliers do not participate, Walmart will likely drop them. Walmart is using its power over suppliers, many of which are much smaller, to implement this program and control suppliers' environmental practices.

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    Walmart announced a new "green" environmental initiative to its 100,000 suppliers in 2009 that they must adhere to. Suppliers will have to estimate environmental costs, allow Walmart to rate them, and disclose this on product labels. The program costs will be borne by suppliers. If suppliers do not participate, Walmart will likely drop them. Walmart is using its power over suppliers, many of which are much smaller, to implement this program and control suppliers' environmental practices.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    726 views2 pages

    Assignment 3

    Uploaded by

    laksh goyal
    Walmart announced a new "green" environmental initiative to its 100,000 suppliers in 2009 that they must adhere to. Suppliers will have to estimate environmental costs, allow Walmart to rate them, and disclose this on product labels. The program costs will be borne by suppliers. If suppliers do not participate, Walmart will likely drop them. Walmart is using its power over suppliers, many of which are much smaller, to implement this program and control suppliers' environmental practices.

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    © All Rights Reserved
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    Assignment 3

    In the summer of 2009, Walmart, the world’s largest retailer, left no doubt about its

    enormous power in the marketing channel. Walmart announced to all manufacturers whose

    products it sells that they must adhere to Walmart’s new “green” environmental initiative. The

    manufacturers must estimate and disclose the environmental costs of producing their products

    and then allow Walmart to use that information to develop a “green” rating system that will be

    disclosed to consumers on product labels. The cost of the “green” program will be borne entirely

    by the 100,000 Walmart suppliers. Although the program will take a number of years to fully

    implement, some parts of it may be in place by as early as mid-2011. Suppliers will not be able

    to opt out of this program. So all of them, from the largest to the smallest, will have to

    participate. If they do not, Walmart has made it clear that those suppliers will likely be dropped

    by the giant retailer.

    What do you think Walmart is trying to accomplish here by exercising its great power in

    the marketing channel?

    In this situation Walmart is using its great power to be as competitive and bigger than the

    other suppliers who are smaller. The power Walmart is using is Coercive power. Walmart is

    taking over the small and dependent of them. Suppliers will not go against a company as big as

    Walmart because they do not have that much power. Walmart has its own environment and other

    suppliers must estimate the environmental cost of making their own products and figure out how

    to produce this as quickly as Walmart would. The environment would have to be green just like

    Walmart, which can be hard for other companies to do. Since Walmart has a green environment
    they will h also have an green system that can go on consumers product labels. The price of the

    green labels/program will be from the 100,000 suppliers Walmart has. They can not leave the

    green program Walmart has set up for them. If they leave the program, then Walmart will not be

    able to have the supplies or participation from the 100,000 suppliers that it needs. This is how

    Walmart is using the Coercive power. It is basically where a big company using its power to over

    turn a smaller company, or in this case they are bullying all the suppliers they have because they

    are smaller than Walmart. The smaller companies’ suppliers are dependent on a bigger

    company’s mass trading system. They need their large volume of trade to stay in business.

    Another power Walmart is using is Legitimate power. Walmart is trying to take over a smaller

    company. They are bullying their way into another business and will not stop until they have

    power over them. Legitimate power is when a bigger company takes over or dictates the

    suppliers to gain access and accept the green environment. The companies would then have no

    choice and are forced to accept the cost of the green environment from the suppliers. This can

    somewhat be an advantage for them. It is giving them the choice to have bigger orders and have

    more value in their supplies. This is another power that is being exercised. The Reward power is

    when a company is giving larger orders of value to their suppliers. It can vary in size. Another

    power Walmart is exercising is Referent power. This is when the supplies are achieving the goal

    of enhancing their volumes as well as trade. This can also lead into and power. A large supply

    base which is can be a large supplier for a specific product. This is called Expert power.

    Walmart’s main purpose is to take over as many mini companies as they can. If the mini

    companies have the same target audience as Walmart and the same goals, then Walmart will

    exercise these powers to take over the other businesses.

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