Should Wal-Mart Be Able to Open an Industrial Bank

Discussion in 'World Events' started by See Post, Mar 20, 2006.

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    Originally Posted By cape cod joe

    DVC--We got our computer desk for around $1900 yesterday> made in China. It was the best thing I could find. We bought it off an independent Cape Cod dealer. What else can you do except get the best deal and try to give the business to locals?
     
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    Originally Posted By DVC_dad

    Yes. I agree. Well atleast you didn't buy it at Walmart I guess.


    <---- ducks flying tomatoes
     
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    Originally Posted By DVC_dad

    ...must be one he!! of a computer desk at 2 grand! ;)
     
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    Originally Posted By cape cod joe

    No--Just a regular L shaped from cape discount office products> made in China like everything used to be made in Japan:(
     
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    Originally Posted By cape cod joe

    No--Just a regular L shaped from cape discount office products> made in China like everything used to be made in Japan:(
     
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    Originally Posted By TomSawyer

    >>It's the same business model as Wal-Mart.<<

    But not in the one key area where I have the biggest issue with Walmart - Target doesn't force price decreases on their vendors. The ever-decreasing price mantra at Walmart means that manufacturers are forced to use cheaper and shoddier materials in their products. Target's products are of a consistently higher quality than Walmart's products because they focus a little more on quality than on price.

    Walmart's business model is pretty predatory, designed to undercut every other retailer. Target and other discount retailers still want to get the best price to their consumers, but they look at the quality and price point of a product instead of looking solely at the price point, as Walmart does.

    The following link goes to an article that explains why you won't find Snapper lawnmowers at Walmart. In a nutshell, the CEO of Snapper "saw a whirlpool of lower prices, collapsing profitability, offshore manufacturing, and the gradual but irresistible corrosion of the very qualities for which Snapper was known."

    (The CEO in the article does say he likes Walmart, but it wasn't right for his quality product.)

    <a href="http://www.fastcompany.com/magazine/102/open_snapper.html" target="_blank">http://www.fastcompany.com/mag
    azine/102/open_snapper.html</a>
     
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    Originally Posted By cape cod joe

    business model is pretty predatory
    Exactly why retailers on the cape fought so hard to keep them out for as long as they could!
     
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    Originally Posted By cmpaley

    >>..... and I'm glad to see not one of those d*** Walmart stores in Los Angeles proper.

    Yet .. we have a rather nice (new) Target on Santa Monica Blvd. and La Brea. I've even seen some celebrities in there. Shopping for Christmas lights in 2004 .. Andy Dick was spotted with a small onterage of friends.<<

    I'm at that Target all the time. It is very well laid out and HUGE! It's also always IMMACULATE.

    From what I've heard about Wal*Mart, it's night and day.
     
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    Originally Posted By DVC_dad

    Don't go to the circus...go to Walmart after dark.
     
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    Originally Posted By mrichmondj

    I sometimes think that the anti-WalMart rhetoric is actually a symptom of a larger malaise among consumers that they can no longer afford the full-price offerings that used to be associated with the middle class.

    When I think about all of the home appliances, furniture, boats, toys, and other clothes that my middle class parents lavished on my family growing up, it is mind boggling. I make essentially the same salary today as my Dad (adjusted for inflation), maybe a little bit more. However, if I set out to furnish my home in the same style, or tried to purchase a couple of jet skis for a weekend diversion, I would definitely be taking out a credit line to afford the same things that used to be within the income grasp of the middle class.

    It's not too encouraging to see your buying power weakened, even though you are bringing in a decent paycheck. I think it is convenient to blame WalMart, but I think there are a lot of other factors in the economy that have brought us to this point in American commerce whether or not WalMart ever entered the scene.

    I do agree that WalMart is predatory in their business practices, but I also think that a lot of businesses make zero effort to shore up their customer base. Target is often mentioned as a strong competitor to WalMart -- and they work awful hard to achieve that sort of notice. WalMart is a much bigger predator to businesses that would rather rest on their laurels and collect a steady income stream for their owners without reinvesting a dime in the business. It doesn't take a whole lot of effort to put those sorts of retailers into the going out of business category.
     
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    Originally Posted By EdisYoda

    >>It's the same business model as Wal-Mart.<<

    In addition to what Tom said, Target is different in another way. Target isn't in the game to put every other retailier out of business. They also know when to take "no, we don't want you here" for an answer.

    I love to tell the example I'm familiar with in the Duluth, Georgia area. When I moved to this area, there was an old, run down Walmart (with disgusting bathrooms that riveld the worst of the old gas station ones) and a brand new Super Target.

    Two years after the Super Target opened, Walmart closed their old disgusting store and opened 2 Walmart Super Centers less then 5 miles away from each other (with the Super Target right in the middle). I was in both Walmart stores the day they opened and the day after they opened. I talked to some of the staff about why they opened two stores so close to each other, and I was told by several of them that it was to put the Super Target out of business. They would then close one of the Walmart Super Centers. This was the last time I was in a Walmart store.

    BTW, a couple of points. The bathrooms in the new Walmarts were already a mess the day after opening. Also while the Super Target initially lost some buisness to the Walmart Super Centers, within 2 months sales were back to normal with people returning to the better quality store, merchandise and customer service.

    As a point of disclosure, I worked as a Demonstration Supervisor for a year and a half for the demonstration company that staffed the food demonstrations at Super Target for a year and a half. I did not, however work directly for Target.
     
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    Originally Posted By DVC_dad

    Yoda! You live in the Atlanta Metro still?
     
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    Originally Posted By EdisYoda

    Not any more... I moved to the San Diego area last June.
     
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    Originally Posted By oc_dean

    AWWWE!

    San Diego. Moved he did.

    City fun and life full of - with Gaslight district, .....there issss!

    Padawan Futurist, in neighborhood he was, last friday, he did. In pouring rain :(

    :~
     
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    Originally Posted By PlainoLJoe

    <<>DVC_Dad, you didn't mention that Walmart's insistence on ever-decreasing prices forces manufacturers to make shoddier products which also affects the consum>>

    One has nothing to do with the other. Its the consumer who is to blame for buying inferiour products not the manufacturers that purchase them. If the consumer didnt purchase them there would be no reason to make them. Example: cheap computers. Computers are cheap because they are concidered disposable. Talk to any regular schmo and they will tell you that in 6 months their computer is worhless and they go buy a new one. When in reality if you purchase the correct computer up front for a little bit more money, you would not have to repurchase one very year or so. Same with the crappy bicycles they sell and the horrible microwave ovens. Once again, if the consumer was even 1% smarter they would know to not buy a TV at a grocery story.
     
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    Originally Posted By PlainoLJoe

    again TOm, you continue to say that Walmart forces vendors to use cheaper materials, when in reality they are just carrying an inferior product. For example, they sell bicycles. Do you see them selling Trek, Giant or cannondale? No. THey sell huffy. Huffy didnt dumb down their bicycles because of walmart. They have always made horribly bicycles. Walmart simply chooses to sel the crappy bikes instead of the good ones. They sell tires, but do you see the top tire manufacturers in the world their? Even with carrying namebrand tires such as Good year, they do not carry their top tire for passenger vehicles. the Assurance. They do not carry Michelin (yes, THE largest tire corporation in the world) or other top tire manufacturers. The tires they CHOOSE to carry are the basic offerings of the companies they CHOOSE to sell. Goodyear doesnt make crappy tires specifically for walmart, they have always made a crappy line of tires to go along with their good line of tires. But walmart chooses to NOT sell the good stuff. They list goes on and on and on and on.


    <<I was told by several of them that it was to put the Super Target out of business. They would then close one of the Walmart Super Centers. This was the last time I was in a Walmart store.>>

    thats called competition. Its what being in business is all about. Getting more business than the other guy and hopefully all the business.
     
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    Originally Posted By TomSawyer

    >>Its the consumer who is to blame for buying inferiour products not the manufacturers that purchase them.<<

    In general, I agree. But Walmart does go the extra step of insisting that their vendors reduce their prices even if products are selling well at their current prices. The consumer demand for the product is fine and healthy, but Walmart still insists on a lower cost from their vendors.

    There are plenty of stores out there who choose not to sell the good stuff, but most of them don't insist that the shoddy stuff that they are selling be made even shoddier by demanding lower prices all the time.

    The lower price mantra sounds like a good thing for the consumer, but the lower quality products mean the consumer will have to replace them more often. And guess where they will go to replace them - the store they bought the first one from for such a "great" price.
     
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    Originally Posted By PlainoLJoe

    do you have any proof that walmat has forced any manufacturer to produce sub par products? Your just making it up as you go along because they have lower prices.

    Believe me, I dont like walmart because the stores are dirty and the employees seem to be the rudest of any retail establishment outside of radio shack. But lets call it like it is. They have lower prices, they dont pay their emoloyees alot, but if people didnt shop their, they wouldnt be opening new stores all the time. Its the consumer to blame. At least blame the correct people for walmarts problems.
     
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    Originally Posted By TomSawyer

    >>do you have any proof that walmat has forced any manufacturer to produce sub par products?<<

    I used to work in the corporate office of one of Walmart's competitors, and I remember the buyer I was working for complaining to a vendor about all the returns their products had. The vendor said they had to change their manufacturing process because Walmart demanded that they lower their production cost. But since I don't have a recording of that conversation, I'll point you to:

    <a href="http://www.fastcompany.com/magazine/77/walmart.html" target="_blank">http://www.fastcompany.com/mag
    azine/77/walmart.html</a>

    [Walmart] has a clear policy for suppliers: On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

    Of course, U.S. companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. Wal-Mart, which in the late 1980s and early 1990s trumpeted its claim to "Buy American," has doubled its imports from China in the past five years alone, buying some $12 billion in merchandise in 2002. That's nearly 10% of all Chinese exports to the United States.

    <snip>

    Wal-Mart is legendary for forcing its suppliers to redesign everything from their packaging to their computer systems. It is also legendary for quite straightforwardly telling them what it will pay for their goods.

    John Fitzgerald, a former vice president of Nabisco, remembers Wal-Mart's reaction to his company's plan to offer a 25-cent newspaper coupon for a large bag of Lifesavers in advance of Halloween. Wal-Mart told Nabisco to add up what it would spend on the promotion--for the newspaper ads, the coupons, and handling--and then just take that amount off the price instead. "That isn't necessarily good for the manufacturer," Fitzgerald says. "They need things that draw attention."

    It also is not unheard of for Wal-Mart to demand to examine the private financial records of a supplier, and to insist that its margins are too high and must be cut. And the smaller the supplier, one academic study shows, the greater the likelihood that it will be forced into damaging concessions.

    <snip>

    No one wants to end up in what is known among Wal-Mart vendors as the "penalty box"--punished, or even excluded from the store shelves, for saying something that makes Wal-Mart unhappy. (The penalty box is normally reserved for vendors who don't meet performance benchmarks, not for those who talk to the press.)

    "You won't hear anything negative from most people," says Paul Kelly, founder of Silvermine Consulting Group, a company that helps businesses work more effectively with retailers. "It would be committing suicide. If Wal-Mart takes something the wrong way, it's like Saddam Hussein. You just don't want to piss them off."

    <snip>

    The way to avoid being trapped in a spiral of growing business and shrinking profits, says Carey, is to innovate. "You need to bring Wal-Mart new products--products consumers need. Because with those, Wal-Mart doesn't have benchmarks to drive you down in price. They don't have historical data, you don't have competitors, they haven't bid the products out to private-label makers. That's how you can have higher prices and higher margins."

    Reasonable advice, but not universally useful. There has been an explosion of "innovation" in toothbrushes and toothpastes in the past five years, for instance; but a pickle is a pickle is a pickle.

    <snip>

    This July, in a mating that had the relieved air of lovers who had too long resisted embracing, Levi Strauss rolled blue jeans into every Wal-Mart doorway in the United States: 2,864 stores. Wal-Mart, seeking to expand its clothing business with more fashionable brands, promoted the clothes on its in-store TV network and with banners slipped over the security-tag detectors at exit doors...

    And so, Wal-Mart might rescue Levi Strauss. Except for one thing.

    Levi didn't actually have any clothes it could sell at Wal-Mart. Everything was too expensive. It had to develop a fresh line for mass retailers: the Levi Strauss Signature brand, featuring Levi Strauss's name on the back of the jeans...

    But the low-end business isn't a business Levi is known for, or one it had been particularly interested in. It's also a business in which Levi will find itself competing with lean, experienced players such as VF and Faded Glory. Levi's makeover might so improve its performance with its non-Wal-Mart suppliers that its established business will thrive, too. It is just as likely that any gains will be offset by the competitive pressures already dissolving Levi's premium brands, and by the cannibalization of its own sales. "It's hard to see how this relationship will boost Levi's higher-end business," says Paul Farris, a professor at the University of Virginia's Darden Graduate School of Business Administration. "It's easy to see how this will hurt the higher-end business."

    If Levi clothing is a runaway hit at Wal-Mart, that may indeed rescue Levi as a business. But what will have been rescued? The Signature line--it includes clothing for girls, boys, men, and women--is an odd departure for a company whose brand has long been an American icon. Some of the jeans have the look, the fingertip feel, of pricier Levis. But much of the clothing has the look and feel it must have, given its price (around $23 for adult pants): cheap. Cheap and disappointing to find labeled with Levi Strauss's name. And just five days before the cheery profit news, Levi had another announcement: It is closing its last two U.S. factories, both in San Antonio, and laying off more than 2,500 workers, or 21% of its workforce. A company that 22 years ago had 60 clothing plants in the United States--and that was known as one of the most socially reponsible corporations on the planet--will, by 2004, not make any clothes at all. It will just import them.

    <snip>

    If Wal-Mart doesn't like the pricing on something, says Andrew Whitman, who helped service Wal-Mart for years when he worked at General Foods and Kraft, they simply say, "At that price we no longer think it's a good value to our shopper. Therefore, we don't think we should carry it."

    Wal-Mart has also lulled shoppers into ignoring the difference between the price of something and the cost. Its unending focus on price underscores something that Americans are only starting to realize about globalization: Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."
     
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    Originally Posted By PlainoLJoe

    all of those examples were of the consumer purchasing sub par product and walmart pushing others out. They didnt for any company to make a inferior product. Levi's was mentioned. That company has been going bankrupt for several years now, long before walmart was a major player. Which is funny because more people are paying over $100 for a pair of jeans now than 10 years ago. Sales of high priced jeans has increased at least 10 fold and is more of a major player than dirt cheap denim.

    << If Wal-Mart takes something the wrong way, it's like Saddam Hussein. You just don't want to piss them off.">>

    That line was quite out of line and was meant to be a "shock" statement.

    That entire article is yet another piece of rhetoric.
     

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