Homelessness And Walmart Essay, Research Paper

Homeless in America ” I never imagined that I would be homeless.” Although I have read this statement made over and over again, the facts behind it remain astonishing. The facts are that there are millions of homeless in America today. Many of these people had no choice but to become homeless. Economic problems such as being laid off work, or the rise in the cost of housing had lead people to live on the streets. Many of the homeless are women that have become divorced or have left home because of physical abuse. These women have no education because they have not been given the chance to go and get the education that it takes nowadays to get the job, so they are forced to live on the streets. They have no family to help them and they are left with no other choice. People with mental illnesses also become homeless quite often. These people are incapable of handling the stress of living on their own. These people get kicked out of their homes and are to ashamed to go to their families because of their illness, so we see them on the streets struggling to stay warm. Teenage mothers are also forced to live on the streets because their families will not help them. The fathers are not there and that forces them to live on the streets. So they must resort to prostitution to pay for the food that their young ones need to stay alive. There are many other people that become homeless for many different reasons. Some of these people can not help becoming homeless. Some of these people are the illegal immigrants that come here from other places to get a better life but end up not having enough money to make it in this hard world that we live in. Teenage runaways have different reasons for leaving home but all have the same reason for becoming homeless. They simply just do not have enough money. Others are drug and alcohol abusers and disabled people. With this list of people there must be some way that we can help these people. There has been many programs that have been available to help these homeless, but only have only succeeded in the short run and have failed in the long run. There has been homeless in America ever since the colonial times and not much progress has been made in the 200 plus years in helping these people. We have adopted programs such as FDR’s New Deal in which the government produced more jobs that took little skill, and made these jobs available to the poor. Social Security, which is not welfare, was adopted and is still going. It is where you pay into it while you work and when you for some reason become unable to work you will have this money. HUD housing has been available also to the homeless and the poor. We also have AFDC (Aid to Families with Dependent Children) and Welfare which gives federal money to homeless and poor and helps them get back on their feet. But these programs seem more to help the poor with home and not the poor without homes. We must think of ways to help the poor without homes – the homeless. There are many shelters were the homeless can go to get out of the cold and sleep on a cot instead of a bench or the hard ground, but families sometimes find it dangerous to sleep there in fear that the few possessions that they do own will be stolen. We should make these places safer for the homeless, and set up programs within these shelters that will help the homeless find jobs and homes. We could have the vacant apartment buildings opened and have the homeless stay there so that they have an address to get their selves a job. We could take some of the money that we are using to set up these little shelters, and set up larger ones in the cities that need them the most. We could all volunteer a little of our time to serve dinners to these people and to help build homes for the homeless. We could give a little of our money to those who have none. A little of our time will go a long way. Homelessness is a big problem in our country today, but there are very few programs set up to help them. We all need to work together to help those less fortunate because you would want someone to help you if you where in that position, so we should do our best to help them.Homeless: What has been done to decrease the problem? One of the largest growing concerns in Toronto is the constantly increasing number of citizens who are finding themselves living on the streets. With the decrease in the number of available jobs, the population of homeless people has literally boomed. My questions are not as simple to answer as they may appear. Why is a large portion of our community forced to live on the streets? What has be done to decrease the problem? These are the questions I will confront in my essay. With the economical wealth attributed to the name “Canada”, one would have to wonder why there is a homeless situation at all. This problem is especially evident in Canada’s wealthiest city, Toronto. When it comes to the affairs of the people, it is the government who should intervene. When I look at what the government has done with regard to the homeless problem, I have to doubt that everything is being done to eradicate it. The United Nations implemented a universal declaration of human rights. Article 25 Section 1 of this declaration states: Everyone has the right to a standard of living adequate for the health and well being of himself and of his family, including food, clothing, housing, and medical care and necessary social services, and to the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. This is a step in the right direction. However, this is not enough. These rights are subject to the discretion of the government of the country who decides to obey these universal rights. How much is “adequate”? The government, both at the federal and municipal levels, is currently working on new spending cuts. These cuts also include spending on welfare, unemployment and social services that are geared towards helping the homeless. Spending cuts can be seen as a necessity to maintain the country economically, but the reason for having a government in the first place is to take care of the people. How can this be done when money is being taken away from those services that are necessary to uphold this obligation? Simply put, it cannot. Those obligations are served by nonprofit organizations who depend on government grants to maintain a standard of care for those who need the services. The blame cannot be placed only on the government. Such a system of assistance depends on its beneficiaries to be honest and have some integrity. Many recipients of these services attempt to “cheat the system”. With no will to search for work many of these recipients remain at home and reap the benefits of their weekly cheques. This causes the government to create other services to control the amounts of money being distributed to those people. This process is costly and would be unnecessary if all of the recipients decided to take an honest approach to this service. What can the government do to decrease the homeless population? Although there is no quick and easy answer to solve this difficult problem, Toronto has the means to attempt economical ways to research and come up with ideas to solve it. Here in Ontario we have many excellent universities and colleges with equally excellent students who are taking courses in the political sciences. If the government were to cooperate with these universities and colleges and have them work in conjunction with the current research groups, then the answer to decrease the homeless population would be effectively answered. The government would encounter little expense and at the same time give the students a chance to implement what they are learning into real life situations. Everyone benefits from this idea and there are no losers. In conclusion I think that our homeless problem could eventually be rooted out entirely if everyone were to take part in the care of their fellow neighbour. If we were to stop being self-centered and start thinking about the other person who has less than us, I am sure that we would benefit from it. It isn’t all that hard. A few advertisements on the television and radio, a little push from our society’s leaders and we would be off on the right track. That worked for the recycling program. Now we should try employing this idea for even better reasons. I doubt that I will be around to see this idea in use all around the world, but I do hope that I can one day see it used here in Toronto. To assist all the homeless here in Toronto would be a very nice thing to see. The best part of it all would be to know that we, as a society, would be able to work together despite all the barriers created by racism and our naive nature when it comes to other heritages. Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that itis today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward forthirty years. Today, four years after his death, the company is still growing steadily. Wal-Mart executives continue to rely onmany of the traditional goals and philosophies that Sam’s legacy left behind, while simultaneously keeping one step ahead of theever-changing technology and methods of today’s fast-paced business environment. The organization has faced, and is stillfacing, a significant amount of controversy over several different issues; however, none of these have done much more thanscrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike acomfortable balance between increasing its profits and recognizing its social and ethical responsibilities. Why is Wal-Mart so Successful? Is it Good Strategy or Good Strategy Implementation? — In 1962, when Sam Waltonopened the first Wal-Mart store in Rogers, Arkansas, no one could have ever predicted the enormous success this small-townmerchant would have. Sam Walton’s talent for discount retailing not only made Wal-Mart the world’s largest retailer, but alsothe world’s number one retailer in sales. Indeed, Wal-Mart was named “Retailer of the Decade” by Discount Store News in1989, and on several occasions has been included in Fortune’s list of the “10 most admired corporations.” Even with Walton’sdeath (after a two-year battle with bone cancer) in 1992, Wal-Mart’s sales continue to grow significantly.The Wal-MartPhilosophy-Wal-Mart is successful not only because it makes sound strategic management decisions, but also for itsinnovative implementation of those strategic decisions. Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees(or “associates” as he referred to them), and the community. In order to maintain its market position in the discount retailbusiness, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simpletastes and took a keen interest in people. He believed in three guiding principles: 1. Customer value and service; 2.Partnership with its associates; 3. Community involvement (The Story of Wal-Mart, 1995). The Customer-The word “always” can be seen in virtually all of Wal-Mart’s literature. One of Walton’s deepest beliefs wasthat the customer is always right, and his stores are still driven by this philosophy. When questioned about Wal-Mart’s secretsof success, Walton has been quoted as saying, “It has to do with our desire to exceed our customers’ expectations every hourof every day” (Wal-Mart Annual Report, 1994, p. 5). The Associates-Walton’s greatest accomplishment was his ability to empower, enrich, and train his employees (Longo,1994). He believed in listening to employees and challenging them to come up with ideas and suggestions to make thecompany better. At each of the Wal-Mart stores, signs are displayed which read, “Our People Make the Difference.” Associates regularly make suggestions for cutting costs through their “Yes We Can Sam” program. The sum of the savingsgenerated by the associates actually paid for the construction of a new store in Texas (The story of Wal-Mart, 1995). One ofWal-Mart’s goals was to provide its employees with the appropriate tools to do their jobs efficiently. The technology was notused as a means of replacing existing employees, but to provide them with a means to succeed in the retail market (Thompson& Strickland, 1995). The Community-Wal-Mart’s popularity can be linked to its hometown identity. Walton believed that every customer shouldbe greeted upon entering a store, and that each store should be a reflection of the values of its customers and its community. Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrialdevelopment grants. What are the Key Features of Wal-Mart’s Approach to Implementing the Strategy Put Together by Sam Walton-The keyfeatures of Wal-Mart’s approach to implementing the strategy put together by Sam Walton emphasizes building solid workingrelationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts andmerchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategicformula is used to provide customers access to quality goods, to make these goods available when and where customers wantthem, to develop a cost structure that enables competitive pricing, and to build and maintain a reputation for absolutetrustworthiness (Stalk, Evan, & Shulman, 1992). Wal-Mart stores operate according to their “Everyday Low Price” philosophy. Wal-Mart has emerged as the industry leader

because it has been better at containing its costs which has allowed it to pass on the savings to its customers. Wal-Mart hasbecome a capabilities competitor. It continues to improve upon its key business processes, managing them centrally andinvesting in them heavily for the long term payback. Wal-Mart has been regarded as an industry leader in “testing, adapting, and applying a wide range of cutting-edgemerchandising approaches” (Thompson & Strickland, 1995, p. 860). Walton proved to be a visionary leader and was knownfor his ability to quickly learn from his competitors’ successes and failures. In fact, the founder of Kmart once claimed thatWalton “not only copied our concepts, he strengthened them. Sam just took the ball and ran with it” (Thompson & Strickland,1995, p. 859). Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieveeconomies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions andsales are more predictable. Cross docking gives the individual managers more control at the store level. A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart owns the largest and mostsophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to trackstock and movement which keeps it abreast of fast changes in the market (Daugherty, 1993). Information related to sales andinventory is disseminated via its advanced satellite communications system. Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expectscommitments of quality merchandise (Thompson & Strickland, 1995). The purchasing agents of Wal-Mart are very focusedpeople. “Their highest priority is making sure everybody at all times in all cases knows who’s in charge, and it’s Wal-Mart”(Vance & Scott, 1995, p. 32). “Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, thecompany worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited bothparties” (Thompson & Strickland, 1995, p. 866). Wal-Mart built an automated reordering system linking computers betweenProcter & Gamble (”P&G”) and its stores and distribution centers. The computer system sends a signal from a store to P&Gidentifying an item low in stock. It then sends a resupply order, via satellite, to the nearest P&G factory, which then ships theitem to a Wal-Mart distribution center or directly to the store. This interaction between Wal-Mart and P&G is a win-winproposition because with better coordination, P&G can lower its costs and pass some of the savings on to Wal-Mart. Sam Walton received national attention through his “Buy America” policy. Through this plan, Wal-Mart encourages its buyersand merchandise managers to stock stores with American-made products. In a 1993 annual report management stated the”program demonstrates a long-standing Wal-Mart commitment to our customers that we will buy American-made productswhenever we can if those products deliver the same quality and affordability as their foreign-made counterparts” (Thompson &Strickland, 1995, p. 868). Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designedto be environmentally friendly. The store contains environmental education and recycling centers (Slezak, 1993). Wal-Marthas also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economicallyand furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through theseprograms, Wal-Mart shows its concern for the community. Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a smallgroup of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more managementlayers, senior executives strive to maintain its unique culture. This culture, described as “one part Southern Baptist evangelism,one part University of Arkansas Razorback teamwork, and one part IBM hardware” has worked to Wal-Mart’s advantage(Saporito, 1994, p. 62). Just how Successful is Wal-Mart? — A forecast (see Appendix A) of Wal-Mart’s income for the period 1995-2000,considering increases of 30.6% in Net Sales, 27.7% in Operating Expenses, and 52.3% in Interest Debt (a level which isbelow Wal-Mart’s historically compounded growth rate of 55.6%) indicates that the company should continue to report gainseach year until 2000. Growth on Sales-According to most analysts and company projections, sales should approximate $115 billion by 1996,representing an increase of 30.6% as compared to 1995. If the company continues at this pace, sales should reach $334billion by the year 2000. The growth on sales that Wal-Mart reported during the 1980s and the beginning of the 1990s will bedifficult to repeat, especially considering the ever-changing marketplace in which it competes. In an interview, Bill Fields,President of the Stores Division, said “Wal-Mart is now seeing price pressure from companies that once assiduously avoidedtaking it on. These include specialty retailers such as Limited, category killers like Home Depot and Circuit City, and catalogcompanies like Spiegel. I think everybody prices off of Wal-Mart. You’ve got Limited reaching levels we’d thought they’dnever get to. The result is that everyday low prices are getting lower” (Saporito, 1994, p. 66). In addition, the baby-boomers are reaching their peak earnings years, when financial and personal priorities change. Thus,savings, not spending, will likely take precedence because most baby-boomers are approaching retirement. Debt Position-Based on Wal-Mart’s position in 1994, which was considered a year of expansion for the company,(Wal-Mart added 103 new discount stores, 38 “Supercenters”, 163 warehouse clubs, and 94,000 new associates) interestdebt increased 52.3%. The cost paid by Wal-Mart to finance property plants and equipment forced the company to increaselong term debt by 4.6 times during the period 1991-1995. Long term debt for 1995 is $7.9 billion. If Wal-Mart continues itsexpansion plans based on more debt acquisition at 1994 levels, the company may not attain forecasted gains by as early as1998. Operating Expenses-Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in themarket. The challenge is how to run more stores with less operating expenses. According to Bill Fields, “. . . the goal is toincrease sales per square foot and drive operating costs down yet another notch” (Saporito, 1994, p. 66). Trends indicate thatoperating expenses have been growing at a rate of 27.7% in recent years. However, Wal-Mart should reap the benefits of itsinvestments in high technology, and be able to operate more stores without increasing its expenses. Cost of Sales-Cost of sales historically has been equal to the level of sales. If the company continues to take advantage of itsbuying power, Wal-Mart can expect to lower its cost of sales. Wal-Mart’s future will depend on how well the company manages its expansion plans. For the coming years, the company willneed to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operatingexpenses. What Problems are Ahead for Wal-Mart? What Risks? — Throughout the 1980s, Wal-Mart’s strategic intent was to unseatindustry leaders Sears and Kmart, and become the largest retailer in the U.S. Wal-Mart accomplished this goal in 1991. ButWal-Mart’s current strong competitive position and its past rapid growth performance can’t guarantee that the company willremain as the industry leader or maintain its strong business position in the future. Carol Farmer, a retail consultant, told theWall Street Journal that, “One little bad thing can wipe out lots of good things” (Trimble, 1990, p. 267). Every move in itsbusiness operation ought to be well thought-out and executed. Wal-Mart needs to address two major areas in order to maintain or to capture an even stronger long term business position: 1)Single-business strategy-Wal-Mart’s success is mainly based on its concentration of a single-business strategy. This strategyhas achieved enviable success over the last three decades without relying upon diversification to sustain its growth andcompetitive advantages. Given its current position in the industry, Wal-Mart may want to continue its single-business strategyand to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on asingle-business strategy is similar to “putting all of a firm’s eggs in one industry basket” (Thompson & Strickland, 1995, p.187). In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achievingpast profit performance. Also, if Wal-Mart continues to follow Sam Walton’s vision of expansion, Wal-Mart will reach its peak in the very near future. When it does, its growth will start to slow down and the company will need to turn its strategic attention to diversification forfuture growth. 2) Social responsibility-Retail stores can compete on several bases: service, price, exclusivity, quality, and fashion. Wal-Mart has been extremely successful in competing in the retail industry by combining service, price, and quality. However,other merchants may object to Wal-Mart’s entry into their community. Because of its ability to out-price smaller competitors,Wal-Mart’s stores threaten smaller neighborhood stores which can only survive if they offer merchandise or servicesunavailable anywhere else. This makes it very hard for small businesses, such as “mom-and-pop” enterprises, to survive. They,therefore, fight to keep Wal-Mart from entering their locales. Numerous studies conducted in different states both support andcriticize Wal-Mart (Verdisco, 1994). Nevertheless, Wal-Mart did drive local merchants out of business when it opened upstores in the same neighborhood. As a result, more and more rural communities are waging war against Wal-Mart’s entranceinto their market. Besides protesting and signing petitions to attempt to stop Wal-Mart’s entry into their community, theopposition’s efforts can even be found on The Internet. Gig Harbor, a small town in Washington, recently started a WorldWide Web page entitled “Us Against the Wal.” The town’s neighborhood association promised that they “will fight them[Wal-Mart] tooth and nail” (PNA/Island Aerie Internet Productions, 1995/1996). The increasing opposition indicates that the road ahead for Wal-Mart may not be as smooth as Wal-Mart’s annual reportwould entail. This requires Wal-Mart to rethink its expansion strategy since it would not be profitable to operate in anunfriendly community. How Big Will Wal-Mart be in Five Years if all Continues to go Well? — Before he died, Sam Walton expressed his belief thatby the year 2000 Wal-Mart should be able to double the number of stores to about 3,000 and to reach sales of $125 billionannually. Walton predicted that the four biggest sources of growth potential would be the following: 1. expanding into stateswhere it had no stores; 2. continuing to saturate its current markets with new stores; 3. perfecting the Supercenter format toexpand Wal-Mart’s retailing reach into the grocery and supermarket arena-a market with annual sales of about $375 billion;4. moving into international markets (Thompson & Strickland, 1995). Wal-Mart Supercenters represent leveraging on customer loyalty and procurement muscle in order to create a new domesticgrowth vehicle for the company. With few locations left in the U.S. to put a new Sam’s Club or traditional Wal-Mart, theSupercenter division has emerged as the domestic vehicle for taking Wal-Mart to $100 billion in sales. Before the Supercenter,Walton experimented with a massive “Hypermart”, encompassing more than 230,000 square feet in size. The idea failed. Customers complained that the produce was not fresh or well-presented and that it was difficult to find things in a store so bigthat inventory clerks had to wear roller skates. One of Walton’s philosophies was that traveling on the road to successrequired failing at times. As a result of the unsuccessful experiment, Walton launched a revised concept: the Supercenter, a combination discount andgrocery store that was smaller than the Hypermart. The Supercenter was intended to give Wal-Mart improved drawing powerin its existing markets by providing a one-stop shopping destination. Supercenters would have the full array of generalmerchandise found in traditional Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and otherspecialty shops like hair salons, portrait studios, dry cleaners, and optical wear departments. Supercenters would measure125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible. Walton’s prediction was right on target. The Supercenter division more than doubled in size during 1993, then doubled again in1994. Supercenters, once thought of as risky because of slim profit margins on the food side, will most likely make Wal-Martthe nation’s largest grocery retailer within the next five to seven years (Longo, 1994). Expanding overseas, Wal-Mart moved into the international market in 1991 through a joint-venture partnership with CIFRAS.A. de C.V., Mexico’s leading retailer. Since then the company has entered Canada, Hong Kong, mainland China, PuertoRico, Argentina, and Brazil. The Wal-Mart International Division was officially formed in 1994 to manage the company’sinternational growth. By the year 2000, analysts expect Wal-Mart to be a huge international retailer, with numerous locations inSouth America, Europe, and Asia. Conclusion-The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognizethe strong implications of a “buyers’ market” (Lewison, 1994). Customers are being offered a wide choice of shoppingexperiences, but no one operation can capture them all. Therefore, it is incumbent upon management to define their targetmarket and direct their energies toward solving that specific market’s problems. Technology, demographics, consumerattitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade willdepend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. IfWal-Mart continues its customer-driven culture, it should remain