Question: In the summer of 2009 Walmart the world s largest retailer
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 manufac- turers 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 dis- closed 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 power base(s) appear to be in play in this situation? What do you think Walmart is trying to accomplish here by exercising its great power in the marketing channel?
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