How Wal-Mart’s struggles in China are a sign of their inevitable demise

By Andrew Barkman, David Barreca and Andrew Deluce

Wal-Mart, the world’s largest company by many measures, could be considered an easy and obvious target of criticism and scrutiny. Many believe the value-driven discounter to be an unstoppable force, a reasonable assessment of a business with annual revenues that rival many developed nations’ GDPs.

But with such a great scale comes the difficulty in adapting to new forces and new markets.

As their physical presence in the American marketplace approaches saturation, Wal-Mart has looked abroad to continue to grow their operations. However, their clumsy entry and prolonged expansion in the Chinese market have underlined fundamental flaws in this international expansion strategy.

These flaws not only question the continued viability of international expansion for the 52-year old behemoth from Bentonville, but these difficulties are ones that could easily become apparent in the American market in the near future.

Developing economies are adapting to 21^st century retail markets much faster than developed economies

The rapid proliferation and adoption of online retailing in China is transforming the traditional consumer’s shopping behaviour. A historical underdevelopment of the Chinese retail sector[i] has created a void that is being aggressively filled by merchants bypassing brick and mortar stores and developing natively as e-commerce retailers, such as Alibaba. This act of leapfrogging is analogous to the construction of mobile communication networks in many developing nations without first building landline infrastructure. As a result, perhaps, it is predicted that China will surpass the United States in online purchases as percentages of overall sales in the next year (Figure 1).

Mature corporations, such as Wal-Mart, view these emerging channels as complimentary to existing products, as part of a larger omni-channel system. Part of this view stems from existing consumers being conditioned to in-store experiences, but part is also influenced by a resistance to change from lifelong merchandisers either unfamiliar with online ecosystem, unimpressed with current offerings or unenthused by innovations that would disrupt their world. New merchants in China, free from internal pressures to maintain any existing physical channels and other 20^th century merchandising mentalities, see these systems differently, most likely as substitutes that are both less costly than traditional channels and that best cater to regional consumer preferences (Figure 2).

Not only do these changes point towards a fall in demand for physical stores themselves, but they will apply significant pressure to Wal-Mart’s already slim margins.

The primary offerings in the e-commerce world fall under the category of durable goods, such as clothing, toys, and electronics. This is precisely the same category of goods that Wal-Mart hopes consumers will buy at some point during visits to their stores.

Wal-Mart’s intense success surrounding grocery sales in the United States and abroad was centered on the possibility of cross-selling durable goods to consumers who flocked to Wal-Mart grocery sections to purchase foodstuffs at low cost, which at times meant a loss to Wal-Mart. The low-margin or loss on groceries would then be made up for by purchases made in other departments. With rising consumer interest in making those purchases online, the dropping cross-selling benefits will force Wal-Mart to re-evaluate this strategy.

With online availability of these durable goods and consumer preferences favouring online channels, it’s clear that Wal-Mart has to change its Chinese operations to adapt to this strong threat. However, with an underdeveloped online channel that only sells a small selection of the 140,000 SKUs offered in-store, it’s not clear that the discount giant has taken this threat seriously. Considering the competition, Alibaba’s various channels measure their product offerings in the tens or hundreds of millions[ii], orders of magnitude greater.

Wal-Mart is likely already feeling some pressure from better positioned retailers in China. Recently, there have been several changes in Wal-Mart China’s upper-level management following allegations of fraudulent accounting and nefarious business practices[iii]. These practices were made to make operations look better than reality in order to align with corporately-mandated goals. When goals are so unreasonably high that employees are willing to break laws to meet them, it seems prudent that Wal-Mart should change either the goals, how they are measured, or how they are rewarded. There is no sign that there have been any fundamental changes to Wal-Mart’s systems since the rise of these allegations.

Wal-Mart truly excelled when it first became a one-stop shop for shoppers, utterly changing the face of retail shopping. However, the marketplace is shifting, and doing so in China at a rapidly increasing rate. It took 150 years for the United States to move from an offline retail format to e-commerce. China took 20 years.

With that incredible rate of growth, savvy players in the Chinese marketplace were able to build their businesses around a dynamic, modern market place and have been beating the world champion at their own game. Eventually other markets will make the leap and judging from the lack of a truly innovative response from Wal-Mart to date, it’s not inconceivable that further missteps could cause this giant to fall.

[i] China has 0.6 m² of retail space per capita versus 2.6 m² in USA and 1.3 m² in Europe (Source: Euromonitor)

[ii] Taobao, Alibaba’s consumer to consumer marketplace, has over 1 billion products and services listed (Source: HSBC Global Research, Chi Tsang)

[iii] How Wal-Mart made its crumbling China business look so good for so long, Renee Dudley & Liza Lin, Bloomberg, 2014

Walmart – An Easy Target?

By Savita Gill, Michelle Leung, and Annie Xu

In January 2012, 150 workers at Foxconn threatened mass suicide in protest of their poor working conditions (Moore, 2012). In November 2012, over 112 workers died in fire at a factory operated by Tazreen Fashions Ltd. In Dhaka, Bangladesh (The Associated Press, 2012). What did these two incidents have in common? The companies involved were both suppliers to large and powerful American companies. Foxconn was a supplier to Apple, whereas Tazreen was a garment supplier to Walmart. Both Apple and Walmart were and continue to be heavily criticized for not taking a larger and more active role in ensuring the quality and safety of the working conditions at their suppliers, but is it really their responsibility? As the largest company by revenue in the world, Walmart is an easy target. In this blog post, we shall argue that Walmart should not be held responsible or accountable for what happens at its tens of thousands of suppliers.

The local government shall be held fully responsible for the working conditions and safety of its people and factories. The Rana Plaza tragedy in Bangladesh is one example where the government should have enforced its laws and regulations to protect its factory workers. The collapse of the building that took over 1100 lives was due to the extra two floors that were illegally added to the building. If government regulation and inspection were tightly in place, the tragedy would not have happened. Some argue that corporations such as Loblaws, Wal-Mart and JC Penny should be held accountable for the conditions and safety of the factories such as the Rana Plaza; but the truth is that this would never be possible as multiple layers of contractors are in place disconnecting the North American corporations from its source of goods. In addition, corporations cannot uphold their own laws and regulations in another country. Wal-Mart’s clothing line supplier contracts the production of the garment to a clothing company where it then contracts to a Bangladeshi manufacturer who then contracts to a local shop that makes clothes for multiple North American corporations. With so many levels of sub-contracting and the factories being half way around the world, Wal-Mart does not have the ability to have a say on how its clothing are made, nor could Wal-Mart walk into Bangladesh and start giving orders on how things should be done even if Wal-Mart wanted to. To make the change of safe working conditions to happen, it takes the local government, business alliances and pressure from the media. In 2002, China passed the bill on Child labour law after much criticism from the West and threads to move factories elsewhere. Now with local government enforcement, the condition has improved, children’s rights are being protected and maltreatment of children is prohibited. In 2001, US government and Cambodia government came into agreement that US would open more opportunities to Cambodia if the Cambodian factory working condition improves. It’s been 14 years since the founding of “Better Factories Cambodia”, both the government and the foundation are still working hard to ensure the factories comply with the rules and regulations of international labour standards. Local government intervention is absolutely necessary for the working conditions and safety to improve.

Secondly, international coherence on core labor standards is an issue much beyond the realm of Wal-Mart. Placing a developing country under the same lens as an economically developed country can be seen as a protectionist measure. It will impact country’s competitive advantage and hence net export and hence economic development. In addition, every Fortune 500 Company is leveraging low-cost manufacturing to improve bottom line. Wal-Mart is just one player in this ecosystem. So, nations and business communities across the world need to address these hard questions and balance diverse interests. WTO (World Trade Organization) has deferred negotiation of work standards to the International Labour Organization (ILO). WTO points that “it is not easy for member governments to agree on these issues and the question of international enforcement is a minefield” (WTO, 2015). If governments themselves are reluctant to protect their citizens then Wal-Mart faces an uphill task. As a publically listed company with multiple stakeholders, Wal-Mart has taken steps in the right direction with an alliance for Bangladesh and “Responsible Sourcing program”. Wal-Mart should continue to have dialogues around sustainability and better working conditions but cannot be hold accountable if something slips out.

There is no dispute that Walmart has the power to coerce their suppliers to comply with whatever conditions they demand, however, it should not be Walmart’s responsibility to govern the operations and policies of its suppliers. In the end, it is simply a basic business transaction. If Walmart becomes aware of illegal practices and unsafe conditions at its suppliers, they should terminate the relationship if the supplier is not willing to comply with the local laws and regulations. They should not be interfering with how another business operates. Walmart has taken steps to be socially responsible through various initiatives such as participation in the Alliance for Bangladesh Worker Safety. It is now up to local governments and pressure from the world stage to ensure the necessary laws and regulations are in place to guarantee the safety and well being of workers around the world.

References
Moore, M. (2012, January 11). ‘Mass suicide’ protest at Apple manufacturer Foxconn factory. Retrieved January 25, 2015, from The Telegraph: http://www.telegraph.co.uk/news/worldnews/asia/china/9006988/Mass-suicide-protest-at-Apple-manufacturer-Foxconn-factory.html

The Associated Press. (2012, November 25). Bangladesh fire kills 112 at Wal-Mart supplier. Retrieved January 25, 2015, from CBC News: http://www.cbc.ca/news/world/bangladesh-fire-kills-112-at-wal-mart-supplier-1.1179644

WTO. (2015). http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm. Retrieved from http://www.wto.org/: http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm

BFC. (2015). http://betterfactories.org/?page_id=25. Retrieved January 25, 2015, from http://betterfactories.org/: http://betterfactories.org/?page_id=25

Bangladesh Worker Safety Org. (2015) http://www.bangladeshworkersafety.org/. Retrieved January 25, 2015, from: http://www.bangladeshworkersafety.org/

ILO. (2015). http://www.ilo.org/dyn/natlex/docs/WEBTEXT/63806/65269/E02CHN01.htm. Retrieved January 25, 2015, from: http://www.ilo.org/dyn/natlex/docs/WEBTEXT/63806/65269/E02CHN01.htm

Library of Congress. (2015). http://www.loc.gov/law/help/child-rights/china.php. Retrieved January 25, 2015, from: http://www.loc.gov/law/help/child-rights/china.php

Tyson, L. (2014, February 7). The Chalenges ofRunning Responsible Supply Chain. Retrieved January 25, 2015, from Econmix: http://economix.blogs.nytimes.com/2014/02/07/the-challenges-of-running-responsible-supply-chains/?_r=0

Cutting Head Office Jobs Is Right and Wal-Mart Should Do More

By Zhengyu (James) Fang and Peter Li

In January 2015, Wal-Mart announced that by the end the month it would open another 11 supercenters in Canada, realizing its expansion plan north of the boarder. In contrast with its ambitious footprints in Canada, the company cut 210 jobs last November, most of which was among head office headcounts in Mississauga Ontario, to “create a more efficient organizational structure as the company positions itself competitively for the future”, according to Andrew Pelletier, the company’s vice-president of corporate affairs and sustainability. The same thing is happening in both its home and international battlefields – the company shrank its regional office in China [1], and allegedly cut 700-800 jobs at Arkansas headquarters last year [2]. Facing stagnant growth in recent years and intense competition, Wal-Mart has spared little effort in decreasing operational expense to satisfy the shareholders. The retail giant’s high turnover rate of employees has been a sore point of criticism. This time, however, the company is doing the right thing to both cut operational costs and to solve its current public disputes on labor costs and employee welfare.

It is no secret that store managers of Wal-Mart are paid better than most of its competitors. According to National Bureau of Economic Research, average annual salary of a Wal-Mart store manager is about $92.5K, which is among the “highest paid in the nation”[3]. Same-level manager at Whole Foods and Starbucks are paid on average $76K and $45K. Although Costco store manager is paid about 15% more than Wal-Mart, it is noticeable that cashiers at Costco are making more than 40%, and Whole Foods more than 20% than those in Wal-Mart. On the other hand, senior executives of Wal-Mart are paying way higher than those of its major competitors, as illustrated below [4]. An average senior executive took home $12.6 million compensation, which almost doubled runner up Target. For each hour, a Wal-Mart senior executive earns over $6,000 dollars, comparing with less than $10 dollars of an associate. Middle management is also arguably enjoying a higher than average compensation package. District managers could earn more than $240K, and regional vice presidents could reach over $420K [5].

Cutting cost at manager and above levels, we believe, is both necessary and imperative through either cutting the headcounts in head offices around the world, or slashing the staggering high paychecks of senior management, or even both. Costs saved by such initiatives could be used to subsidize front-line associates to their pay increase and life-saving social welfare. By doing so, the company could also show the public its efforts to solve its notorious labor issues, saving millions of tax payers’ dollars. Wal-Mart is on the right track of slashing jobs in head office, but it needs to do more.

It is worth comparing Wal-Mart with its biggest competitor Costco here. As illustrated above and based on data compiled by Morningstar, Costco’s executive compensation totaled $21 million for 2013, actually a 6.68% decline from the previous year, while Wal-Mart’s executive compensation totaled $77 million in 2014, showing a 9.04% increase from 2013 [6]. In contrast, Wal-Mart pays $8.53 on average to its cashiers, but Costco pays $15.6. While Wal-Mart announces that “more than half” of its employees had health insurance coverage, Costco has 88% for the same statistics [7]. In terms of revenue growth, Costco had a soaring total 51.54% from 2010, while Wal-Mart only had 17.73%. When Costco announced a remarkable 10% growth in sales in August 2014, Wal-Mart struggled with a 2.8% increase for the same period [8]. One should be very curious about why Wal-Mart struggling in cutting every penny from store-level associates generously increased the compensation for their executives while Costco enjoyed vivid growth but shared more of their gains with their own employees.

Figures are more telling when we go beyond financials. Wal-Mart’s current low labor cost strategy is actually hurting its bottom line rather than helping it. If we consider “all-in costs” of such a strategy, it is actually paying its employers more in order to improve in-store performance, retain reputation, and reduce the cost from potential law suits, all of which are not reflected on its financial statements but could have been saved otherwise. Statistics shows that Wal-Mart’s overall employee turnover rate is about 44% in 2013 [9]; it could be as high as 70% at some stores. High turnover rates will not only hurt an organization’s productivity, but also damage the overall image of the employer. Costs associated with high turnover rate could include wasted employee training costs, additional time in recruiting, problematic team dynamics as well as low morale and productivity. Even though Wal-Mart tries to justify its human resource policy by stating that training and replacement costs are low for the work force at their stores, they could be completely wrong about it when they ignore the fact that the low wage has led to deteriorated service quality and employee satisfaction [10]. In 2013, Wal-Mart was ranked No.1 in the “10 worst retailers that have the lowest customer satisfaction” list [11]. From the news and media, things haven’t been improved much, if not becoming worse, in 2014. It is not surprising that the growth for Wal-Mart was only 1.5% in 2013-14 then. When Wal-Mart is suffering from low quality and drives away its customers, other retail stores are more than happy to welcome the outraged, anti-Wal-Mart force to join their customer base.

In conclusion, Wal-Mart is on the right track of redesigning its management structure in the head office, but that’s obviously not enough to fuel its long-term growth. It should revisit overall compensation scheme and must be well positioned to justify its staggering paychecks to those executives and senior management under stagnant period of business growth. Saved costs from these initiatives should be used to subsidize front-line associates, regardless of impending regulatory changes or not, so as to save its reputation, cut litigation costs and bring lost customers back to it.

References:

[1]. http://usa.chinadaily.com.cn/business/2014-12/03/content_19014719.htm
[2]. http://abcnews.go.com/Business/story?id=6850964
[3]. http://time.com/3026504/wal-mart-managers-average-salary-higher-than-starbucks/
[4]. Compiled by http://www1.salary.com from companies SEC filings
[5]. Always Low Wages, Lisa Featherstone, 2014
[6] http://blogs.wsj.com/corporate-intelligence/2014/07/23/pay-at-wal-mart-low-at-the-checkout-but-high-in-the-managers-office/
[7]. http://insiders.morningstar.com/trading/executive-compensation.action?t=COST
[8]. http://www.fool.com/investing/general/2014/09/05/why-costco-is-crushing-wal-mart.aspx
[9]. http://aattp.org/raising-employee-wages-could-actually-raise-walmarts-profit-margin/
[10]. http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/
[11]. http://www.washingtonpost.com/business/economy/these-10-retailers-had-the-worst-customer-satisfaction-ratings-for-2013/2014/02/27/a0860cb4-9f25-11e3-a050-dc3322a94fa7_story.html

Charlie visits Wal-Mart in the year 2020

By Peng Li, Alexander Melamed and Ali Yousaf

As Charlie Fisher walks into Walmart, he glares around what is a revolutionized shopping world. People no longer buy items such as lawnmowers, snow blowers, and microwaves at Walmart, they rent them. Everyone has the opportunity to have a life of better standard than they did in 2015 and everyone carries possessions of high quality and more sustainable than in the past. Charlie himself has come to rent products that he could only have dreamed to possess in the past. The market value of his new lawnmower, for instance is 3 times the lawnmower than he owned in the past, but thanks to Walmart’s “Easy to Rent” program, he is able to afford a premium lawnmower without paying too much extra in the long run (The table below shows what Charlie’s payments would look like)

Walmart has enticed its customers with the option of making smaller payments over longer periods of time and it is a strategy that has worked wonders for the company, allowing it to retain its spot as the top retailer on the planet.

Does this fictitious futuristic story sound completely absurd? Consider for a few moments, what will the future of retail need to look like in order to endure in the era of mobile internet, e-retail, global warming and the ever changing preferences of consumers ? What creative destructions do giants like Wal-Mart face today and how drastically do they need to adapt in order to stay in the game?

Wal-Mart made an astounding revenue of 483.79B billion in 2014. Consider the magnitude of this number. If Wal-Mart was a country it would be the 25^th largest country by GDP surpassing 157 other countries including Norway and many other advanced nations. They have grown to this size by leveraging a carefully crafted activity system of inter-operating capabilities that mutually reinforce one another to source, transport and sell more efficiently than any other retailer in history. The 4 pillars of this strategy are: (1) Wal-Mart’s iconic Every Day Low Prices Strategy which helps them win over the competition, motivate their employees, and keep their logistics smooth and efficient; ( 2) Their supply chain is highly optimized to reduce inventory and transportation costs. (3) Their IT system optimizes their supply chain, store operations and helps control their suppliers. (4) They can successfully leverage their size and economies of scope to negotiate favorable deals with suppliers and their host communities for prime real estate.

However, as powerful as they may seem today, the world is changing and they face changing consumer preferences, increasing pressures to reduce environmental impact and competition from even leaner discount retailers that dominate the online retail space such as Amazon and Alibaba.

In order to stay competitive Wal-Mart must offer value beyond low prices, because e-retail will continue to undercut their prices. At the same time Wal-Mart will need to improve their environmental impact and find ways to offer products that meet consumer demands.

Let’s revisit the idea of Wal-Mart as a rental service. In this new model, Wal-Mart’s current operation will support product rental on select products.

First lets consider the key stakeholders. For consumers this will mean that they can pay even less for the products they desire, access to higher quality products, and only pay per use. For Suppliers this would mean that they can optimize their products for durability, they will require less raw materials and they will need to develop the capability to refurbish their products before putting them back in circulation. The net effect will be a net value creation for communities by increasing utilization of products and reducing landfills.

Next let’s consider why Wal-Mart is the most likely to succeed in this strategy.

Wal-Mart is the expert in supply chain logistics. They can transform their existing system to supports more two ways transfers of goods between suppliers and stores and vice versa for returns. Products can be directed via Wal-Mart’s hub and spoke system to locations where they will be in demand. Higher inventory costs would be prohibitive for most competitors, but Wal-Mart can leverage their transportation network and IT system to forecasting and optimizing the supply and demand of rentable goods and minimize these costs. Wal-Mart can leverage their size to increase demand for higher quality goods at affordable prices. Demand for higher quality will also motivate Suppliers to produce more durable products that can be serviced and reused instead of recycled.

Finally, this strategy will give Wal-Mart several key differentiations that will be difficult for competitors to match. Wal-Mart can offer unmatched variety of high quality products for rent or to buy. For suppliers, Wal-Mart can differentiate by providing loans against the goods circulating in the rental pool and they can count on receiving a predictable revenue stream from the operations of the rental platform. Once a product has reached useful rental life, they can be sold at a discount.

Creative destruction is the process through which new companies emerge and overtake large incumbents that are too slow or blind to the changing environment. Wal-Mart is facing fierce competition from online retail, they are struggling to stay relevant in the face of changing consumer preferences and they find themselves in the mids of environmental controversies as the world’s most influential companies. In order to stay competitive Wal-Mart must offer value beyond low prices, they must do so responsibly and they must leverage their existing strengths. There are many ways that they might choose to reinvent their strategy. The future of the company rests on the decisions of management over the next several years.

Buying vs Renting

The table below shows what a world of renting products from Walmart may look like for Charlie and how it compares against the traditional buying world of today. In essence, by spending slightly more money over a 3 year period, Charlie is able to purchase products of much higher quality and ones that are more sustainable in the long run. A rental program also ties Charlie’s loyalty to Walmart, leading to more repeat business.

After a decade of trying – it still sucks to be a women at Walmart

By Shelly Rampersad and Rachel Steger

Gender discrimination scandals have plagued Walmart in the media for a number of years. In 2011, 1.5 million female employees attempted to launch a class action lawsuit against Walmart (Goudreau, 2011). Since then, another 2000 women in 48 states have initiated legal proceedings against Walmart for pay and promotion discrimination (Alice Hines, 2012). In her book Selling Women Short, Liza Featherstone (2005) highlights that on average, female hourly workers earn 30% less than their male counterparts.

Despite the negative press surrounding Walmart’s treatment of women, the organization has made significant strides when it comes to the number of female directors on their board. With 25% females on their board of 16 seats, Walmart effortlessly beats the 2013 national average in of 16% in United States (McKinsey & Company, 2013).

The Forum of Executive Women reports that 25% is the tipping point when women begin to make meaningful impact on governance (Goudreau, 2012) suggesting that Pamela Craig, Aida Alvarez, Linda Wolf and Marissa Mayer have the ability to make gender equality a priority for Walmart. If this is the case: Why aren’t the advances Walmart has made in the boardroom reflected in significant improvement throughout the rest of the organization?

[Figure 1: Walmart’s Female Directors. Top Left Counterclockwise: Craig, Alvarez, Wolf, Mayer (Source: Walmart.com)]

The answer is one that Walmart has heard time and time again: as the largest company in the world, affecting change takes much more than it does for others. For Walmart, change must be brought about with a multi-dimensional approach. To truly change the organization, Walmart needs to (1) bridge the gap between management and front-line staff, (2) avoid mini-me succession planning and (3) ensure the right opportunities are in place for women to travel through the pipeline.

The great divide

Given the media buzz around gender diversity at Walmart, the issue has a focus for Walmart in recent years. The 2013 Walmart Global Responsibility report shows some of Walmart’s successes in this area: female Senior Vice-Presidents have increased from 12% in 2003 to 33% in 2013. This promotional area is highly influenced by the executive team which may help explain the increase. Alternatively, at the store-level we see only 29% of promoted store managers being women, a relatively low number given that women make up 57% of the employee pool. Store manager and in-store promotions are less influenced by the executive team and are dictated by middle managers. This illustrates a poignant divide between the executive management and front-line managers that are responsible for executing these initiatives. The communications and values being heralded at the management level isn’t present at the front-line.

The Walton ‘mini-me’ syndrome

Every Walmart CEO since and including Sam Walton has been a male born and raised in Arkansas or surrounding states (Figure 1) with similar backgrounds and leadership styles. Having like-minded leadership over the years has perpetuated the Walmart ideology, which in turn, has reinforced the activity system that has made Walmart so successful. However, it also means that fresh and diverse perspectives have not been brought into the organization through the CEO. In fact, Walmart’s extreme similarities in CEOs highlights the mini-me syndrome (if you’re thinking Austin Powers, you’re not that far off!). Often referred to in succession planning, the mini-me syndrome states that executives may subconsciously choose successors with characteristics (including gender) similar to themselves (PwC, 2008). This puts females at a severe disadvantage in organizations where leadership positions are m ale dominant, such as Walmart. [Figure 2: Highlighted states where Walmart CEO’s were born., Figure 3: Austin Power’s Mini-Me, Source: Google Images]

In 2006, CEO Lee Scott reinvigorated the company under the premise sustainability. It only takes one CEO to do the same with gender: it would generate the excitement in the organization and influence real change. Instead, under every CEO, the mini-me syndrome and discrimination against women has persisted.

Walmart’s leaky pipeline

Women at Walmart disproportionately occupy the lowest ranked positions. They then become increasingly outnumbered at each respective upward rank – in other words, Walmart has a leaky pipeline (PwC, 2008). There simply isn’t enough emphasis put into keeping women in the ‘pipeline’. To achieve gender equality Walmart needs to address the cultural and personal barriers keeping women from advancing through the organization (PwC, 2008).

One such barrier is the mobilization of middle managers. In a recent study, 54% of men indicate that gender diversity initiatives are potentially unfair to men (McKinsey & Company, 2013). Furthermore, women are often unaware of the potential opportunities open to them because of the lack of female leaders as role models. Increasing awareness and education around these issues may fix part of the leakage in the pipeline. Particular emphasis should be placed on securing female role models and mentors within the organization that others can gain support and learn from.

Walmart isn’t that bad when it comes to gender …right?

Some may say that Walmart is already better than average on many key gender metrics. After all, 25% of the board is female, they have committed to spend $20 billion on sourcing from female-led companies and they have created the Walmart Global Women’s Economic Empowerment Initiative (Walmart, 2014). However, Walmart is not the average company, it is not facing average strategic challenges and it does not have a gender neutral customer base – so average simply isn’t good enough.

In 2015, Walmart faces unprecedented strategic challenges regarding future growth. As the U.S. market nears saturation, Walmart needs to become an agile company ready to pivot. Diverse perspectives will help facilitate this transition and having women contribute to the discussion will increase the likelihood of success. With women controlling 70% of global consumer spending decisions, the ability to leverage their insight is paramount (European Commission, 2013). Finally, Walmart’s executive team has been fighting the gender war for far too long, and it has substantially diverted managerial attention away from business issues. Seriously addressing the issue of gender equality will allow Walmart to refocus their attention on what they do best: selling products.

References:

Alice Hines. (2012, June 06). Retrieved from Huffington Post: http://www.huffingtonpost.com/2012/06/06/walmart-sex-discrimination-women-_n_1575859.html

European Commission. (2013). Women on boards – Factsheet 1. Retrieved from http://ec.europa.eu/justice/gender-equality/files/womenonboards/factsheet-general-1_en.pdf

Fairchild, C. (2015, January 16). The 23 Fortune 500 companies with all-male boards. Fortune.

Featherstone, L. (2005). Always Low Wages. In Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart (p. 129).

Goudreau, J. (2011, June 20). Wal-Mart Wins Supreme Court Ruling In Historic Sex Discrimination Suit. Forbes.

Goudreau, J. (2012). Will Google’s Marissa Mayer Help Solve Wal-Mart’s Woman Problem? Retrieved from Forbes: • http://www.forbes.com/sites/jennagoudreau/2012/04/18/google-marissa-mayer-walmart-woman-problem/

McKinsey & Company. (2013). Gender diversity in top management: Moving corporate culture, moving boundaries. Paris: McKinsey & Company.

PwC. (2008). The leaking pipeline: Where are our female leaders? Gender Advisory Council.

Walmart. (2014). 2014 Global Responsibility Report. Arkansas: Walmart.

Who benefits more from Obamacare: Wal-Mart or Employees?

By Katherine Fan, Shantanu Nigam and Sissi Yang

On October 7^th 2014, Wal-Mart announced it would discontinue health and other benefits starting 2015 for around 30,000 part-time employees who work 30 hours or less [1]. Not known as a particular employee friendly company, Wal-Mart has been criticized in the past for its low wages, gender and racial discrimination, and inadequate health insurance [2]. With the advent of the new Patient Protection and Affordable Care Act (a.k.a. Obamacare), Wal-Mart is once again at the center of public scrutiny for its latest move [3]. Wal-Mart has been a big supporter of Obamacare [4] and is being accused of taking advantage of new healthcare regulations to offload its own cost onto American taxpayers. However, looking digging further into Wal-Mart’s as well as government healthcare system in context of the Obamacare, we think that the employees, rather than Wal-Mart, would stand to gain more from this policy.

Part-time employees now qualify for financial subsidy for Medicaid healthcare insurance

Most part-time workers are forced to do so due to lack of sufficient full-time opportunities. They often work multiple part-time jobs to make sufficient living and seek every sponsorship and financial aid to help in expenses. One attraction of the employer sponsored healthcare plan for them is the tax-benefit on the premium paid towards the plan. However, most low-wage employees also qualify for the financial subsidy for government Medicaid healthcare plans at the exchange (known as Heath Insurance Marketplace) resulting in further savings. Employees weigh their healthcare options for the cheapest deal (tax benefit or financial subsidy) and make their choice. The new Affordable Care Act (Obamacare) has added a layer of complexity to it. Under the new provision, a low income individual may not qualify for subsidy if his/her employer offers health insurance at work even if the individual does not choose to buy it [5] [6]

For example, as calculated by Kaiser Family Foundation’s subsidy calculator [7], a low-wage employee at Wal-Mart with 2 kids and household earning of $22,000, which is below poverty line[8], would still not qualify for the government financial aid for private insurance at the state exchange (cheaper alternative) if he/she is offered healthcare by Wal-Mart; Even if he/she choose not to buy Wal-Mart insurance. By removing the healthcare provision for the same employee, Wal-Mart actually enables him/her for annual government financial aid of $5700.

Government offers better and more reliable Healthcare coverage than Wal-Mart

Another indirect benefit from Wal-Mart’s move, is that employees now access to better and more reliable healthcare coverage. As sited by ‘Walmart-Watch’, a Washington based non-profit organization, Wal-Mart healthcare is highly inadequate especially with the advent of Obamacare [9]. Wal-Mart’s insurance include high deductible compared to other public and private options; involve long waiting period before the worker becomes eligible for healthcare. Pre-existing conditions require further wait-period for employees to become eligible for healthcare; ambulance, and emergency services require extra charges while preventive care has prohibitively high deductible under Wal-Mart’s healthcare plan. In comparison government provided Medicaid covers ambulance service [10], preventive health service [11], include pre-existing conditions [12], and does not involve waiting period [13].

For part time employees eligible for subsidy, Wal-Mart’s healthcare plans are more expensive than comparable government plans. As sited in the Walmart Watch report, a $700 deductible healthcare plan with $4000 out-of-pocket expenses costs $700f0, something unaffordable for an employee earning $20,000. The recent hike to the premium [14] has made Wal-Mart’s healthcare plan even more undesirable. The case with part-time employees earning too high to qualify for subsidy is different as the premium for Wal-Mart Healthcare plan is relatively cheaper than unaided premium of the Medicaid [15]. However it is highly improbable for a minimum wage employee working less than 30 hours per week to not qualify for any subsidy.

Not only inadequate and expensive in case of Wal-Mart, an employer based healthcare program in general is inherently an unreliable mode of insuring oneself for the time of emergency. As Washington Post’s Paul Waldman mentions, the insurance coverage should not depend on the employer [16]. It should not be impacted with the loss or change of job/career; it should not designed based on the will of the employer such as which illnesses to cover and when to cover etc. There is no reason to outsource these choices to a middleman, the employer.

Wal-Mart saves on insurance cost. But how much?

Although Wal-Mart’s senior management has been shying away from disclosing the cost savings resulting from the change in plan [17], Bloomberg estimates Wal-Mart could save roughly $50 million in cost assuming 30,000 affected workers use lowest-cost plan [18].

Under the new plan, Wal-Mart’s lowest-cost health plan would cost an employee $21.90 per pay period [19]. Paying biweekly and covering 75% of the total premium, Wal-Mart incur an overhead of $66 per pay period per employee. Contrary to Bloomberg’s assumption that all 30000 part-time employees buy Wal-Mart health insurance, ADP Research Institute report showed that only 8% of total part-time workers (approx. 17000 of 210,000) actually bought the coverage in 2013 [20]. Hence under the conservative estimates Wal-Mart could save the annual insurance overhead of only about $29 million at current subscription rate. A meagre saving for a half trillion dollar company.

[Image Source: ADP Resource Institute; http://www.vox.com/2014/10/7/6939057/walmart-drops-insurance-good-news]

 Conclusion

Wal-Mart has openly stated its concerns about the rising healthcare costs and its recent action is no surprise. Obamacare mandates employer to provide a quality and affordable healthcare coverage to all full-time equivalent (FTE) employees. It also takes care of those left out of employer sponsored healthcare insurance. Looking at the opportunity to reduce cost, every firm including Wal-Mart, is now restructuring its workforce by cutting working hours of employees to reduce FTE workforce, as well as cutting benefits in compliance of the mandate. The change in its policies and benefit structure might save some costs for Wal-Mart, we believe it has done more good to the employees who could now avail government financial subsidy and a better more reliable healthcare program.

Reference

[1] Wal-Mart drops healthcare for some part-time employees http://www.wsj.com/articles/wal-mart-to-end-health-insurance-for-some-part-time-employees-1412694790
[2] Criticism of Wal-Mart http://en.wikipedia.org/wiki/Criticism_of_Walmart
[3] Obamacare Explained http://obamacarefacts.com/obamacare-explained/
[4] Wal-Mart supporter of Obamacare http://www.weeklystandard.com/blogs/walmart-obamacare-supporter-drops-coverage-another-30000-employees_810824.html
[5] Obamacare brings change in healthcare regulations http://www.vox.com/2014/10/7/6939057/walmart-drops-insurance-good-news
[6] Eligibility for Health Premium Subsidy http://www.zanebenefits.com/blog/bid/288577/ACA-Limits-Premium-Subsidies-For-Families-of-Covered-Employees
[7] Kaiser Family Foundation’s subsidy calculator
http://kff.org/interactive/subsidy-calculator/#state=&zip=&income-type=dollars&income=22000&employer-coverage=0&people=2&alternate-plan-family=individual&adult-count=1&adults%5B0%5D%5Bage%5D=36&adults%5B0%5D%5Btobacco%5D=0&child-count=2&child-tobacco=0
[8] Poverty Threshold http://www.irp.wisc.edu/faqs/faq1.htm#thresholds
[9] Wal-Mart Watch report – Wal-Mart healthcare is inadequate http://walmartwatch.com/wp-content/blogs.dir/2/files/pdf/medicaid_factsheet.pdf
[10] Medicaid covers ambulance service http://kff.org/medicaid/state-indicator/ambulance-services
[11] Medicaid covers preventive health service https://www.healthcare.gov/preventive-care-benefits/adults
[12] Medicaid covers include pre-existing conditions http://obamacarefacts.com/whatis-obamacare]
[13] Medicaid [http://en.wikipedia.org/wiki/Medicaid]
[14] Recent hike to Wal-Mart premium http://www.reuters.com/article/2012/11/12/walmart-healthcare-idUSL3E8MC18E20121112
[15] Wal-Mart Healthcare plan is cheaper than that under Medicaid http://www.washingtonexaminer.com/surprise-walmart-health-plan-is-cheaper-offers-more-coverage-than-obamacare/article/2541670
[16] Insurance coverage should be employer independent http://www.washingtonpost.com/blogs/plum-line/wp/2014/10/08/how-walmart-is-showing-that-obamacare-is-working/
[17] Wal-Mart will not disclose cost savings http://www.wsj.com/articles/wal-mart-to-end-health-insurance-for-some-part-time-employees-1412694790
[18] Bloomberg estimates Wal-Mart could save roughly $50 million in cost http://www.bloomberg.com/news/2014-10-07/wal-mart-will-cut-health-benefits-to-some-part-time-employees.html.
[19] Wal-Mart healthplan cost http://www.bloomberg.com/news/2014-10-08/wal-mart-health-cuts-reopen-debate-over-obamacare-costs-savings.html
[20] 8% of total part-time workers actually bought Wal-Mart coverage in 2013 – ADP Research Institute Report http://www.vox.com/2014/10/7/6939057/walmart-drops-insurance-good-news

How Could Increasing Inequality Affect Wal-Mart?

By Artem Kaikov, Lawrence Kao, and Katherine Langille

In his State of the Union address on Tuesday January 20^th, 2015, President Obama spoke at length about the middle class.[1] This doesn’t sound too out of the ordinary for an American politician. But sometime in the near future, we may look back on this and wonder who he was talking about. Inequality has been a hot topic of late, most recently following Oxfam’s Inequality Study finding that the richest 1% will control half of global wealth by 2016.[2] Rising economic inequality is becoming hard to ignore, even for a large retailer like Wal-Mart. If rising inequality changes its customer base, how might Wal-Mart respond? The Elephant In The Room Wal-Mart, a company approaching $500 billion in annual sales[3], has ridden a growing middle class in the post-WWII baby boom and the increased demand for cheap, functional household products that it created⁵. It’s no accident that Wal-Mart, Target and Kmart all launched in the same year. A similar effect is occurring in Mexico right now⁶, although increasing global economic inequality may be problematic for Wal-Mart if decreasing median real wealth and a declining middle class make shoppers more price-sensitive. Several current trends may signal the beginning of these problems:

• Stiffer competition from other discounters in the grocery sector[4]
• For a basic basket of goods, prices are actually lower at Dollar General than at Wal-Mart[5]

Given these trends, it may be hard for Walmart to continue its Every Day Low Prices (EDLP) strategy.

EDLP: A Simple But Outdated Strategy?

Wal-Mart’s EDLP message appeals to its core customer groups, generally a few thriftier wealthy people and more low-income households. Wal-Mart relies on high-volume sales to these customer segments, but rising inequality may reduce the percentage of the general population that Wal-Mart can appeal to. The new barbell economies, with many at the top and bottom but few in the middle, may drive customers to higher-end stores or lowest-cost discounters without middle ground, possibly eroding Wal-Mart’s customer base. Inequality In The USA: Mind The Gap The following graph shows the share of income in the United States over time.[6] Inequality began increasing in the 1980s, when the top 10% of earners increased their share of total wealth relative to the bottom 90%.

Over the last 30 years, the 1%’s share of income has skyrocketed. The household income gap has also widened over time: as shown in this graph, lower-income households have not enjoyed much of the income growth in the USA. (Source: “The World Top incomes Database” http://topincomes.g-mond.parisschoolofeconomics.edu)

In the US, high income households have seen a disproportionate jump in their annual pay, while those in the middle and lower end have fallen way behind

For Wal-Mart’s typical low- to middle-income customers (90.9% of Walmart customers make less than $100,000 annual household income⁷), declining real wealth as a result of increasing inequality could change their shopping habits. If those shoppers consume less and rely more on dollar stores, Wal-Mart in America may be left catering to a small middle class that can’t support a high-volume sales strategy. (Source: 40 Years Of Income Inequality In America, In Graphs,” NPR, 2 October 2014. [Online]. Available: http://www.npr.org/blogs/money/2014/10/02/349863761/40-years-of-income-inequality-in-america-in-graphs.)

Mexico’s Middle Class Slows Down

50 years ago, 80% of Mexicans were in the lower class. Wal-Mart’s growth in Mexico has coincided with the establishment of a robust middle class, which is shown in the figure below⁷:

	Households	Population
Upper	2.50%	1.71%
Middle	42.42%	39.16%
Lower	55.08%	59.13%

Source: Instituto Nacional de Estadística y Geografía, 2013 In Mexico, Wal-Mart appeals to middle- and upper-middle-class consumers but in recent years, the growth of Mexico’s middle class has slowed: it only increased by 4% from 2000 to 2011⁷. Between 2006 and 2011, the growth rate of the middle class fell from 29.3% to 2.7%⁸ since this growth is highly variable and dependent on the overall state of the Mexican economy. Since the growth of Wal-Mart’s main consumer base in Mexico is slowing and rising economic inequality may reduce the number of middle-class shoppers, Wal-Mart may become economically inaccessible to more of the population and this may eventually reduce Wal-Mart’s growth prospects in Mexico.

How Can Wal-Mart Adapt?

If economic inequality continues to worsen globally, Wal-Mart will be forced to adapt. On the one hand, Wal-Mart could try to become the low-cost provider and engage its new discount competition in an all-out price war for those low-income shoppers. However, Wal-Mart’s main competitive advantage arguably derives from low labour costs and the extensive data analytics that enable efficient operation of its stores and supply chain. It is therefore unrealistic to expect that reducing data analytics will lead to a decrease in costs, and it may be politically infeasible for Wal-Mart to reduce labour costs. Wal-Mart may prefer a differentiation strategy: continue the data analysis but shift the emphasis from EDLP to pricing efficiency over time, with slightly more expensive but more durable goods to appeal to the higher end of a growing, less affluent and more price-sensitive customer segment.

References: [1] Davis, Julie Hirschfeld, and Michael D. Shear. “In State of the Union Speech, Obama to Urge a Skeptical Congress to Back Initiatives.” The New York Times. The New York Times, 20 Jan. 2015. Web. 20 Jan. 2015. Available: http://www.nytimes.com/2015/01/21/us/state-of-the-union-obama-ambitious-agenda-to-help-middle-class.html [2] Cohen, Patricia. “Oxfam Study Finds Richest 1% Is Likely to Control Half of Global Wealth by 2016.” The New York Times. The New York Times, 18 Jan. 2015. Web. 22 Jan. 2015. Available: http://www.nytimes.com/2015/01/19/business/richest-1-percent-likely-to-control-half-of-global-wealth-by-2016-study-finds.html [3] Source: Bloomberg [4] Sozzi, Brian. “Walmart’s Growing Competition Eats Its Sales of Low-Priced Food.” TheStreet. TheStreet, 13 Nov. 2014. Web. 22 Jan. 2015. Available: http://www.thestreet.com/story/12950099/1/walmarts-growing-competition-eat-its-sales-of-low-priced-food.html [5] Marcial, Gene. “Discount Retailer Dollar General Taking Away Market Share From No. 1 Wal-Mart.” Forbes. Forbes Magazine, 29` Dec. 2011. Web. 22 Jan. 2015. Available: http://www.forbes.com/sites/genemarcial/2011/12/29/discount-retailer-dollar-general-taking-away-market-share-from-no-1-wal-mart/ [6] F. Alvaredo, A. B. Atkinson, T. Piketty and E. Saez, “The World Top incomes Database,” [Online]. Available: http://topincomes.g-mond.parisschoolofeconomics.edu. [Accessed 24 January 2015].

Wal-Mart’s commitment to American jobs: A Pebble or a Rock?

By Tanner Erickson, Isac Lima and Steven Zhao

People will remember the 2010s as the decade when the middle class collapsed. The zeitgeist is perfectly captured by the frustration and criticism towards mega corporations that have relocated their manufacturing elsewhere. To gain public favor, Wal-Mart has announced in 2013 of its commitment to “American renewal”, publicly   stating their support to creating more American jobs through domestic manufacturing [1], [2]. With what seemed like an immaterial effort against a major economic tide, the past year has proven that economic shifts, efforts of the government, and actions taken by Wal-Mart have been able to sway jobs back inland. A recent example of Kent International, Inc. shows us that success is very possible when all three of these forces unite.

The tides are turning in the manufacturing world: With rising costs in China, many manufacturers are looking to find new supply sources. Though China used to be a haven for low-cost manufacturing, alarm bells have been ringing for quite some time in the offices of North American companies reliant on their cheap manufactured goods. In the past 3-5 years the Chinese government has realized the vulnerability of its economy due to its dependence on the overseas market demand and the poor health of its working population. As a result, it has raised minimum wages and reduced its currency manipulation practices [3]. The consequence for companies that rely on China has been massive – with rising real estate and energy costs, and labor costs rising by over 20% per year, overall manufacturing costs have skyrocketed [4].

A prime example of a North American manufacturer that has been impacted by these trends is Kent International Inc., a company based in New Jersey. Since 1958 Kent has been producing bicycles, but eventually it started purchasing them fully-assembled from China to save costs. However, with their supplier now paying $600-800 per worker per month, compared to the $30-40 they paid in 1987, the passed-on costs have driven Kent’s bicycle business to the brink of bankruptcy [5]. Like other firms in similar circumstances, they were hesitant to build a manufacturing facility back in the United States due to large capital requirements and risk of insufficient demand. Luckily for Kent, the efforts of the domestic government and Wal-Mart have contributed towards a successful reentry into the U.S.

At the State level, the U.S. Government has been extremely responsive to American companies seeking to relocate their manufacturing domestically with a number of States wooing manufacturers with tax breaks, subsidies, and other incentives. For example, General Electric, Airbus, and Hyundai have all received state subsidies to either relocate or expand their domestic operations [6]. Kent was similarly courted by South Carolina ultimately with a deal to get a natural gas line extended to the proposed plant site [5]. With an uncertain demand for their product however, Kent still held reservations with building a new factory. In the words of Arnold Kamler, Kent’s CEO, “The biggest problem a new factory has is not having any orders” [5]. Solving the issue once and for all, Wal-Mart stepped in to seal the deal.

Giant retailers like Wal-Mart are able to remove the risks that the small to mid-sized companies have with their expected demand through stabilizing both volumes and prices. Without such stabilization, many of these companies are doomed. Four years ago crib maker Stanley Furniture Co. made a gamble by moving its production from China to North Carolina. However, unexpected cost increases specific to North America, unexpected variations in demand, and unwillingness of their customers to pay a premium, left them with no other option but to shut down their plant and lay off its workers [7]. For Kent, Wal-Mart served as its saving grace. With a 6-month supply contract with Wal-Mart, Kent has been able to invest in a $4.5 million plant over the next three years. This plant will provide jobs for 175 workers who will churn out roughly 500,000 bikers per year [4], all in thanks to Wal-Mart’s 2013 commitment to “American Renewal”. The renewal program, aimed at creating more domestic jobs through supporting American manufacturing, came with a commitment to buy an additional $50 billion in U.S. products over the next 10 years (on top of the $200 billion that it already spends) and re-shore the manufacturing of goods they currently buy. Kent is not the only recipient of Wal-Mart’s efforts, as over the past year they have been making significant moves to support their goal. Wal-Mart committed to purchase light bulbs from General Electric that are exclusively made in the U.S. (creating 150 domestic jobs), enabled Element Electronics Corp. to open a new TV assembly facility in South Carolina (500 jobs), and committed to source from Elan-Polo’s new footwear plant in Georgia (250 jobs), to name a few [7].

There are some caveats to the trinity of forces, of course. Reshoring production to the U.S. may be hampered by other low-cost alternatives such as Cambodia or Vietnam, however those countries face the same challenges with skills and productivity, and upward trends for worker wages [8] . Finding enough skilled labour may also be a challenge given the long drought of manufacturing in the U.S. and especially if the desired skills are highly specialized. The skills gap is certainly a paradoxical challenge as skills and training follows demand, but no demand will be brought back if there is insufficient supply of skills. According to an A.T. Kearney report, the skills gap could potentially be met in the short term through strategically choosing reshoring locations and investing in training and standard operating practices by manufacturers [9].

Wal-Mart has had immense success with its “American Renewal” program. While $25 Billion a year may be just a ripple now, it may create momentum to tip a wave. There are no projects without pilots, and adopters without innovators. Together with the forces of economics and government, Wal-Mart may promise companies like Kent a fighting chance at staying afloat and finally coming home.

References 

[1] Wal-Mart Stores, Inc., “U.S. Manufacturing,” [Online]. Available: http://corporate.walmart.com/global-responsibility/us-manufacturing. [Accessed 28 October 2014].
[2] Walmart Stores Inc., “Walmart U.S. Manufacturing Announcements,” 2014. [Online]. Available: http://cdn.corporate.walmart.com/b9/b1/495da24343059514800599b5dbfb/us-manufacturing-commitments-list.S.%20Manufacturing%20Announcements%20List.pdf. [Accessed 28 October 2014].
[3] China Briefing, “China’s Rising Manufacturing Costs: Challenges and Opportunities,” 8 July 2014. [Online]. Available: http://www.china-briefing.com/news/2014/07/08/chinas-rising-manufacturing-costs-challenges-opportunities.html. [Accessed 28 October 2014].
[4] The Economist, “The end of cheap China,” 10 March 2012. [Online]. Available: http://www.economist.com/node/21549956. [Accessed 28 October 2014].
[5] R. Behre, “Manning S.C. beats out China for bike factory,” The Post and Courier, 14 October 2014. [Online]. Available: http://www.postandcourier.com/article/20141014/PC1610/141019640. [Accessed 28 October 2014].
[6] S. Caminiti, “States lure manufacturers and shore up jobs,” CNBC, 29 June 2014. [Online]. Available: http://www.cnbc.com/id/101795323#. [Accessed 28 October 2014].
[7] S. Poynter, “Stanley Furniture,” Wall Street Journal, 2014. [Online]. Available: http://online.wsj.com/articles/bringing-jobs-back-to-u-s-is-bruising-task-1403746208http://online.wsj.com/articles/bringing-jobs-back-to-u-s-is-bruising-task-1403746208. [Accessed 29 October 2014].
[8] T. Economist, “The Economist,” 19 January 2013. [Online]. Available: http://www.economist.com/news/special-report/21569570-growing-number-american-companies-are-moving-their-manufacturing-back-united. [Accessed 31 10 2014].
[9] P. V. d. Bossche, “Solving the Reshoring Dilemma,” Supply Chain Management Review, January 2014. [Online]. Available: http://www.atkearney.com/documents/10192/4059261/Solving+the+Reshoring+Dilemma.pdf/29edad5b-8327-46e4-bc67-edabfcc64af6. [Accessed 31 10 2014].
[10] C. BELLEGO, “Enterp,” March 2014. [Online]. Available: http://www.entreprises.gouv.fr/files/files/directions_services/etudes-et-statistiques/4_pages_Dgcis/2014-03-4p30-EN.pdf. [Accessed 31 10 2014].