Christina Ley bus 240 50



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Christina Ley

BUS 240 – 50

9/27/12

Activity #12 - WalMart Case Study




  1. GO TO WEBSITE: http://www.pbs.org/wgbh/pages/frontline/shows/walmart/

  2. CLICK ON ONLINE: Watch the Full Program Online

  3. VIEW THE FOUR MODULES

  4. REVIEW BACKGROUND INFORMATION / DEFINITION OF TERMS

  5. TYPE YOUR RESPONSES ON THIS DOCUMENT FORM

  6. PUT COMPLETED DOCUMENT IN YOUR PORTFOLIO

The changing relationship between manufacturers and the so-called "big-box" retailers is exemplified by Wal-Mart. This societal change has contributed to the bankruptcy of some American businesses and a caused unemployment for some American workers. While Wal-Mart supporters tout the advantages of one-stop, low-cost shopping, others are alarmed at both the outsourcing that has made these low prices possible and how large retailers affect smaller, local businesses.

Definitions:

• Outsourcing is when a business obtains services or products used in manufacturing, such as parts for a television set, from an outside (often overseas) supplier or manufacturer in order to cut costs.

• Offshore Companies conduct most of their business outside of the country in which they are incorporated. These companies are also known as non-resident companies.

• Push Production is when manufacturers of products decide what to produce, how much to produce and the price of the product.

• Pull Production is when retailers determine what the manufacturer will produce, how much to produce and the price of the product.

Case Facts:

• Global retailers are superseding manufacturers in making decisions about product quality, type and price.

• A basic flaw in the United States-China trade relationship is that we can afford to buy Chinese products, but they cannot afford to buy ours.

• Wal-Mart has approximately 6,000 global suppliers; 80 percent of these are from China.

• China is becoming the biggest producer of high-tech products in the world.

• TCL, a Chinese company, is now the largest producer of televisions in the world and almost all of their U.S. exports go to Wal-Mart.

• The United States is exporting raw materials to Third World countries and importing their manufactured products, which is a reversal of former economic relations.

• In 2003, the United States had a $120 billion trade deficit with China and it is rising each year.





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